Retirement Plans Newsletter

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Employee Benefits Jobs

VP & AGC - Retirement Plan Services & ERISA
Charles Schwab Corporation
in OH, TX

Sr. Relationship Mgr, Retirement Plan Solutions
TD Ameritrade
in CO

Sales Consultant - Retirement Plans
Polycomp Administrative Services, Inc.
in CA

Pension Plan Administrator
Growing National Provider
in Telecommute

Manager, Client Services
Newport Group
in CA

Supervisor, Operations
Newport Group
in CA

Senior Retirement Plans Specialist
Petersen Hastings Investment Firm
in WA

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Webcasts and Conferences

Compensation & Benefits - Section 162(m) & Compensation Planning
June 8, 2016 WEBCAST
(Winstead PC)

ERISA Cases in the Supreme Court: What the Courtís 2016 Term Means for Your Plan
June 22, 2016 in IL
(Worldwide Employee Benefits Network [WEB] - Chicago Downtown Chapter)

IRA Basics
July 21, 2016 WEBCAST

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[Official Guidance]

Text of PBGC Proposed Regs: Mergers and Transfers Between Multiemployer Plans
54 pages. "The proposed rule would provide guidance on the process for requesting a facilitated merger under section 4231(e) of ERISA, including a request for financial assistance under section 4231(e)(2).... [PBGC] will determine whether to provide further guidance on the evaluation criteria for facilitated mergers, and any limitations PBGC may impose relating to the amount of financial assistance available, based on the experience it gains implementing this proposed rule.... [T]he proposed rule includes a provision that would allow a plan sponsor to engage in informal discussion s with PBGC before filing a formal request for a facilitated merger.... PBGC does not interpret section 4231(e)(2)(B)(ii) to preclude a small, critical and declining status plan from receiving financial assistance to merge into a large, financially healthy multiemployer plan because such an interpretation would be inconsistent with the statute as a whole." (Pension Benefit Guaranty Corporation [PBGC])  

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Text of Complaint Filed by Employer and Financial Services Organizations Challenging DOL Fiduciary Rule (PDF)
"The SEC has more than eighty years' experience regulating financial markets and services ... and has been specifically charged by Congress with studying the propriety of adopting a uniform fiduciary standard. The [DOL's] authority, by contrast, is more narrowly prescribed and is generally restricted to employee benefit plans. It possesses neither the expertise nor the authority to regulate financial services in a manner that properly balances the needs of retirement savers and small businesses. Because the [DOL] lacks affirmative authority to regulate financial services outside the context of employee benefit plans, it has sought to promulgate this new regulatory regime through its exemptive authority under ERISA. That is, the Department seeks to convert its authority to lift regulatory burdens into a means to impose them, resulting in the most sweeping change in retirement planning since the adoption of ERISA itself. By doing so, the Department has disregarded the regulatory framework established by Congress, exceeded its authority, and assumed for itself regulatory power that is vested in the SEC in ways that will harm retirement savers." [Chamber of Commerce of the United States of America, et al. v. Perez, No. 3:16-cv-01476-G (N.D. Tex. filed June 1, 2016)] (U.S. District Court for the Northern District of Texas)  

Statement of DOL Secretary Perez on Legal Challenge to Department's Efforts to Ensure Best Interest Retirement Advice (PDF)
"This rulemaking was one of the most deliberate, open regulatory processes in recent memory.... We heard what stakeholders had to say, thoughtfully considered their comments and made improvements to the rule based on their feedback. The department's Conflict of Interest rule is built upon solid statutory and legal foundations, and we will defend it vigorously." (U.S. Department of Labor [DOL])  

Lawsuit Filed to Challenge DOL Fiduciary Rule That Prevents Financial Professionals from Best Serving Retirement Savers
"The [DOL]'s new, 1,023-page rule ... creates sweeping changes to existing regulations that will make saving for retirement more difficult for the very same hardworking American families and individuals it claims to protect.... The rule will shackle Main Street financial advisors with extensive new requirements and constant liability, forcing them to limit the options and guidance they provide to retirement savers.... Advisors servicing small business plans will similarly be left with no choice but to limit or stop servicing the retirement plans offered by those job-creators, significantly reducing the retirement savings options available to their millions of employees. These consequences collectively reinforce that government officials failed to perform an adequate cost-benefit analysis during the rule's development." (U.S. Chamber of Commerce, Financial Services Institute, Financial Services Roundtable, Insured Retirement Institute [IRI], Securities Industry and Financial Markets Association [SIFMA], and four Texas business and financial organizations)  

In-House Trustees for Small Minnesota 401(k) Plan Face Class Action Over Excessive Fees
"The main allegation of the class action complaint is that the in-house plan fiduciaries failed to have a formal process for evaluating these fees (investment fees and record-keeping fees) and failed to conduct periodic RFPs to establish their own benchmarks....The main thing that this case demonstrates is that excessive fee actions are no longer only a concern for the 'large plans' with multimillion or billions of dollars in assets." (Stinson Leonard Street)  


The Ultimate Retirement Professional Conference Experience

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Recent Court Decisions Impose ERISA Requirements on Plans Established by Church-Related Organizations
"For many years, a number of courts have held that [ERISA's 'church plan' exemption] also applied to plans that were established by organizations that are affiliated with churches, such as schools (think Notre Dame or Georgetown) or hospitals. In two major decisions a couple of months apart, the Third and Seventh Circuits have held that the exemption is not as broad as other courts have concluded. These cases signal a major new area of ERISA litigation." (Begos Brown & Green LLP)  

How States Are Working to Address the Retirement Savings Challenge (PDF)
41 pages. "Pew's analysis identifies three approaches to increase retirement savings for private sector workers that states are considering.... [1] Policymakers must decide whether the program will be set up under [ERISA] ... [2] States can craft plans that do not fall under ERISA, such as the Secure Choice program in Illinois, which allows all workers in the state who do not have plans through their employers to make payroll contributions to [IRAs] ... [3] States can help businesses voluntarily set up their own retirement savings plans, as is being done with the marketplace websites created for small employers by Washington and New Jersey.... States must determine whether they have the administrative and financial capacity to manage large savings programs." (The Pew Charitable Trusts)  

Missouri ESOPs Bill Could Lift Business Environment
"A bill that would encourage corporations in Missouri to sponsor employee stock ownership plans could help turn around the discouraging business environment in the state, lawmakers and business leaders said ... The bill, H.B. 2030, would allow a 50 percent tax deduction of the net capital gain from the sale or exchange of a company to an ESOP if the company is at least 30 percent employee-owned. It passed with overwhelming bipartisan support in both chambers of the state legislature." (Bloomberg BNA)  

Connecticut-Run Retirement Program for Private Employees to Start in 2018
"The new Connecticut Retirement Security Program will include the formation on Jan. 1, 2017, of a quasi-public/private Connecticut Retirement Security Authority. The authority will have oversight of the Connecticut retirement security plan, which will begin operation in 2018. The program will require all Connecticut businesses of five or more employees with no pension or 401(k) plan option to participate in the retirement security program. It will be voluntary for employees, who will be automatically enrolled but have the ability to opt out. Employers will not be required to match contributions." (Pensions & Investments)  


June 8 webinar - Compensation Planning for Tax-Exempt Entities: Navigating IRC Section 457(f)

Sponsored by Trucker Huss

Tax-exempt employers must be aware of unique restrictions and benefits of Section 457(f) for programs that include supplemental executive retirement benefits, long-term incentive bonuses and severance benefits. Learn best practices and avoid pitfalls.

Minnesota Governor Vetoes Bill to Cut COLAs for Two Large State Pension Plans
"Under the bill, the retiree cost-of-living adjustment for the $20.4 billion teachers pension fund would have been halved, to 1%; while the adjustment for the $22 billion [State Retirement System] would have been trimmed to 1.75% from 2%. The bill had also included cutting the teachers plan's long-term assumed rate of return to 8% from the current 8.5%, which would then have matched the state retirement system's return assumption." (Pensions & Investments)  

Guaranteed Returns in Retirement Savings Plans: Are They Worth the Cost? (PDF)
"State-sponsored retirement savings plans could help millions of private-sector workers who are not covered by an employer plan to build financial security. Several features will help such plans be more effective and produce more secure retirements. This report discusses investment guarantees that promise to deliver at least a certain level of return. It also covers both the costs of such guarantees and their potential value to savers." (AARP Public Policy Institute)  

Benefits in General

[Guidance Overview]

IRS Rules Clarify Self-Employment Tax Treatment of Partners: Possible Impact on Employee Benefit Plans
"As a result of these clarifications, partnerships and LLCs that have been characterizing certain partners as 'employees' of a disregarded entity will have to re-characterize them as partners for self-employment tax purposes (thus reporting their income on a Form K-1, rather than Form W-2).... Partners in a partnership are not permitted to participate in cafeteria plans (including medical and dependent care flexible spending accounts) under Code Section 125 and in qualified transportation expense plans under Code Section 132." (Sherman & Howard)  

Court Finds Temporal Proximity Alone Is Not Sufficient to Support ERISA Discrimination Claim
"A recent decision district court ruling affirms that in a benefit discrimination claim, just as in a typical claim of employment discrimination, to survive summary judgment a plaintiff must demonstrate that a defendant's given lawful reason for taking an adverse action was pretext. Temporal proximity between an adverse action and an enrollment in an ERISA plan (without more), is insufficient to overcome an employer's legitimate, nondiscriminatory reason for the termination." [Francis v. South Central Houston Action Council Inc., No. 14-1277 (S.D. Tex. Apr. 25, 2016)] (Seyfarth Shaw LLP)  

Press Releases

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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2016, Inc. All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of, Inc., or in the case of third party materials, the owner of that content. You may not alter or remove any trademark, copyright or other notice from copies of the content.

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