Director / Senior Director, Benefits Administration
Extensis Group, LLC
in NJ

Client Services Representatives
MassMutual
in MA

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Fundamentals 16: Distributions [2016]
July 18, 2016 WEBCAST
(FIS Relius Education)

Practical Employee Benefits Issues for ERISA and Non-ERISA Attorneys
September 20, 2016 WEBCAST
(ABA Joint Committee on Employee Benefits [JCEB])

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[Official Guidance]

Text of PBGC Disaster Relief Notice 2016-09 in Response to Severe Storms, Flooding, Landslides and Mudslides in West Virginia
"The disaster area consists of Greenbrier, Kanawha and Nicholas Counties.... PBGC will ... treat as timely any premium filing required to be made for the plan beginning on or after June 22, 2016, and on or before November 15, 2016, if the filing is made by November 15, 2016.... The disaster relief relating to premium deadlines also applies to multiemployer plans." (Pension Benefit Guaranty Corporation [PBGC])  

[Advert.]

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Your clients trust you to help them reach their retirement goals. Are you staying up-to-date? Register for our Live Educational IRA Training, October 10–14, 2016 in Las Vegas. Seating is Limited.

[Guidance Overview]

Interesting Angles on the DOL's Fiduciary Rule, Part 11
"While the concept of reasonable compensation is old-hat for advisers and service providers to ERISA qualified retirement plans, it has not, by and large, been used in the IRA world.... The DOL explained the concept in a preamble ... 'reasonableness' is defined by free market practices ... in a market where the costs and compensation are transparent and, therefore, where the market is truly competitive.... Benchmarking is on its way to IRAs." (FredReish.com)  

[Guidance Overview]

IRS Issues Proposed Regs for Deferred Compensation Arrangements Sponsored by Tax-Exempt Organizations
"The regulations ... [1] permit the elective deferral of current compensation, which the IRS had previously said was not permitted under Code Section 457(f), provided that the elective deferral arrangement meets certain requirements ... [2] define for the first time what constitutes a bona fide severance pay plan that is not subject to Code Section 457; [3] describe for the first time what constitutes a bona fide sick and vacation leave program and, in particular, call into question programs that provide for large payouts of accrued sick and vacation leave upon termination of employment[.]" (Morgan Lewis)  

[Guidance Overview]

Worth the Wait: 457(f) Proposed Regs for Deferred Compensation of Tax-Exempt Organizations
"The proposed regulations provide that if structured appropriately: [1] 'Short-term deferrals' are not subject to Section 457(f). [2] Covenants not to compete may be used to create a substantial risk of forfeiture. [3] A rolling risk of forfeiture feature may be used to extend a substantial risk of forfeiture. [4] A substantial risk of forfeiture may be applied to current compensation (i.e., elective deferrals)." (Drinker Biddle)  

[Guidance Overview]

PBGC Proposes Regulation on Facilitated Mergers of Multiemployer Plans
"[The proposal]: [1] Requires that requests for facilitated mergers, including financial assistance, be filed 270 days before the merger's effective date; [2] Requires that an application for financial assistance show that at least one of the plans involved is critical and declining and that the merger would avoid insolvency; [3] Strengthens the solvency tests for non-de minimis mergers; [4] Classifies mergers that involve critical or endangered plans as significant; and [5] Requires that requests for a PBGC compliance determination be submitted with the original notice of merger." (Cheiron)  

[Advert.]

Roth IRA Answer Book, Seventh Edition

In-depth coverage of the administration and operation of Roth IRAs. Use code BENEFIT20 for 20% discount.

An Overview of the 5500-EZ Delinquent Filer Program
"As an alternative to submitting late returns under this delinquent filer program, plan sponsors may instead request relief by attaching a statement to the delinquent return, signed by a person in authority, stating your reasonable cause for the untimely return. However, if the request is denied, the plan sponsor will receive the CP 283 penalty notice and the return will no longer be eligible for the delinquent filer program." (Belfint Lyons & Shuman, CPAs)  

Does the Dudenhoeffer Decision Do 'More Harm Than Good' for Stock-Drop Plaintiffs?
"Dudenhoeffer generally confirmed that ERISA plan fiduciaries may rely on market pricing of publicly traded stock, and that they are not compelled to violate federal securities laws by acting on inside information.... In Amgen ... the Supreme Court confirmed that the 'more harm than good' standard is one that must be sufficiently addressed by plaintiffs at the pleadings stage. Although plan fiduciaries can no longer invoke the Moench presumption, the Amgen decision seems to have solidified the threshold that plaintiffs may need to reach at the pleadings stage in order for the case to continue." (Dechert LLP)  

DOL Fiduciary Rule Will Nudge 401(k) Advisers to Zero-Revenue-Share Fund Lineups
"Nearly 52% of defined-contribution plans used revenue sharing to pay at least a portion of plan administrative expenses in 2015 ... That trend is on the decline, though -- 67% used revenue sharing in 2012.... in 2015, 72% of assets held in the various 'R' share classes were in those share classes that strip out a 12b-1 fee. By comparison, it was 56% in 2012." (InvestmentNews)  

Litigation Schedule Set for Suits Against DOL Fiduciary Rule
"Financial industry trade groups and the [DOL] have agreed to a litigation schedule that could render a decision in October on several lawsuits seeking to stop an investment advice regulation.... Briefs would be filed at various dates in July, August, September and into the middle of October.... Chief Judge Barbara M.G. Lynn has not yet ruled on the motion. In a separate order on June 21, Ms. Lynn consolidated three suits that were filed in the U.S. District Court for the Northern District of Texas." (InvestmentNews)  

Study Suggests Real Estate Investments Could Help Pension Plans
"While private equity had a higher average annual gross return than REITs at 13.46%, its net return was lower at 11.37%, pulled down by management fees that were nearly four times higher than those of REITs. REITs also outperformed unlisted real estate, which delivered an average annual net return of 8.59% with more than twice the annual fees of REITs." (PLANSPONSOR)  

Brexit: What It Is and Its Impact on Retirement Plans (PDF)
"Despite some positive upside on the value of bond portfolios, the net effect will likely be a large decline in funded status for underhedged defined benefit plans. The market upheaval of the past several days has affected defined contribution plan participants as well. Rebalancing and staying the course will be key." (Xerox HR Services)  

Teachers Union and Hedge Funds Go to War Over Pension Billions
"Some pension funds have withdrawn money from hedge-fund managers criticized by the teachers union. And some hedge-fund managers stopped making donations to advocacy groups targeted by [Randi Weingarten, President of the American Federation of Teachers]. Hedge funds, reluctant to buckle to the pressure, say Ms. Weingarten is doing a disservice to the teachers she represents, because funds should aim solely to earn the highest possible return on their assets. The personal beliefs or donations of hedge-fund managers, they argue, shouldn't be a factor in that decision." (The Wall Street Journal; subscription may be required)  

Proposed Changes to the Social Security Program, Described and Grouped by Category
"Recent Reports call for informed discussion, creative thinking, and timely legislation to address expected future deficits. Many policy makers have developed proposals and options to address this long-range solvency problem. Listed [in this article] is a broad range of policy options that would address Trust Fund solvency and other issues related to Social Security benefits and financing. Many of these options are part of comprehensive proposals intended to restore Trust Fund solvency." (U.S. Social Security Administration [SSA])  

Planning Opportunities for Non-Spouse Beneficiaries of Inherited Retirement Accounts
"[T]he rules permitting a transfer from an inherited employer retirement plan to an inherited IRA also allow the assets to be shifted to an inherited Roth IRA, effectively giving the beneficiary the option of doing a Roth conversion even after the death of the original account owner. This is a strategy uniquely available to beneficiaries of inherited employer retirement plans, as an inherited IRA may not be converted to a Roth. The caveat, however, is that ... since an inherited Roth IRA (after conversion) still has required minimum distribution obligations, it will usually be preferable to convert any other type of pre-tax retirement account first!" (Michael Kitces in Nerd's Eye View)  

Labor Force Transitions at Older Ages: Burnout, Recovery, and Reverse Retirement (PDF)
44 pages. "In this paper [the authors] study the effects of wage and health transition processes as well as the role of accrued work-related strain on the labor force participation on older males. We find that a model incorporating a work burnout-recovery process can account for such reverse retirement behavior that cannot be generated by health and wealth shocks alone, suggesting re-entry patterns result in large part from planned behavior.... [R]espondents are more likely to report high levels of job stress as they continue to work when they would have otherwise stopped working, recovered, and re-entered." (Lindsay Jacobs, Federal Reserve Board, and Suphanit Piyapromdee, University College London)  

[Opinion]

MEPs Aren't What They Seem; 'Prototype' Alternative Achieves Scale More Efficiently
"A more effective alternative at providing scale than the MEP platform, and one which really is made possible by technology, is what the DOL describes in [IB 2015-02] as the 'Prototype Approach,' versions of which are apparently being considered by several states.... It provides those small plans the buying power and access to expertise which are at the heart of MEPs, doing so without that platform's inherent difficulties." (Business of Benefits)  

[Guidance Overview]

IRS Chief Counsel Memo 2016-0035: Effect of Retirement Plan Distribution on Health Insurance Premium Tax Credit (PDF)
"You state that you took a distribution from a retirement account ... [T]he distribution was not included in the estimated household income used to compute your advance credit payments. Thus, ... your advance credit payments ... were more than the premium tax credit you are allowed ... The estimated household income used to compute advance credit payments is not used to determine a taxpayer's premium tax credit." (Internal Revenue Service [IRS])  

Best Practices for Benefit Plans During a Merger or Acquisition (PDF)
"Undertake a thorough analysis ... [Understand] the cost and time implications ... [Look beyond] retirement plans [to consider] how health account programs factor into the big benefits picture.... [R]eview the details of any equity compensation plans ... [Watch for] time-intensive data migration issues and ... new accounting rules ... [E]ngage your [plan] providers to help in your decision-making process." (Bank of America Merrill Lynch)  

[Guidance Overview]

Proposed Section 409A Deferred Compensation Regs Offer Helpful Clarifications of Current Rules
"[T]he proposed regulations [1] limit the circumstances in which the amount payable may be less than fair market value, thus creating uncertainty as to whether the stock right exemption allows a below fair market value repurchase price in other circumstances.... [2] do not address whether the parties to a change in control transaction may convert an in-the-money stock right into the right to receive payment of the stock right's intrinsic value (sometimes referred to as the 'spread') in the form of cash installments as and when the stock right would have vested absent the transaction ... [3] do not address whether payment terms in a short-term deferral agreement must satisfy the 'applicable 2-1/2 month period' deadline at all times from the inception of the agreement[.]" (Latham & Watkins)  

Advicent Product Suite Empowers Firms and Advisors to Comply with Impending DOL Fiduciary Rule while Keeping Financial Planning at the Core
Advicent

BNY Mellon's Pershing Expands its Retirement Plan Network by Adding Five New Recordkeepers
BNY Mellon

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