Retirement Plans Newsletter

July 25, 2016 logo logo LinkedIn logo Twitter logo Facebook logo
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Webcasts and Conferences

Why Health Care in America is BROKE-N and What Self-Funded Health Plans Can Do About It!
August 12, 2016 WEBCAST
Ault International Medical Management [AIMM]

Documented Confusion 2016: IRS rewrites rules on plan amendments
August 17, 2016 WEBCAST
FIS Relius Education

Attract, Retain, and Retire the Workforce of Tomorrow
September 14, 2016 WEBCAST
ASPPA [American Society of Pension Professionals & Actuaries]

Regional Conference
September 20, 2016 in PA
State and Local Government Benefits Association [SALGBA]

2016 Executive Compensation Conference
November 1, 2016 in NY
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Text of ACLI and NAIFA Memorandum in Support of Motion for Summary Judgment in Challenge to DOL Fiduciary Rule (PDF)
45 pages. "The regulation at issue here is a misguided and unprecedented intervention in the retirement savings marketplace. It will unnecessarily restrict consumers' access to annuity products and important information about those products. Yet the rulemaking failed to examine meaningfully the effects of the Rule on the annuity marketplace.... [T]he Rule will unnecessarily drive up the costs of guaranteed lifetime income products, distort the marketplace for retirement products generally, interfere with consumers' access to truthful information about those products, and worsen, not help resolve, the profound challenges facing retirement investors." [U.S. Chamber of Commerce, et al. v. Perez, No. 16-1476 (N.D. Tex., motion filed July 18, 2016)]  American Council of Life Insurers [ACLI] and National Association of Insurance and Financial Advisors [NAIFA]


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Text of U.S. Chamber of Commerce Memorandum in Support of Motion for Summary Judgment in Challenge to DOL Fiduciary Rule (PDF)
52 pages. "The Department has achieved this regulatory alchemy through a two-step process. First, it adopted an overbroad interpretation of who is a fiduciary under ERISA and certain parallel provisions of the Tax Code.... Second, the Department provided limited relief from the prohibitions resulting from this overbroad 'fiduciary' interpretation ... The Department thus exploited its limited interpretive authority to impose unworkable restrictions that necessitate exemptions, and then exploited its authority to grant exemptions by conditioning them on 'agreement' to an entirely new regulatory framework that the Department has no power to construct. And, precisely because the Department lacks enforcement authority in this area, it has delegated enforcement to private and class action litigation." [U.S. Chamber of Commerce, et al. v. Perez, No. 16-1476 (N.D. Tex., motion filed July 18, 2016)]  U.S. Chamber of Commerce

Beyond Risk Tolerance: The New Fiduciary Rule for Advisors and Retirement Planning
"The game changes almost totally for the bulk of advisors, from independents to those who work at big firms, shifting the advisory business away from commissions and third party fees and incentives, disclosed or undisclosed, and variable compensation schemes ... to what will likely become fee-only compensation favoring retainer arrangements or a menu of flat fees."  Seeking Alpha; free registration may be required

Compliance Technology Solutions Under the DOL Fiduciary Rule
"The financial services industry has not adopted a standardized advice process for advisors to consistently adhere to, in order to demonstrate their fiduciary duty of care and due diligence. Nor is there any clear agreed-upon framework to determine when a particular recommendation is 'best' or not, based on a specific set of client goals and circumstances.... [T]he DOL fiduciary rule may actually spawn the next generation of 'robo-advice' software, designed not directly for consumers, but as a compliance-driven solution to ensure that all advisors in the organization are giving the same consistent advice[.]"  Michael Kitces in Nerd's Eye View

The Problem with Investment Committees
"Three ways to help remain loyal to an investment decision when the inevitable rough patch occurs are: [1] Document and regularly review the committee's objectives and investment beliefs. [2] Clearly articulate how each investment is expected to contribute to the objectives and how it is consistent with the stated investment beliefs. [3] Regularly remind the decision makers of the range of possible outcomes associated with each investment with an emphasis on the environment in which the strategy is expected to underperform and the potential magnitude of this underperformance."  Russell Investments


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Automation Having Significant Impact on Retirement Plan Participation
"Retirement plan participation has increased 19% in the past five years because of design features that make it simple and quick for employees to participate in their workplace retirement plans.... Generationally, millennials are reaping the biggest benefit from this industry shift toward automatic features."  Employee Benefit News

Taking on the Retirement Gap: Bipartisan Interest Grows in Open MEPs
"Both the Senate Finance and the Senate Health, Education, Labor, and Pensions (HELP) Committees have highlighted the broad policymaker, industry, and stakeholder interest in the concept, which was included in the Finance Committee's Savings and Investment Working Group Report and the President's FY 2017 budget request. Moreover, industry and stakeholder support for open MEPs will likely continue to grow in the wake of recent guidance from the [DOL] endorsing state MEPs."  K&L Gates LLP

Oregon Retirement Savings Plan Set to Launch in 12 Months
"Estimates ... say the Retirement Savings Plan is expected to grow to more than 500,000 active accounts by 2032.... The format of investment will be a Roth Individual Retirement Account (Roth-IRA).... The savings rate will be 5 percent of wages for new enrollees, unless workers choose a different level.... Unless investors choose otherwise, money will be invested in age-based funds with risk profiles that evolve over time, based on the years to retirement.... Workers at larger employers will be first to start saving at the time of launch in July 2017. The plan will be phased in over several years, and workers at smaller employers will be added at later dates."

Evaluating an Early Retirement Offer
"What's the severance package? ... How does all of this affect your pension? ... Does the offer include health insurance? ... What other benefits are available? ... Can you afford to retire early? ... What if you can't afford to retire? Finding a new job ... What will happen if you say no?"  CAPTRUST Financial Advisors

Application for Benefit Suspension: Bricklayers & Allied Craftsmen Local No. 7 Pension Plan
"The Bricklayers & Allied Craftsmen Local No. 7 Pension Plan application proposing benefit suspensions can be found [at the link]. The application is organized by the items specified in Revenue Procedure 2016-27. The Bricklayers Local 7 application is currently being reviewed and the review is expected to take several months. Bricklayers Local 7's representative has advised [Treasury] that individualized participant notices were sent via U.S. mail on July 1st."  U.S. Department of the Treasury


The Public Pension Problem Is Much Worse Than It Appears
"Most state and local pension funds closed the books on their latest fiscal year on June 30, and during that 12-month period the bellwether Standard & Poor's 500 increased by less than half a percentage point. While many funds have yet to report their results for the year, early returns suggest that the industry fell well short of its lofty investment goals."  Investor's Business Daily

Benefits in General

GOP Nominates Trump, Releases Platform (PDF)
"Stating that the 'greatest asset of the American economy is the hard-working American,' the platform deems getting people back to work by fostering job creation to be its 'first priority' and 'overarching goal.' As such, the platform reflects the party's outlook on reforming current laws affecting healthcare, employment, labor and retirement. Many provisions in the platform are quite general in nature and echo policy positions previously outlined by Republicans. Highlights that will resonate with employers [are listed and described]."  Xerox HR

Executive Compensation and Nonqualified Plans

SEC Proposal: The End of Equity Compensation Plan Disclosure?
"[T]he SEC proposes to eliminate the now obsolete disclosure requirements regarding equity compensation plans.... The SEC explained that the information required under Item 201(d) can be found in other financial statements and that the listing standards by the national exchanges now require that almost all equity plans be approved by shareholders."  Bloomberg BNA

Press Releases

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