Retirement Plans Newsletter

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Employee Benefits Jobs

Retirement Plan Consultant
SuperiorUSA Benefits
in IA, MN

Sr Compliance Specialist / Manager -- ERISA Compliance
Simpkins & Associates
in TX

Pension Implementation Project Manager
Willis Towers Watson
in CA, CO, IL, MN, TX

Junior Defined Contribution (DC) Administrator
Planned Retirement Consultants & Administrators, LLC
in NJ

Director of Retirement Plan Compliance
Newport Group
in IL

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Webcasts and Conferences

Waiver of 60-Day Rollover Requirement
September 8, 2016 WEBCAST
Convergent Retirement Plan Solutions, LLC

Statewide Pension Fund Seminar Fall 2016
September 14, 2016 in NY
Bond, Schoeneck & King, PLLC

Collection Procedures Institute
September 19, 2016 in MA
International Foundation of Employee Benefit Plans [IFEBP]

QDROs: Breakiní Up Really Is Hard to Do [2016]
September 28, 2016 WEBCAST
FIS Relius Education

Defined Contribution Plan Boot Camp
November 3, 2016 in MA
New England Employee Benefits Council

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[Official Guidance]

Text of IRS Ann. 2016-30: Relief for Victims of Louisiana Storms (PDF)
"This announcement provides relief to taxpayers who have been adversely affected by the recent storms and flooding in Louisiana that began August 11, 2016, (Louisiana Storms) and who have retirement assets in qualified employer plans that they would like to use to alleviate hardships caused by the Louisiana Storms. In addition, this announcement provides relief from certain verification procedures that may be required under retirement plans with respect to loans and hardship distributions.... The parishes included in the covered disaster area for the Louisiana Storms are identified in the News Release issued by the IRS for victims of the storms and flooding in Louisiana ... Plan administrators may rely upon representations from the employee or former employee as to the need for and amount of a hardship distribution, unless the plan administrator has actual knowledge to the contrary, and the distribution is treated as a hardship distribution for all purposes under the Code and regulations."
Internal Revenue Service [IRS]


Save Time & Money by Filing 5500s with ASC

Sponsored by ASC

The ASC 5500 System includes batch "roll forward" & 5558 creation, customized "invite signer" emails, and auto-data sharing with other ASC systems - saving you time and money! See how!

[Guidance Overview]

Text of IRS IR-2016-115: Retirement Plans Can Make Loans, Hardship Distributions to Louisiana Flood Victims (PDF)
"Participants in 401(k) plans, employees of public schools and tax-exempt organizations with 403(b) tax-sheltered annuities, as well as state and local government employees with 457(b) deferred-compensation plans may be eligible to take advantage of these streamlined loan procedures and liberalized hardship distribution rules. Though IRA participants are barred from taking out loans, they may be eligible to receive distributions under liberalized procedures."
Internal Revenue Service [IRS]

[Guidance Overview]

Retirement Plan Rollover Rules Relaxed: The 'I Lost It' Excuse May Actually Work
"An automatic waiver is of limited application as it only applies in a direct rollover scenario where the new plan or financial institution receives the funds before the end of the 60-day rollover period but fails to deposit them into a plan or IRA within the 60-day period due to no error of the participant. In this situation, the funds must actually be deposited into the plan or IRA within one year from the beginning of the 60-day rollover period.... Apparently appreciating the commonplace issues that arise with rollovers and seeking to avoid unintended 'leakage' of retirement plan assets from retirement vehicles for those that do not have the time or financial resources to pursue a PLR ... [Rev. Proc. 2016-47] provides taxpayers with a new mechanism to facilitate a rollover, even if a technical failure to comply with the 60-day rule has occurred."
Michael Best & Friedrich LLP

[Guidance Overview]

IRS Eases Procedure for Late Rollovers
"[T]he potential to miss the deadline can be easily and entirely avoided by making a direct trustee-to-trustee transfer of the funds.... [T]axpayers are allowed to make only one nontaxable 60-day rollover within each one-year period even if the rollovers involve different IRAs. This once-a-year limitation does not apply to direct trustee-to-trustee transfers."
Baker Newman Noyes

[Guidance Overview]

IRS Clarifies Treatment of Disregarded Single Member LLC Employees in 403(b) and 457(b) Plans of the Tax-Exempt Member of the LLC
"[GCM 201634021] provides the following clarifications: [1] A [single member limited liability company (SMLLC)] that does not elect to be taxed as a corporation is disregarded with respect to its member for purposes of the 403(b) and 457(b) eligible employer requirements. Therefore, if the SMLLC's member is an eligible employer, then the SMLLC is also an eligible employer for both 403(b) and 457(b) plans. [2] Employees of a SMLLC generally must be allowed to participate in a 403(b) plan sponsored by the member in order to avoid violating the 'universal availability' rule applicable to such a plan under Code Section 403(b)(12)(A)(ii). [3] Employees of a SMLLC may be allowed participate in a 457(b) plan sponsored by the member."
Bradley Arant Boult Cummings LLP


SPARK Forum - November 6-8, 2016 -- The Breakers, Palm Beach, FL

Sponsored by SPARK

Join us at the retirement services industry's leading event for top marketing, sales, administration and record keeping professionals. Comprehensive agenda to meet the needs of 401(k) Plan Providers, Financial Advisors and Third Party Administrators.

[Guidance Overview]

DOL Finalizes Regulation on State Automatic IRAs and Proposes Extension to Cities and Other Political Subdivisions (PDF)
"The automatic IRA program must be established pursuant to state law, and the DOL has made clear that a state agency or instrumentality may administer the automatic IRA program ... The state or a state agency must also select the investments available under the IRAs.... [T]he role of the employer is generally limited to forwarding employee contributions, providing notices and program information to employees, and providing information necessary to facilitate the operation and administration of the automatic IRA program."
Groom Law Group

[Guidance Overview]

DOL Finalizes Rules for State-Run Retirement Programs (PDF)
"While primarily relevant to private sector employers that do not sponsor a retirement savings plan for their employees, the guidance may also affect sponsors of plans with eligibility provisions that limit participation to less than 100 percent of their employee population."
Xerox HR Services

First Citizens Can't Dodge ERISA Suit Challenging Stock Drop
"[The judge] assumed without deciding that a recent U.S. Supreme Court decision on ERISA-based challenges to employer stock drops would apply to the stock plans of privately held companies. This assumption runs contrary to the [DOL]'s stated position and [Allen v. GreatBanc Trust, decided by the Seventh Circuit] just one day before the judge decided this case." [Brannen v. First Citizens Bankshares Inc., No. 15-00030 (S.D. Ga. Aug. 26, 2016)]
Bloomberg BNA

Best Practices for Plan Fiduciaries
78 pages. "Whether an employer is offering a DB or a DC retirement program, there are four principal best practices at the heart of good fiduciary conduct: [1] Organization of committees. [2] Investment selection and monitoring. [3] Plan costs. [4] Administrative oversight."

Communicating Plan Changes (PDF)
"Communicating change is a delicate thing, walking a fine line between success and failure. There are three categories of pitfalls: campaign pitfalls, employee pitfalls, and manager pitfalls.... When companies introduce an employee stock ownership plan (ESOP), they face a double challenge: our natural resistance to change coupled with a general lack of familiarity with ESOPs."
Bryan, Pendleton, Swats & McAllister, PLLC

How the Federal Reserve Affects Pensions
"Changes in bond and/or stock prices will have a direct effect on the assets held in a pension plan, while the liabilities of a pension plan are only affected by the changes in bond price.... For a typical plan with a conservative asset allocation, recent rate hikes do not seem to materially affect the funded status. Plan sponsors should consult with their actuary to run sensitivity analyses to determine the funded status volatility of rate hikes for a specific pension plan."
Bryan, Pendleton, Swats & McAllister, PLLC

Military's New Hybrid Retirement Plan a Mixed Bag
"The military, which currently has a traditional defined benefit plan, will adopt a new hybrid program next year that blends an existing defined benefit for career personnel with a matching contribution to a 401(k)-style account aimed at covering those who don't make a lifelong career of the military. It's the biggest overhaul in retirement benefits in years -- and it's a mix of good and bad news for military personnel.... Under the new blended system, the value of defined benefit retirement pay will be cut by 20% to make way for matching contributions to service members' defined contribution accounts."


California State-Run Retirement Plan Has Deep Flaws
"The most obvious reason to question Secure Choice's prospects is that most of the workers at companies without retirement benefits are very low paid and mired in poverty; millions live paycheck to paycheck. What may not be obvious to affluent supporters is that these workers' lives could be disrupted by a de facto 3 percent pay cut. The opt-out rate is likely to be sky-high -- and the more people opt out, the more difficult it will be for the state fund to meet the eventual requirement that administrative costs be no higher than 1 percent of assets."
The San Diego Union-Tribune


Society of Actuaries to Publish Controversial Report on Public Pension Plan Financing
"Working under the auspices of both our organization and the American Academy of Actuaries, we were unable to reach an agreement with the authors on a version acceptable to all parties through our standard editing process. Nevertheless, on Thursday, Aug. 25 ... [the SOA] informed the authors of the paper of our plans to publish the paper representing their views in the SOA's Pension Forum publication. The publication is anticipated by the end of October[.]"
Society of Actuaries


Are U.S. Public Pensions Crumbling?
"Declining or negative rates will effectively mean soaring pension liabilities.... [T]he duration of pension liabilities (which typically go out 75+ years) is much bigger than the duration of pension assets so any decline in rates will disproportionately and negatively impact pension deficits no matter what is going on with risk assets like stocks, corporate bonds and private equity.... Stop focusing on assets and focus on growing liabilities in a deflationary world where people are living longer and introduce risk-sharing and better governance at your public pensions."
Pension Pulse

Benefits in General

EBSA Launches New Website [Video]
"This video provides an overview of the new EBSA website organization to help visitors become familiar with the new navigation."
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL], via YouTube

Distributional Effects of Applying Social Security Taxes to Employer-Sponsored Health Insurance Premiums
"This policy brief analyzes how applying the Social Security tax to employer-sponsored health insurance premiums could affect Social Security beneficiaries.... [F]or most Social Security beneficiaries aged 60 or older from 2017 to 2080, benefits would gradually increase and the poverty rate would decrease faster than the rate under current law. Counting employer-sponsored health insurance premiums as wages for Social Security purposes would increase Social Security taxes for most individuals and those taxes would increase more than Social Security benefits for individuals at all earning levels."
Office of Retirement and Disability Policy, U.S. Social Security Administration [SSA]

HSA Plans: A Retirement Benefit in Disguise? [Podcast]
"[This discussion explains] how employees at various stages in life can take advantage of HSAs, how they contribute to the evolving conversation of improving both health and wealth and ideas around creating benefits bundles to guide employee decision making. [It also includes] insights for employers about the importance of setting up internal cross functional teams between health and retirement benefits, how involving company leadership is paramount to success and why you need to have a three year plan for your benefits strategy."


Joint Comment Letter to IRS Requesting Extension of Time for Comments on Proposed Revision of Annual Information Return/Reports (Form 5500) (PDF)
"We respectfully request a 90-day extension of the deadline for public comments on the Proposal, currently scheduled to end on October 4, 2016.... The comment period coincides with the busiest time of the year for Form 5500 practitioners ... Those within firms that will need to review the Proposal and develop meaningful comments are fully engaged in implementing the final fiduciary rule.... The effect of the Proposal on plan sponsors -- particularly smaller employers -- requires sufficient time to assess.... Major changes to health plan reporting must be analyzed carefully while resources are still being expended to deal with ACA reporting."
The SPARK Institute, American Benefits Council, Investment Company Institute [ICI], and Plan Sponsor Council of America [PSCA]

Press Releases

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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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