Retirement Plans Newsletter

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Employee Benefits Jobs

Document Analyst - Employee Benefits Paralegal
Midwest Plan Administration and Consulting Firm
in IN, KY, OH

Retirement Account Administrator
Alerus Financial
in MI, NH

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Webcasts and Conferences

Voluntary Fiduciary Correction Program
August 31, 2016 in UT
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

2016 Legislative & Regulatory Updates
September 13, 2016 WEBCAST
ECFC [Employers Council on Flexible Compensation]

Class Action Litigation Against Fiduciaries
September 20, 2016 WEBCAST
Multnomah Group

HSA Basics
October 20, 2016 WEBCAST

ACA Fall 2016 Compliance
October 26, 2016 in CA
ACA Compliance Group

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[Official Guidance]

Text of PBGC Disaster Relief Announcement 16-10, Relating to PBGC Deadlines in Response to Severe Storms and Flooding in Louisiana
"If the plan administrator of a plan is a Designated Person, PBGC will, for purposes of assessing any late payment or late information penalty, treat as timely any premium filing required to be made for the plan beginning on or after August 11, 2016, and on or before January 17, 2017, if the filing is made by January 17, 2017. Thus, for any such filing, PBGC will waive the applicable penalty, but not the applicable interest charge.... If the plan administrator of a plan that is terminating in a standard termination is a Designated Person, any of the following plan termination deadlines for the plan that fall on or after August 11, 2016, and on or before January 17, 2017, are extended to January 17, 2017[.]"
Pension Benefit Guaranty Corporation [PBGC]


October Certificate Series in Boston - Last Call this Year!

Sponsored by International Foundation of Employee Benefit Plans [IFEBP]

The Certificate Series offers comprehensive educational opportunities in each area of total compensation. Take a single course in a specific area or take three courses to earn a Certificate of Achievement in the discipline of your choice. Learn More.

IRS Clarifies Key Step in Voluntary Correction Program
"[I]f a plan sponsor finds out it can't satisfy the compliance statement within the 150-day time period, it can reach out to the VCP specialist ... and request an extension. The plan sponsor needs to explain why the extension is necessary and, if it can't make the changes by the end of the approved correction period, its compliance statement becomes invalid. And if the deadline is missed, employers will have to do a whole new VCP submission with a new fee along with the previous compliance statement and the reasons why the corrections weren't completed."
HR Benefits Alert

Rewriting the Future of Work and Retirement
"[Lockton consultant Rick Unser] described a shift to a 'gig economy,' one where both younger and near-retirement aged workers would trade long-term careers with a single employer for a series of shorter-term employment options.... The need to adapt ... creates challenges for employers. 'Right now we are administering a 1950s retirement plan in a 2020 economy,' said [Dr. Joe Coughlin, of MIT's AgeLab]. 'Having to adapt to this entirely new environment of rapid change, we are going to need to re-invent how we engage our employees around retirement savings.' "

An Equilibrium Theory of Retirement Plan Design
"[The authors'] theory provides novel explanations for a range of facts about retirement plan design, including the use of employer matching contributions that result in cross-subsidization of rational workers by myopic workers, the use of default employee contribution rates in automatic enrollment plans that lower, rather than raise, workers' savings, and the inclusion of high-fee funds among plans' investment options. These equilibrium outcomes call into question the practice of depending on employers to design plans to counteract the mistakes of workers."
Ryan Bubb and Patrick L. Warren, via SSRN

Currency Risk and Strategies in Pension Funds
"Passive hedging of currency risk is the easiest approach and the most cost effective solution in terms of transactions.... [Dynamic management] will be mostly advantageous if the volatility of the exchange rates is high.... An active management of currency risk is usually more costly.... [T]he active manager will be able to actively decide the currencies that are most advantageous to invest in and alter your portfolio's exposure accordingly."
Xerox HR Insights


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

Sponsored by WEB - Worldwide Employee Benefits Network

WEB members represent more than 25 professions and 30 areas of expertise within the pension and benefits industry-including administrators, consultants, attorneys, accountants, investment managers, communications experts and benefits managers. Join today.

Interesting Angles on the DOL's Fiduciary Rule, Part 16
"The DOL has created the concept of 'hire me' and explained that touting one's own advisory services (as opposed to products or strategies) is not a fiduciary act.... Advisers should be careful in using this approach. While it's not fiduciary advice to explain one's services and fees, if the discussion also includes the recommendation of a particular investment or strategy (or a rollover), that's fiduciary advice."

Survey of Plan Sponsors Provides Insights for Plan Advisors
"Plan sponsors that proactively manage plans will change advisors if their needs are not being met. The No. 1 reason for plan sponsors to make a change is the need for a more knowledgeable advisor.... The top three reasons plan sponsors began using an advisor: [1] Concerned about fiduciary duties: 38%. [2] Needed help with plan investments: 32%. [3] Needed a better understanding of how well the plan is working for participants: 20%."
Fidelity Investments

403(b) Plans in the Crosshairs: Fee Litigation Finds New Targets
"Plaintiffs are asking the courts to make new law in this area.... [1] 403(b) Plans are a new target.... [2] Too many options.... [3] Too many recordkeepers.... [4] Splitting business and asset classes defeats lower fees.... [5] Using a money market fund rather than a stable value fund.... [6] New proprietary fund cases.... [7] Annuity Investments and CREF Stock Fund."
Cohen & Buckmann pc

Columbia University Faces $100 Million Lawsuit Over Retirement Plan
"The complaint says the Ivy League university, based in New York, retained expensive and poor-performing investment options that consistently underperformed their benchmarks.... The plaintiff in the case is an unidentified faculty member at Columbia who is suing on behalf of herself and 27,000 current and former Columbia employees and is seeking class action status for the case."


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.

Q2 Fixed Indexed Annuity Sales Shatter Quarterly All-Time Record
"[F]ixed indexed annuity sales were $16.2 billion, 30 percent higher than prior year ... In the first half of the year, indexed annuity sales increased 32 percent to $31.9 billion, compared with the first six months of 2015.... In the second quarter, VA sales totaled $26.9 billion, down 25 percent. VA sales fell 22 percent in the first 6 months of 2016 to $53.5 billion."

Maryland Pension System Misses Earnings Target
"Maryland's public pension system missed its annual target for returns by more than six percentage points in fiscal 2016, marking the second consecutive year that the retirement program fell short of its goal. The $45.5 billion investment portfolio earned 1.16 percent after fees for the fiscal year that ended June 30, well below the fund's annual objective of 7.55 percent ... In 2015, growth was 2.68 percent."
The Washington Post; subscription may be required

European Pension Regulation Revised, Further Encourages Cross-Border Pensions, Pushes Social Investing (PDF)
"In July, 2016, the European Commission issued the final text of a revised Institutions for Occupational Retirement Provision (IORP) ... It will not result in any immediate changes ... However, it is notable for its effort to nudge cross-border pensions a little further down the road by clarifying their manner of regulation, as well as some other items which have been included, such as social investing (environmental, social and governance, or 'ESG'), or specifically not included, such as EU-level funding rules."
Groom Law Group


Ten Years After Enactment, the Pension Protection Act Falls Short of Promises
"Ten years ago today President George W. Bush signed into law the Pension Protection Act of 2006. It was the largest, most comprehensive U.S. pension reform bill since the mother of them all, [ERISA]. Though the new legislation was promoted as a means of preventing future funding problems in private sector defined benefit plans, the act has not lived up to its name. In fact, some pundits refer to the PPA as the Pension Destruction Act."
Institutional Investor


The $6 Trillion Public Pension Hole That We're All Going to Have to Pay For
"U.S. state and local employee pension plans are in trouble -- and much of it is because of flaws in the actuarial science used to manage their finances. Making it worse, standard actuarial practice masks the true extent of the problem by ignoring the best financial science -- which shows the plans are even more underfunded than taxpayers and plan beneficiaries have been told. The bad news is we are facing a gap of $6 trillion in benefits already earned and not yet paid for, several times more than the official tally."

Press Releases

Employee Benefits (ERISA) Lawyer of the Year
Wilkins Finston Law Group LLP

Connect   LinkedIn logo   Twitter logo   Facebook logo, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
(407) 644-4146

Lois Baker, J.D., President
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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