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Employee Benefits Associate
Perkins Coie LLP
in WA

Employee Benefit Policy and Legal Expert
Employee Benefit Research Institute [EBRI]
in DC

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Employee Benefit Research Institute [EBRI]
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Duncan Financial Group
in PA

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Webcasts and Conferences

Prohibited Transactions
July 21, 2016 WEBCAST
(ASPPA [American Society of Pension Professionals & Actuaries])

The Final 430 Regulations: Changes in Funding Rules
August 11, 2016 WEBCAST
(ASPPA College of Pension Actuaries [ACOPA])

Mid-Sized Retirement & Healthcare Plan Management Conference
September 25, 2016 in NV
(University Conference Services)

Fundamentals 15: Participant Disclosure [2016]
July 11, 2017 WEBCAST
(FIS Relius Education)

Form 5500 for DFEs
July 13, 2017 WEBCAST
(FIS Relius Education)

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[Official Guidance]

Text of Treasury Department Denial of Benefit Suspension Application for Road Carriers Local 707 Pension Fund (PDF)
"On June 10, 2016, PBGC denied the Plan's application for partition.... The Application states that the Plan is projected, absent suspension of benefits, to become insolvent by February 2017.... Treasury has determined that the suspensions described in the Application fail to satisfy the requirement ... that the proposed benefit suspensions ... be reasonably estimated to achieve, but not materially exceed, the level that is necessary to avoid insolvency, because without a partition, the Plan will not avoid insolvency[.]" (U.S. Department of the Treasury)  


ASC: An Industry Leader in Plan Document Services & Support!

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[Guidance Overview]

Proposed IRS Regs Under Sec. 457(f) Impact Compensation Arrangements of Governmental and Tax-Exempt Entities
"[T]he proposed regulations include new rules for determining: [1] What constitutes a deferral of compensation and a substantial risk of forfeiture under Section 457; [2] Plans that are not subject to the deferred compensation rules of Section 457; and [3] When amounts deferred are includible in income and how such amounts are to be determined.... [T]he proposed regulations provide for a definition of 'substantial risk of forfeiture' that generally follows the definition under ... Section 409A but contains different rules relating to noncompetition covenants and 'rolling' risks of forfeiture." (Skadden, Arps, Slate, Meagher & Flom LLP)  

[Guidance Overview]

DOL Final Fiduciary Rule on Investment Advice Affects Plan Sponsors
"Plan sponsors may wish to: ... Confirm that fiduciary liability insurance coverage is adequate.... The new, broader interpretation of both advisor and advice may increase exposure for the investment industry.... The higher risk of co-defendants may present a corresponding risk of triggering indemnification rights.... Be wary of peer review as a foundation of that assessment, as where exposure is increasing materially, as it is here, peer analysis may fall short." (Willis Towers Watson)  

Supreme Court Declines to Hear Fiduciary Breach Case on GM Stock Drop
"The U.S. Supreme Court on [June 27] declined to hear an appeal by participants in two General Motors 401(k) plans who argued that the independent fiduciary for a company stock fund violated its ERISA duties. The court did not comment on its decision ... The participants only sued the fiduciary, State Street -- not General Motors." [Pfeil v. State Street Bank and Trust Co., No. 14-1491 (6th Cir. Nov. 10, 2015; cert. pet. denied, June 27, 2016)] (Pensions & Investments)  

Maryland Enacts Mandatory Private-Sector Retirement Program That Impacts Most Maryland Employers
"The Maryland Small Business Retirement Savings Program and Trust ('Program'), which is effective on July 1, 2016, requires covered private-sector employers to participate in the Program. Covered employers will be required to remit employee payroll contributions into an IRA, and the State will act as the Program's fiduciary.... The Program expressly provides that 'an employer is not a fiduciary, and may not be considered to be a fiduciary' of the Program. Further, an employer may not be held liable for: [1] an employee's decision to participate in or opt out of the program; [2] the investment decisions of employees; [3] the administration, investment, or investment performance of the Program; or [4] the Program design or benefits paid to participating employees." (Ober Kaler, via Lexology)  


The WBC: Not Your Ordinary Industry Conference

Sponsored by ASPPA

The Western Benefits Conference is the only Annual, Multi-day, Comprehensive Employee Benefits Conference west of the Rockies. Highly interactive sessions, Thought leaders, Practical industry leading ideas, Networking, Valuable CE credits and more!

How America Saves, 2016 Small Business Edition
32 pages. "The Small Business Administration reports that small businesses represent 99.7% of all employer firms, and they employ half of all private-sector employees. Accordingly, to help small-business DC plan sponsors understand how their plans compare with other small-business plans, we are pleased to add this ... supplement to our annual series of How America Saves benchmarking reports.... [I]t is important to have a detailed understanding of DC plans and the role they play in the U.S. retirement system. [Vanguard believes] this information can help you make more effective plan decisions and will thus serve as a valuable reference tool as you continue to develop your retirement programs." (Vanguard)  

Transitioning from a Defined Benefit to a Defined Contribution Program: Case Study
"[L]ong-term costs are projected to settle at 6.00% until the DB plan is terminated due to administrative costs associated with maintaining a DB plan, even if it is fully funded. More importantly, however, is the fact that short-term costs are about 1% higher due to maintaining both plans. This is typically the case unless the DB plan is well-funded and the majority of the annual contribution is attributable to ongoing benefit accruals rather than funding the plan's shortfall." (Cammack Retirement Group)  

MetLife, MassMutual Win $1.6 Billion Pension-Risk Deal with PPG
"MetLife Inc. and Massachusetts Mutual Life Insurance Co. agreed to take on $1.6 billion in pension liabilities from PPG Industries Inc., the maker of paints and coatings.... The deal accounts for about 13,400 of PPG's salaried and non-union hourly retirees or their survivors who began receiving benefit payments before April 2 ... The insurers will assume the obligation to make all future annuity payments and administer the arrangements. Other participants will remain in PPG's pension plan." (Bloomberg)  

An Actuarial Perspective on the 2016 Social Security Trustees Report (PDF)
"To bring Social Security into actuarial balance for the next 75 years ... changes equivalent to either an immediate increase of 2.75 percentage points in the payroll tax rate, or an immediate decrease of about 17 percent of benefits for all current and future beneficiaries, or some combination thereof, is required. The analogous numbers from last year's report were a 2.78 percentage point increase in the payroll tax rate and a 17.2 percent decrease in all benefits." (American Academy of Actuaries)  

Social Security's Financial Outlook: The 2016 Update in Perspective
"The 2016 Trustees Report shows virtually no change: Social Security's 75-year deficit is 2.66 percent of payroll, just a hair below the 2015 projection. The deficit as a percentage of GDP remains at about 1 percent. Trust fund exhaustion is still 2034, after which payroll taxes still cover about three quarters of promised benefits. The shortfall is manageable, but action should be taken soon to restore confidence in the program and give people time to adjust to needed changes." (Center for Retirement Research at Boston College)  

Do-It-Yourselfers: Makeover a Bathroom? OK. Plan for Retirement? Maybe Not.
"44 percent of pre-retirees and retirees do not engage a financial professional when preparing a financial retirement plan. Of those 50 percent say they can do it 'just as well (or better) on their own.' But can they? ... [W]hen it came to determining their income in retirement and how long their assets would last, nearly 80 percent used an online tool or manually calculated using a pen and paper. One in four 'do-it-yourselfers' simply guessed[.]" (LIMRA)  

Best Savings Strategies for Employees with Bad Retirement Plans
"[I]t's better to truly empower employees with practical alternatives should their 401k plan not measure up to their expectations. This, by definition, is the job of a good fiduciary (including the 401k plan sponsor, who can help employees turbo charge their retirement savings beyond what the company's 401k can offer). This solution, while seemingly obvious, often flies into the face of a much larger obstacle, one that even professional fiduciaries can find themselves stumbling over: The very definition of what it means for a plan to be 'below average.' " (Fiduciary News)  


The Ideal Strategic Retirement Planning Process
"The typical retirement plan report is centered around a spreadsheet that purports to anticipate our future wealth annually for the next three decades despite all evidence that such forecasts are well beyond human capabilities.... [A]nalyzing a retirement plan using such a projection as the central assumption is unwise. We end up with retirees looking at their plans and saying, 'Wow! In thirty years, I'll still have $10,264.32 in my bank account! I'm set.' " (The Retirement Cafe)  

Benefits in General

[Official Guidance]

Text of IRS Disaster Relief Notice WV-2016-02, for Victims of Severe Storms, Flooding, Landslides and Mudslides in West Virginia
"[I]ndividuals who reside or have a business in Greenbrier, Kanawha and Nicholas Counties may qualify for tax relief.... [T]he IRS gives affected taxpayers until November 15, 2016 to file most tax returns ... that have either an original or extended due date occurring on or after June 22, 2016 and on or before November 15, 2016.... This relief also includes the filing of Form 5500 series returns ... The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series[.]" (Internal Revenue Service [IRS])  

Executive Compensation and Nonqualified Plans

[Guidance Overview]

IRS Proposes Updates to Sec. 409A Rules
"The proposal introduces a single rule, applicable for all purposes, that looks generally to when an event results in currently taxable income.... The proposed rules ... [allow] a payment at death to be paid at any time designated by the payor or payee up to and including December 31 of the calendar year following the calendar year in which death occurs.... A separate portion of the release adjusts 409A proposed regulations issued in late 2008 (but not yet finalized) that prescribe how to measure the income required to be taken into account in the case of noncompliance with 409A." (Ropes & Gray LLP)  

Executive Nonqualified Deferred Compensation Plans: Employer Considerations
"Nonqualified executive compensation plans can be instrumental in helping employers attract and retain top leadership talent, enabling their executives to have a better chance of reaching their retirement replacement income goals. Given the potential pitfalls and the uncertainty surrounding the Top Hat status, employers should document how they determine which employees would be eligible for these plans and be able to demonstrate the steps they undertook to properly restrict eligibility to the appropriate group of employees." (Cammack Retirement Group)  

Press Releases

ECFC Announces IRS Expert Donna Crisalli as Technical Advisor
ECFC [Employers Council on Flexible Compensation]

DOL Files Suit Requiring Fiduciaries to Restore $5.9M in Losses to Triple T Transport Employee Stock Ownership Plan
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

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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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