Retirement Plans Newsletter

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Employee Benefits Jobs

Webcasts and Conferences

Department of Labor 401(k) Audits - How Not to Get Selected and How to Survive if you Do
August 24, 2016 WEBCAST
Mullen & Henzell L.L.P.

Voluntary Fiduciary Correction Program
August 29, 2016 in NV
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Voluntary Fiduciary Correction Program
August 30, 2016 in NV
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Election 2016: What's at Stake for Group Health Plans?
August 30, 2016 in NC
Hill, Chesson & Woody

Learn How to Keep Wellness Thriving and Complying
September 8, 2016 WEBCAST
Bond, Schoeneck & King, PLLC

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[Official Guidance]

Text of PBGC Interest Rate Update for September 2016
"The September 2016 interest assumptions under the benefit payments regulation will be 0.50 percent for the period during which a benefit is in pay status and 4.00 percent during any years preceding the benefit's placement in pay status. In comparison with the interest assumptions in effect for August 2016, these interest assumptions are unchanged."
Pension Benefit Guaranty Corporation [PBGC]


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Application for Benefit Suspension: Bricklayers and Allied Craftsmen Local No. 5 Pension Plan
"The Bricklayers and Allied Craftworkers Local 5 New York Retirement Fund 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."
U.S. Department of the Treasury

Four More Top Universities Targeted for Fiduciary Breaches in 403(b) Plan Management
"Duke University, Johns Hopkins University, University of Pennsylvania and Vanderbilt University became the latest universities to be sued over allegedly breaching their fiduciary duties in the management of their 403(b) plans.... [T]he latest lawsuits argued the four plans have too many record keepers and too many investment options. The Johns Hopkins plan has five record keepers and more than 440 investment options; the Duke plan has four record keepers and more than 400 investment options; Vanderbilt, four and 340; and UPenn, two and 78."
Pensions & Investments

'Tipping Off' Potential ERISA Fiduciary Violations
"[H]aving so many options within a plan is a 'tip-off' that the plan sponsor has not properly performed their fiduciary duty to conduct an independent and thorough investigation and analysis of the investment options within their plan.... The sheer number of funds raises obvious questions as to whether the required investigation was done properly, if at all. A good plaintiff's attorney will obviously ask for documentation verifying both the investigation and its findings."
The Prudent Investment Adviser Rules

Solving the Retirement Savings Paradox One Plan Sponsor at a Time
"[One company] boosted deferral rates and overall retirement readiness among its participants by taking a few simple steps, including: [1] An annual sweep of nonparticipants into an age-appropriate Target Retirement Trust every year at 5% of pay. [2] Maximizing the company match dollar for dollar on the first 3% of pay and 50 cents on the dollar for the next 2%. [3] Raising the cap on autoescalation from 10% to 15%. Within six months of these changes, the manufacturer's participation rate jumped to close to 100% and the percentage of participants deferring at least 5% (9% including the company match) rose to 96%."


Section 409A: Structuring Compliant Plans and Avoiding Pitfalls

Sponsored by Lorman and BenefitsLink

August 31 webinar. Provides a good foundation for identifying arrangements that are subject to Section 409A and for designing and administering these nonqualified deferred compensation plans in a legally compliant manner.

A Powerful Combination: Target-Date Funds and Managed Accounts
12 pages. "The use of professionally managed allocations like TDFs and managed accounts is transforming participant portfolios. Both options provide significant benefits and should be offered as complementary strategies to address the diverse needs of evolving participant populations."

Plan Loans: Whose Money Is It Anyway, and Why Should You Care? (PDF)
20 pages. "Among 330 employers with defined contribution plans surveyed in 2015, 95 percent permitted loans from their defined contribution plans, and, over the past 15 years, at least 94 percent have permitted plan loans.... [I]mproper plan loans are among the most common compliance errors found by the [IRS]. Permitting plan loans entails a number of additional administrative and legal requirements for which the plan sponsor is generally responsible."
Aon Hewitt, Via Journal of Pension Planning and Compliance

How Has Pension Wealth Changed Over Time?
"Participation in employer-sponsored retirement plans has declined over time. Even though participation in 401(k)-style plans has risen, it has not offset the decline of defined benefit pensions.... [H]igh-income households had 52 percent of the wealth in 401(k)-style plans, compared to just 35 percent of the wealth in defined benefit plans.... [T]he increase in 401(k)-style plans has caused a decrease in the wealth-to-income ratio ... because the wealth accumulated in 401(k)-style plans is not easily transformed into income in retirement."
National Public Pension Coalition

12 No-Tax and Low-Tax Retirement Plan Distributions
"[1] Roth plans.... [2] Tax-free rollovers and transfers.... [3] Life insurance proceeds, contracts.... [4] Recovery of basis.... [5] Special averaging for lump-sum distributions.... [6] Net unrealized appreciation of employer securities (NUA).... [7] No tax when annuity contract is passed out.... [8] Return of IRA contribution.... [9] Income tax deduction for certain beneficiaries.... [10] Distribution to charitable entity.... [11] Qualified Health Savings Account Funding Distributions (QHSAFD).... [12] QDROs and divorce-related IRA divisions."
Morningstar Advisor


Principles for Designing State-Enacted Retirement Savings Programs for Private Sector Employees (PDF)
"[1] An employer should be exempt from a state program's mandate if it offers a retirement plan that meets required participation and nondiscrimination rules... [2] A state should not be able to regulate the features of an employer's plan.... [3] Policy changes intended to increase plan coverage should build upon our existing and successful system ... [4] The ability for employers operating in multiple states to administer benefits uniformly should be vigorously protected.... [5] Employers should not be subject to multiple or conflicting state requirements.... [6] There must be a level playing field between the states and private service providers."
American Benefits Council

Benefits in General

Insights for Optimizing Your Employee Benefit Programs (PDF)
12 pages. "Nearly two-thirds (65%) of surveyed finance executives said that employee benefits are critical to attracting and retaining employees, and 63% indicated employee satisfaction with benefits is important for their company's success.... [S]everal trends are challenging employers to think more holistically about their benefit offerings and the outcomes they wish to achieve through these offerings."

Executive Compensation and Nonqualified Plans

Equity Compensation Trend: Extending the Time to Exercise Vested Stock Options
"Providing an extended period to exercise vested stock options is not a new idea. In the past, employers have considered this approach, typically on a case-by-case basis, if the employee was in good standing and unique circumstances were present upon termination or if the employee has some degree of leverage in negotiating his or her departure. What is new is the trending consideration to provide an extended post-termination exercise period to employee option holders generally."
DLA Piper

Press Releases

DOL Obtains Default Judgment Against Former Fiduciary of Sommet Group Employee Benefit Plan in Tennessee
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

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David Rhett Baker, J.D., Editor and Publisher
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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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