Retirement Plans Newsletter

September 9, 2016

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Employee Benefits Jobs

Payroll Audit Manager
Sheet Metal Workers' National Pension Fund
in VA

401(k) Retirement Plan Administrator
Alliance Pension Consultants, LLC
in IL

401(k) / DC Administrator
Continental Benefits Group, Inc.
in NJ

Sr Plan Administrator
American National Insurance Company
in TX

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Webcasts and Conferences

Determining Full-time Employee Status under the Affordable Care Act
September 22, 2016 WEBCAST
IRS [Internal Revenue Service]

Workplace Wellness Initiatives & Employee Engagement
September 27, 2016 in MA
Sapers & Wallack, Inc.

Employee Benefits Update: Latest Guidance and Developments in Health and Welfare Plans
October 14, 2016 WEBCAST
American Law Institute Continuing Legal Education Group [ALI CLE]

Data Mining
November 9, 2016 WEBCAST
Conference of Consulting Actuaries

Los Angeles Advanced Pension Conference
January 19, 2017 in CA
ASPPA College of Pension Actuaries [ACOPA]

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Discussions


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[Guidance Overview]

2017 Mortality Table Status
"[No] meaningful changes to the mortality table will be made for 2017.... [T]he IRS indicated that it intended to release a draft of the 2018 tables in the near future.... [T]he IRS is expected to adopt a wholesale change in the mortality table selection, presumably based on some form of the RP-2014 tables ... It is expected that the new tables would increase the Funding Target (liability) of plans for minimum funding purposes by around 10%."
Findley Davies

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[Guidance Overview]

New Rollover Self-Certification Opportunity: 'Buyer Beware'?
"The most sure and certain of its positive effects is to grant protection to IRA custodians and trustees, and plan administrators, who ... may rely on the representations of the taxpayer providing the certification, unless they have actual knowledge that the reason is invalid. The real ambiguity is faced by the taxpayer himself.... Missing are details to help a taxpayer be certain that he or she meets some of these less-than-straightforward conditions for self-certification."
Ascensus

[Guidance Overview]

I Know My Rollover is Late, but It's Okay -- Trust Me.
"For employers, this ruling may result in some questions from their third party administrators.... For example, if an employee comes forward with a self-certification that does not clearly fit into the list, but is close, the TPA may request that the plan administrator (which may be the employer or someone there) make a decision about whether the certification is sufficient. Practically, however, certifications outside this specific list should not be accepted."
Benefits Bryan Cave

Text of GAO Report: 401(k) Plans -- DOL Could Improve Use of Lifetime Income Options
"This report examines ... what is known about the adoption of lifetime income options in 401(k) plans, barriers that deter plan sponsors from offering such options, and the defaults that exist for participants who do not choose a lifetime income option.... GAO makes seven recommendations to DOL, including that it [1] clarify the criteria to be used by plan sponsors to select an annuity provider, [2] consider providing limited liability relief for offering an appropriate mix of lifetime income options, [3] issue guidance to encourage plan sponsors to select a record keeper that offers annuities from other providers, and [4] consider providing RMD-based default lifetime income to retirees."
U.S. Government Accountability Office [GAO]

Important Facts About 401(k) Plans (PDF)
14 pages. "401(k) plans are the largest share of DC plan assets, with more than two-thirds of DC plan assets held in 401(k) plans.... More than one-third of 401(k) plan participants are younger than 40.... Most 401(k) plan participants receive plan contributions from their employers.... Equities figure prominently in 401(k) plans, and younger 401(k) plan participants are highly engaged in equity investing.... 401(k) plan participants have concentrated their assets in lower-cost funds.... Fewer than one in five 401(k) plan participants have loans outstanding."
Investment Company Institute [ICI]

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Proposal Would Crack Down on Tax Avoidance in Retirement Plans, Create New Opportunities for Working Americans to Save
"In addition to cracking down on 'mega Roth IRAs,' the draft proposal would: [1] Allow employers to make 'matching' contributions to a 401(k) retirement plan while their employees make student loan repayments.... [2] Eliminate Roth conversions for both IRAs and employer-sponsored plans ... [3] Eliminate 'stretch IRAs' ... [4] Gradually increase the age at which retirement plan participants are required to begin taking distributions from their accounts.... [This] discussion draft ... is being circulated to stakeholders, members of Congress, federal officials and others for review and comment." [Also available: a one-page summary of the legislative proposal, a longer summary; full legislative text, and a Joint Committee on Taxation technical explanation.]
Committee on Finance, U.S. Senate

Rep. John Kline Releases Discussion Draft to Modernize Multiemployer Pensions
"[T]he proposal follows years of bipartisan work led by a coalition of business and labor leaders and would provide workers a new option to save for retirement by authorizing an innovative multiemployer plan structure known as 'composite plans.' The draft reflects input from employers, worker representatives, and retiree advocates. The committee is requesting public feedback on the proposal." [Also available: Text of discussion draft; section-by-section outline of the discussion draft; summary of the discussion draft; and answers to basic questions.]
Committee on Education and the Workforce, U.S. House of Representatives

Application for Multiemployer Plan Benefit Suspension: United Furniture Workers Pension Fund A
"The United Furniture Workers Pension Fund A ('UFW Pension Fund A') application proposing benefit suspensions can be found below. The application is organized by the items specified in Revenue Procedure 2016-27. The UFW Pension Fund A application is currently being reviewed and the review is expected to take several months."
U.S. Department of the Treasury

District Court Rules on ERISA Liability of Board and ESOP Advisory Committee Members in ESOP Transactions
"The lengthy decision ... not only provides a detailed view of the inner workings of an ESOP transaction, evaluated by testimony from numerous expert witnesses, but also gives validation to the importance of using thorough, well-documented processes at every step in an ESOP transaction." [Fish v. GreatBanc Trust Co., No. 09-01668 (N.D. Ill. Sept. 1, 2016)]
Holland & Knight

JPMorgan Wins Again in ERISA Challenge to 'London Whale'
"In a terse, five-page order, the U.S. Court of Appeals for the Second Circuit said that the lawsuit was based on 'wholly conclusory' allegations that were insufficient to state a claim for fiduciary breach under [ERISA]. This decision reinforcing the high bar that employees must clear to bring ERISA challenges to stock losses comes one day after a federal judge used the same high bar to dismiss a similar lawsuit against International Business Machines Corp. Lehman Bros., Pilgrim's Pride Corp. and Edison International have all prevailed in recent lawsuits making similar claims." [Loeza v. JPMorgan Chase & Co., No. 16-222 (2d Cir. Sept. 8, 2016; unpub.)]
Bloomberg BNA

Plan Fiduciaries Prevail in ERISA Lawsuit Challenging Plan Investments and Fees
"The Court was very pointed ... in its opinion that the current theories of the participants suffer from lack of factual support, speculative hindsight analysis and willful refusal to consider other characteristics relevant to the prudence of investment options beyond fees, such as risk profiles and investment strategies[.]" [White v. Chevron, No. 16-0793 (N.D. Ca. Aug. 29, 2016)]
Calfee, Halter & Griswold LLP

Almost Half of Projected IRA Rollover Assets 'At-Risk' Post-DOL Conflict of Interest Rule
"New research ... suggests more assets in the retirement industry will remain in employer-sponsored DC plans following implementation of the rule.... 29% of respondents said they rolled over their retirement savings from an employer-sponsored account into an IRA because of advice from a financial professional. Another 29% consolidated their retirement savings into an existing IRA."
planadviser

Record-Low Interest Rates Continue to Drive the Pension Funded Status Deficit (PDF)
"Discount rates fell by one basis point in August while asset values remained unchanged, resulting in a funded status drop of $4 billion. The funded status deficit for the Milliman 100 plans settled at $456 billion at the end of August, having risen by $149 billion so far in 2016."
Milliman

[Opinion]

Joint Letter Submitted to Congress on Threats Posed by Proposed 'Composite' Multiemployer Pension Plans
"[T]he Pension Rights Center joined with retiree and labor organizations by sending a letter to the U.S. House of Representatives expressing extreme opposition to draft legislation that would create a new type of pension plan called a 'composite' multiemployer plan. This draft legislation would substantially weaken the funding status of currently-existing multiemployer plans, putting at risk the pensions of retirees participating in these plans. The Center strongly opposes any attempt ... to push through legislation in yet another year-end backroom deal."
Pension Rights Center

Benefits in General

Ninth Circuit Clarifies Remedies for Failure to Provide Documents Relevant to a Benefit Claim (PDF)
"[T]he Ninth Circuit clarified that the $110 per day penalty cannot be imposed for failure to provide documents relevant to a benefit claim in response to a request made under the claims regulations. While that penalty may be imposed for failure to provide required plan governing documents under ERISA Section 104(b)(4), it may not be imposed for the failure to provide documents relevant to a benefit claim." [Lee v. ING Groep, N.V., No. 14-15848 (9th Cir. July 25, 2016)]
Trucker Huss

Financial Wellness: The Newest Benefit Employers are Offering
"According to [one report], only 24% of millennials say that they are in control of their finances and 70% say that they need help understanding how benefits work. [Another] survey found that 85% of millennials don't feel financially secure, but expect to in the future.... [C]ompanies are now creating financial wellness programs to cater to employees' financial needs, instead of just having random one off sessions on budgeting 101."
Fox Business

Press Releases

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David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2016 BenefitsLink.com, 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 BenefitsLink.com, 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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