Retirement Plans Newsletter

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Employee Benefits Jobs

Webcasts and Conferences

Privacy and Security for Benefit Plans: To HIPAA, and Beyond!
October 5, 2016 WEBCAST
Ogletree Deakins

Compensation & Benefits - Qualified Retirement Plan Fiduciary Issues
October 12, 2016 WEBCAST
Winstead PC

How to Guide Clients on Optimizing their Social Security Benefits
October 18, 2016 WEBCAST

Retirement Advisor Symposium
October 19, 2016 in IL

New York's New Parental Leave Law: What You Need to Know
October 26, 2016 WEBCAST
Lorman Education Services

Lessons Learned from Recent ERISA Litigation Cases
November 3, 2016 in TX
ASPPA Benefits Council [ABC] of Dallas/Fort Worth

401(k) Beyond the Basics 12: Safe Harbor 401(k) Plan Operation
November 7, 2016 WEBCAST
FIS Relius Education

Dealing with Rehired Employees [2016]
November 8, 2016 WEBCAST
FIS Relius Education

IRA Distributions
November 15, 2016 WEBCAST

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[Official Guidance]

IRS Explanation, Worksheet (Alert Guidelines), and Deficiency Checksheet: Top-Heavy Requirements (PDF)
10 pages; revised April 2016. This single PDF document contains three items: Publication 7002, Form 8385, and Form 8397. Excerpt: "Worksheet Number 7 (Form 8385) and this explanation are designed to aid the specialist in determining whether a plan is top-heavy as defined in Internal Revenue Code section 416 and, if so, whether the plan meets the special top-heavy requirements of that section." [Cycle A Submission Period, 2/1/2016 through 1/31/2017]
Internal Revenue Service [IRS]


Richard Hochman, J.D. Joins ASC

Sponsored by ASC

ASC is pleased to announce that industry leader, expert, & former head of McKay Hochman Co., Inc., Richard Hochman, J.D. will be joining the ASC team as Director of Retirement Plan Consulting Services! Learn more – read on.

[Official Guidance]

IRS Explanation, Worksheet (Alert Guidelines), and Deficiency Checksheet: Limitations on Contributions and Benefits (PDF)
18 pages; revised April 2016. This single PDF document contains three items: Publication 7001, Form 6044, and Form 8384. Excerpt: "The purpose of Form 8384, Worksheet Number 6, is to assist in determining if a plan meets the major requirements of section 415. However, there may be section 415 issues not mentioned in the worksheet that could affect the plan's qualification." [Cycle A Submission Period, 2/1/2016 through 1/31/2017]
Internal Revenue Service [IRS]

[Guidance Overview]

Filing an S-8 Might Be Required Even If Your Plan Does Not Offer a Company Stock Fund
"Companies that offer a company stock fund know that they need to register shares on a Form S-8 filed with the SEC. But what about companies that do not offer a company stock fund investment option under their 401(k) Plan? ... [T]he SEC published a new C&DI, Question 139.33, confirming its position ... that a company that does not offer a company stock fund investment option under its 401(k) Plan still may be required to file a Form S-8 if it makes available a brokerage window feature through which participants could invest their own contributions in company stock."
Winston & Strawn LLP

Text of Fifth Circuit Opinion Reversing District Court's Dismissal of BP Stock Drop Claim (PDF)
"[T]he district court here erred when it altered the language of Fifth Third to reach its holding. In Fifth Third, the Supreme Court stated that the plaintiff's proposed alternative must be one that 'a prudent fiduciary in the same circumstances would not have viewed as more likely to harm the fund than to help it.' ... But here the district court stated that it could not determine, 'on the basis of the pleadings alone, that no prudent fiduciary would have concluded that [the alternatives] would do more good than harm' ... These statements are not equivalent. Under the Supreme Court's formulation, the plaintiff bears the significant burden of proposing an alternative course of action so clearly beneficial that a prudent fiduciary could not conclude that it would be more likely to harm the fund than to help it. Here, the stockholders have failed to do so." [Whitley v. BP, No. 15-20282 (5th Cir. Sept. 26, 2016)]
U.S. Court of Appeals for the Fifth Circuit

The Value of Fiduciary Protection: What Plan Sponsors Need to Know (PDF)
8 pages. "[F]actors in choosing a fiduciary that plan sponsors will want to examine closely: [1] The specific services that are -- and are not -- covered under the agreement. [2] The financial strength of the company backing the fiduciary services. [3] The expertise or qualifications of the fiduciary in relation to the services provided. [4] How the fiduciary services fit in with the overall goals of the plan."


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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.

401(k) Fee Litigation Update, September 2016
"Nearly forty lawsuits have been commenced relating to 401(k) plan fees.... In addition to the lawsuits against the plan sponsors, lawsuits have been brought against 401(k) plan service providers."
Groom Law Group

University 403(b) Plan Fee Litigation Update, September 2016
"The allegations in these actions are similar to those made in the dozens of excessive fee cases involving 401(k) plans filed in the last decade.... The new cases will test the essential structure of such plans and determine whether fiduciary standards developing in the 401(k) matters should be applied in the 403(b) context."
Groom Law Group

Broker-Dealers Say Some Advisors Will Retire as a Result of the DOL Fiduciary Rule
"54 percent of Broker-Dealers (B-Ds) surveyed believe some of their advisors will retire rather than sell under the new business rules to comply with the [DOL's] fiduciary rule.... [M]ost B-D firms (8 in 10) plan to employ both the PT 84-24 or BIC exemptions allowed under the new rule, while nearly three quarters will use fee leveling/fee offset. Firms said they will employ multiple strategies in order to ensure compliance."

Will the DOL Fiduciary Rule Be the End of Solicitor Arrangements?
"IRA assets held by a Broker-Dealer (B-D) range between 40 and 80% of B-D total assets. However, many of these [financial advisors] know very little about ERISA fiduciary standard of conduct. This lack of knowledge increases B-D litigation risk as tens of thousands of misguided fiduciary missiles seek to secure new engagements or service existing clients. B-Ds will have to establish new training protocols in conjunction with compliance oversight to mitigate this risk."
Fiduciary Matters Blog

Reality Sets In: How New Fiduciary Rule Impacts 401(k)/IRA Providers and Retirement Savers
"For many, especially those already leading with the fiduciary mantle, the new Rule also offers new opportunities. This could add considerable value to retirement savers impacted by the Rule. For all the disquiet associated with changed providers, they may end up in a far better situation than when they started, according to those practitioners who responded to our interview queries."
Fiduciary News

Retirement Assets Total $24.5 Trillion in Second Quarter 2016
"Retirement assets accounted for 34 percent of all household financial assets in the United States at the end of the second quarter of 2016.... Assets in individual retirement accounts (IRAs) totaled $7.5 trillion at the end of the second quarter of 2016, an increase of 1.7 percent from the end of the first quarter. Defined contribution (DC) plan assets rose 2.1 percent in the second quarter of 2016 to $7.0 trillion."
Investment Company Institute [ICI]


Denial is Not an Option: Why Savvy Investment Advisors will Accept Fiduciary Status
"[T]here isn't another set of regulations issued in recent memory that was subject to so many hearings and got so many public comments.... [T]he [DOL] clearly has authority to interpret Section 3(21) of ERISA in the same way that the [IRS] issues regulations and rulings interpreting sections of the Internal Revenue Code.... [T]here are many advisers who are already subject to the fiduciary standard, and they are doing just fine.... [In] some ways, the genie is already out of the bottle."
Cohen & Buckmann pc

Benefits in General

How to Calculate the Value of Your Benefits
"It's 'open enrollment' season ... [and] a good time ... to estimate how much the benefits you choose are worth to you: Health Insurance (typically $5,000 -- $30,000) ... Retirement Plan (typically 3-6 percent of your salary in matching contributions) ... Stock Purchase Plan (typically 10 to 15 percent of market value per share purchased) ... Disability Insurance ($2,000 to $5,000 per year) ... Life Insurance ($250 to $500 per year) ... Employer Contribution to FICA (7.65 percent of salary) ... Unemployment Insurance (0.3-1.5 percent of salary) ... Your company may offer other benefits such as tuition reimbursement, pre-paid legal assistance, commuter benefits, health and wellness programs, access to group long term care insurance[.]"
Financial Finesse

Executive Compensation and Nonqualified Plans

Using Phantom Stock in a Family-Owned Business
"A phantom stock plan is one way for family-owned businesses to provide long-term incentive compensation to key employees without actually issuing stock. Phantom stock is a way to give key employees the economic benefit of owning stock without requiring family members to give up any equity in the business."
Bradley Arant Boult Cummings LLP

Press Releases

DOL Reaches Settlement with Sierra Pacific Industries’ Health Benefits Plan
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

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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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