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Human Resources Analyst, Employee Benefits Department
County of Santa Clara
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Senior Plan Administrator
in GA, Telecommute

Client Service Manager
July Business Services

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July Business Services
in TX

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Webcasts and Conferences

Voluntary Fiduciary Correction Program and Abandoned Plan Program
August 17, 2016 WEBCAST
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Today's Plan Changes Create Tomorrow's Fiduciary Problems
August 17, 2016 WEBCAST

Final Wellness Program Regulations from the EEOC: New Rules and Challenges in Design and Administration
August 23, 2016 WEBCAST

Health Benefits Laws Compliance Workshop
August 23, 2016 in TX
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Specialty Drug Management: How to Control the Cost Explosion in your Health Plan
August 24, 2016 in IL
Worldwide Employee Benefits Network [WEB] - Chicago Downtown Chapter

Safe Harbor 401(k) Notices
September 28, 2016 WEBCAST
Lorman Education Services

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[Guidance Overview]

DOL Interactive ERISA Fiduciary Advisor
"The ERISA Fiduciary Advisor provides information and answers to a variety of questions about who is a fiduciary and their responsibilities under [ERISA]. This Advisor was developed by [EBSA] in its continuing effort to increase awareness and understanding about basic fiduciary responsibilities when operating a retirement plan."
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

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The Magic 3% Match
"[T]he needle of the median match remains stuck at magic number 3% (between 3% and 3.5% to be exact).... Why 3% though? What makes that number so special? Who says 3% is good enough, but not 4%? If you are cheap, why not 2%? There is no clear answer to that besides that everybody is doing what everybody else seems to be doing. Not a very well thought out or scientific approach."
Money Management Intelligence

How to Make Lump Sum Windows a Win-Win for Employers and Employees
"One of the hurdles to overcome is the fact that these employees no longer work for the organization. Making a meaningful connection with an employee who may have left the company years ago may not be easy.... There should be a postcard mailing in advance, letting everyone know there is an upcoming opportunity ... This advance notice increases the employee response rate, which for the average plan is about 60 percent."

Defined Contribution Plan Participants' Activities, First Quarter 2016 (PDF)
12 pages. "In 2016:Q1, 1.1 percent of DC plan participants took withdrawals, about the same share as in 2015:Q1. Levels of hardship withdrawal activity also remained low. Only 0.4 percent of DC plan participants took hardship withdrawals during 2016:Q1, the same share as in 2015:Q1.... Most DC plan participants stayed the course with their asset allocations as stock values only edged up a bit during the first three months of the year.... DC plan participants' loan activity edged down in the first quarter of 2016, following a seasonal pattern observed over the past several years."
Investment Company Institute [ICI]

Tech Solutions Are Key to TPAs' Future
"[T]here is a growing reliance on TPAs to deliver more technology-driven solutions that enhance an advisor's ability to win new clients and keep existing ones. This is a high-cost proposition that squeezes profit margins for small TPAs at a time when fee compression has already cannibalized revenues.... Bundled providers benefit from economies of scale that enable them to spread their technology costs over a larger base of participants.... A buying consortium provides a TPA with the ability to build a suite of technology solutions it could not afford to build or support on its own."
American Society of Pension Professionals & Actuaries [ASPPA]


Now is a great time to join Worldwide Employee Benefits Network (WEB)

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Is Using Active Investment Management a Fiduciary Breach? Part 4
"The good news for the low fee criterion is that all of the funds in that top-performing group were in the lowest 50% of the fee deciles. The not so good news is that in all but one of those deciles outperformance and low fees did not correlate more than 50%. That is, in the lowest decile for example, only 1/3 of the funds (3-of-9) of the original universe with low fees outperformed the indices in 2/3 or more of the periods measured. In other words, two-thirds of the lowest fee funds did not outperform at least 2/3 of the time. Not exactly a strong correlation!"
Fiduciary Plan Governance, LLC

Financial Advisors Implementing New DOL Rules
"87 percent of advisors are considering changes to how they do business.... 43 percent may plan to expand services offered to more holistic planning and 26 percent may plan to focus on non-qualified accounts.... Just 42 percent of advisors say they are aware of their firm's timeline for implementation or what training or support the firm will provide, while only a third (33 percent) are aware of their firm's new compliance procedures.... Only 23 percent of advisors are aware of their firms' plans with respect to adoption of the BICE to sell variable compensation products. At the same time, 78 percent identified the BICE as one of the greatest areas of impact to their business."
Nationwide Financial Services, Inc.

Duke Latest School Snared by Coordinated ERISA Lawsuits
"[T]he firm targeted Duke's $4.7 billion retirement plan, which the firm says charged excessive fees and included too many investment options -- allegedly more than 400 -- which drove up fees and caused investors to suffer from 'decision paralysis.' ... The lawsuits are noteworthy for making the novel argument that plan fiduciaries can breach their duties by including too many investment options in a plan."
Bloomberg BNA

Why is K-12 403(b) Plan Design Stuck in the 90's?
"[W]ith the advent of the final 403(b) regulations, public colleges and universities [have seen] a significant shift to single-recordkeeper platforms for their 403(b) and other defined contribution retirement plans ... However, ... in the world of K-12 (and, K-14 in some areas) there are often too many 403(b) providers to count, and a single recordkeeper platform is a rarity. Did the marketplace evolution that changed most of the rest of the 403(b) marketplace for the better simply bypass 403(b) plans for educators?"
Cammack Retirement Group

Impact of 2008 Still Being Felt by Pension Plans
"At its low in March, 2009, typical funded status (on a fully marked-to-market basis) had fallen by some 30%. That was mainly the result of a sharp fall in asset values. But while asset values have subsequently recovered, funded levels have not; it's been the liability side of the balance sheet -- not the asset side -- that has hindered the recovery."
Russell Investments

Public DB Plans Adding Risk to Combat Funding Crisis as Contributions Rise
"[J]ust less than 65% of total investible public DB assets were invested in equity-like investments in 2015, down from a high of about 65% in 2013 but up from where it was in each of the previous five decades (roughly 60% in 2005, 54% in 1995, 30% in 1985, 19% in 1975 and 7% in 1965).... In 2014, total state and local government pension contributions fell $16.5 billion short of actuarially required contributions, with 33 plans underpaid by $100 million or more[.]"
Pensions & Investments

DOL Grant Opportunity: Portable Retirement Benefits Planning
"This grant program is intended to increase retirement security for low-wage workers -- many of whom have never had access to retirement benefits through an employer. The grant will help nonprofit organizations ... undertake certain types of program-planning activities needed to develop a portable retirement benefits program for their stakeholders or target populations. These activities must fall into one or more of the following three categories: [1] Assessment of the challenges and barriers unique to low-wage workers or target populations with little or no retirement savings; [2] Research and analysis of available opportunities and tools to expand existing or build new portable retirement savings vehicles, especially for low-wage workers or target populations; and [3] Research and analysis of scalable models for portable retirement benefits programs, as well as identification of legal constraints and changes to state and/or federal law that would be required in order for these models to be viable for low-wage workers or target populations."
Employment and Training Administration, U.S. Department of Labor [DOL]

Choosing a Beneficiary for Your IRA or 401(k)
"[Y]ou need to know the impact of income tax and estate tax laws in order to select the right beneficiaries. Although taxes shouldn't be the sole determining factor ... ignoring the impact of taxes could lead you to make an incorrect choice. In addition, if you're married, beneficiary designations may affect the size of minimum required distributions to you from your IRAs and retirement plans while you're alive."
CAPTRUST Financial Advisors

Benefits in General

Active Life Expectancy in the Older U.S. Population, 1982-2011: Racial Differences Persisted
"[The authors] examine changes in active life expectancy in the United States from 1982 to 2011 for white and black adults ages sixty-five and older. For whites, longevity increased, disability was postponed to older ages, the locus of care shifted from nursing facilities to community settings, and the proportion of life at older ages spent without disability increased. In contrast, for blacks, longevity increases were accompanied by smaller postponements in disability, and the percentage of remaining life spent active remained stable and well below that of whites. Older black women were especially disadvantaged in 2011 in terms of the proportion of years expected to be lived without disability."
Health Affairs

Executive Compensation and Nonqualified Plans

[Guidance Overview]

IRS Issues Proposed Revisions to Section 409A Regs
"The proposed regulations clarify that the provisions relating to payments made upon death of a service provider apply equally to beneficiaries of a service provider. In addition, 409A will also allow payments to beneficiaries upon their disability or in the event of an unforeseeable emergency.... The proposed regulations clarify that ... if a service recipient maintains multiple plans of the same type that cover different unique employee populations, all such plans must be terminated if the service provider wishes to use the bankruptcy rule to terminate one or more such plans -- even though no employee participates in more than one such plan of the service provider."
Alvarez and Marsal

CEO Pay Ratio: Tricky to Calculate, Communicate
"335:1. 276:1. 247:1. 71:1. Those figures represent alternative ways to calculate the ratio of CEO pay to worker pay in the United States -- a ratio that every public company will be required to report starting in 2018.... [T]here is some flexibility in the SEC rule that allows a company to select its methodology for identifying its median employee and that employee's compensation. The question remains how the ratio should be calculated to create the most direct comparison between how CEOs and employees are paid."

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David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

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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