Retirement Plans Newsletter

June 24, 2016

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Employee Benefits Jobs

Fund Administrator
Large New Jersey Labor Union
in NJ

Director of Retirement Benefits and Actuary
Major New York Not-for-profit
in NY

Director of Client Services
UnifyHR, LLC
in TX

Trading & Corrections Associate
Aspire Financial Services LLC
in FL

Pension/401(k) Administrator
Ascensus
in NJ

Pension/401(k) Administrator
Ascensus
in PA

Loan & Distribution Specialist
Scholz & Friends Enlightened Retirement Group, Inc.
in TX

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Webcasts and Conferences

Role of Private Plans in Medicare
RECORDED
(RAND Corporation)

Transforming Healthcare through Technology
June 29, 2016 in NY
(Frenkel Benefits, LLC)

Health Benefits Laws Compliance Assistance Seminar
July 13, 2016 in IL
(Employee Benefits Security Administration [EBSA], U.S. Department of Labor)

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[Guidance Overview]

The New Fiduciary Regs: A Practical Review, Part 2 (PDF)
"It is clear from the Preamble to the exemption, as well as the exemption terms themselves, that the DOL is trying to structure an environment where the participant remains protected and the advisor acts in the participant's best interests. The DOL approaches this in two ways: on the one hand, forcing the fiduciary to behave within constraints, and on the other, giving a disappointed participant access to litigation as an enforcement mechanism." [Also see Supplement: Best Interest Contract Exemption.] (Ferenczy Benefits Law Center LLP)  


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[Guidance Overview]

The Best Interest Contract Exemption (PDF)
8 pages. "[C]ompliance with the BICE will not be easy....[C]ompliance involves not only the Advisor who is giving the advice to the plan or participant, but also the [Financial Institution], its Affiliates, and its Related Entities. The DOL has assured the retirement plan industry that it will be provided significant additional guidance before the BICE becomes effective." [This article published as a Supplement to The New Fiduciary Regs: A Practical Review.] (Ferenczy Benefits Law Center LLP)  

Text of Federal District Court Opinion: Participant's Failure to Repay Erroneous Overpayment Is Breach of Fiduciary Duty (PDF)
"A plan fiduciary is anyone who 'exercises any authority or control respecting management or disposition of [plan] assets.' ... Defendant became a plan fiduciary because she retained control over Plan assets she was not entitled to ... In withholding the funds, Defendant continues to obstruct the [Plan's] access to and use of the funds it overpaid to her.... Because Defendant is a fiduciary of the plan .. she is personally liable and must 'make good to such plan any losses to the plan resulting from each such breach." [Altcatel-Lucent v. Borlabi, No. 13-4543 (D. N.J. June 16, 2016)] (U.S. District Court for the District of New Jersey)  

Great-West Loses Another Round in ERISA Class Action
"A federal judge in Colorado certified the case as a class action on behalf of more than 270,000 investors in about 13,600 different retirement plans. The judge also denied Great-West's attempt to block expert testimony on the amount of money at stake in the lawsuit.... The dispute centers on the Great-West Key Guaranteed Portfolio Fund, a guaranteed investment contract the company offered to participants in 401(k) plans." [Teets v. Great-West Life & Annuity Ins. Co., No. 1:14-cv-02330 (D. Colo. June 22, 2016)] (Bloomberg BNA)  

Text of S. 3078: 'Retirement Savings Registry' Bill, Introduced by Sen. Warren
15 pages. "Not later than one year after the date of the enactment of this Act, the Commissioner of Social Security and the Secretary of the Treasury ... shall establish an on-line mechanism to be known as the 'Retirement Savings Registry', to be managed by the Director of the Retirement Savings Registry established under ... this Act ... to allow an individual to search for information that enables the individual to locate the plan administrator of any plans with respect to which the individual is a participant or beneficiary, and to provide contact information for the plan administrator of any plan ... with respect to which the individual may be entitled to a benefit[.]" (U.S. Senate, via American Benefits Council)  


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Retirement Assets Total $24.1 Trillion in First Quarter 2016
"Assets in [IRAs] totaled $7.4 trillion at the end of the first quarter of 2016, an increase of 1.0 percent from the end of the fourth quarter of 2015. [DC] plan assets rose 1.7 percent in the first quarter of 2016 to $6.8 trillion. Government [DB] plans -- including federal, state, and local government plans -- held $5.1 trillion in assets as of the end of March, a 0.8 percent decrease from the end of December. Private-sector DB plans held $2.8 trillion in assets at the end of the first quarter of 2016, and annuity reserves outside of retirement accounts accounted for another $2.0 trillion." (Investment Company Institute [ICI])  

Wall Street Splits with Smaller Firms Over Fiduciary Rule Lawsuit
"Debate over the high-profile litigation has roiled SIFMA, one of several trade groups that sought to overturn the regulation in federal court in Dallas earlier this month.... While the suit was ultimately approved with the strong backing of regional brokerage firms, tensions flared during conference calls and meetings leading up to the court filing ... At one point, Wells Fargo threatened to quit SIFMA, if it joined the suit[.]" (Financial Planning)  

[Opinion]

Will Fiduciary Rule Survive Rising Tide of Lawsuits?
"The plaintiffs' arguments for an injunction [include] ... DOL infringing on the authority of other federal and state agencies, doing financial harm to investors, ... exposing financial advisors and their employers to litigation risk, and issuing a final rule with new conditions that allowed no opportunity for public review and comment. This last ... is thought to have a greater chance of swaying a court in favor of the plaintiffs.... Another charge that might have some possibility of 'sticking' is that DOL, despite their claims to the contrary, does not appear to have coordinated in a serious way with the [SEC.]" (Todd Berghuis, for Ascensus)  

[Opinion]

TIAA's Roger Ferguson Breaks with Rivals to Support Obama Fiduciary Rule
"Roger Ferguson, the former Federal Reserve vice chairman who is chief executive officer of TIAA,... said the rules help address one of his concerns: In some cases, customers were encouraged by outside advisers to roll over workplace retirement plans into individual accounts that might not have been in their best interest. The CEO's remarks carry weight because of both TIAA's size and his ties in Washington. The company, which is known for providing financial services and insurance to teachers, oversees more than $800 billion." (InvestmentNews)  

Benefits in General

Text of Written Statements to ERISA Advisory Council by Invited Witnesses
Links to the full text of statements submitted to the ERISA Advisory Council's meetings on June 7-8, 2016, covering [1] Cybersecurity Considerations for Benefit Plans (8 statements), and [2] Participant Plan Transfers and Account Consolidation for the Advancement of Lifetime Plan Participation (7 statements). (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])  

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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2016 BenefitsLink.com, 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 BenefitsLink.com, 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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