Retirement Plans Newsletter

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Webcasts and Conferences

Health Reform: Beyond the Basics -- Premium Tax Credits
Center on Budget and Policy Priorities

DOL Update: Into Thin Air -- Handling Regulatory and Logistical Issues When Participants Fail to Update Their Records
October 5, 2016 WEBCAST
Practising Law Institute

Creating a Culture of Wellness
October 13, 2016 WEBCAST
Wellness Workdays

Wearables: Employer Tool or Employee Perk?
October 19, 2016 WEBCAST
Willis Towers Watson

Transfers and Rollovers
November 22, 2016 WEBCAST

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[Official Guidance]

Text of PBGC Disaster Relief in Response to Hurricane Hermine in Florida
"The relief generally extends from August 31, 2016 through January 17, 2017. The disaster area consists of Citrus, Dixie, Hernando, Hillsborough, Leon, Levy, Pasco and Pinellas counties."
Pension Benefit Guaranty Corporation [PBGC]


P&I DC West Conference | San Diego | Oct 23-25

Sponsored by Pensions & Investments

Join leading executives who manage 401(k), 403(b), 457 and TSP plans at DC West. You'll learn how other plan sponsors analyze, develop, implement and measure programs for their participants, so you can improve your own plan.

[Official Guidance]

IRS Explanation, Worksheet (Alert Guidelines), and Deficiency Checksheet: Section 401(k) Requirements (PDF)
33 pages; revised April 2016. This single PDF document includes Publication 7335, Form 9002, and Form 9417. Excerpt: "The purpose of Worksheet Number 12 (Form 9002) and this explanation is to identify major problems that relate to plans that include a cash or deferred arrangement." [Cycle A Submission Period, 2/1/2016 through 1/31/2017]
Internal Revenue Service [IRS]

[Official Guidance]

IRS Explanation, Worksheet (Alert Guidelines), and Deficiency Checksheet: Employee and Matching Contributions (PDF)
21 pages; revised April 2016. This single PDF document includes Publication 7334, Form 8799, and Form 9416. Excerpt: "The purpose of Worksheet Number 11 (Form 8799) and this explanation is to identify major problems that relate to plans providing for employee and/or matching contributions (a '401(m) plan')." [Cycle A Submission Period, 2/1/2016 through 1/31/2017]
Internal Revenue Service [IRS]

[Guidance Overview]

PBGC Issues Proposed Regulation Expanding Missing Participants Program (PDF)
"In addition to vastly expanding the program in terms of the types of plans that are covered, PBGC's proposal clarifies the steps a plan administrator must take to conduct a 'diligent search,' which is generally a prerequisite to participation in the Missing Participants Program, and the rules regarding benefits transferred to and paid by PBGC."
Groom Law Group

401(k) Plan Fees Fall to All-Time Low
"The average asset-weighted expense ratio for providing record-keeping services to defined contribution plans is currently 0.42 percent, versus the 2006 level of 0.57 percent. Contracts for their record-keeping fees have been modified by 82 percent of plans since 2013, which has led 51 percent of plans to adopt a fixed-fee record-keeping arrangement[.]"
Society for Human Resource Management [SHRM]


Celebrate ASPPA's Golden Anniversary!

Sponsored by ASPPA

This October the nation's retirement industry elite will converge in our nation's capital to celebrate ASPPA's Golden Anniversary with insights from industry insiders, regulators, pundits and the nation's leading voices. Join us.

Trusts No More: Rethinking the Regulation of Retirement Savings in the United States
"This Article identifies the flaws in the analogy and analyzes the shortcomings of a regulatory framework that, despite dramatic changes in the nature of modern pension benefits, still regards employees as gift recipients, grants both settlor and trustee rights to employers, and increasingly relies on trust-based fiduciary obligations to prevent employers from prioritizing the interests of their non-employee stakeholders over the interests of pension plan participants."
Natalya Shnitser, in BYU Law Review, via SSRN

The Benefits of Enacting a Plan Sponsor Philosophy (PDF)
"Unlike a Committee Charter, which sets the lines of authority, or an Investment Policy Statement, which outlines acceptable actions, a philosophy defines a retirement plan's purpose, making it a useful reference tool for committees during the decision-making process.... Developing a philosophy starts with examining a company's corporate culture."
Portfolio Evaluations, Inc.

More DC Plans Embrace Open Architecture
"More defined contribution plans are moving to an open-architecture investment lineup strategy, seeking greater flexibility and less reliance on proprietary products offered by their record keepers.... This phenomenon goes by many names -- open vs. closed architecture, bundled vs. unbundled plans or proprietary vs. non-proprietary products. But the theme is the same: reducing exposure to a single or dominant source of investment options."
Pensions & Investments

Attrition Fears Play Into Broker-Dealers' Hesitation to Detail New Commission Schedules Under DOL Fiduciary Rule
"Broker-dealers are either still determining the annuity commissions that would likely satisfy the rule's "reasonable compensation" requirements, or they've made that determination but have taken a vow of silence.... Insurance companies have a bird's-eye view of what brokerages are considering by way of reasonable compensation. Many broker-dealers, especially larger firms, are requesting customized commission schedules from insurers that fit within their compensation framework."

DOL Rule Could Reduce IRA Rollovers
"Nearly half of projected [IRA] rollover assets are 'at-risk' of remaining in the defined contribution plan-sponsor market once the [DOL's] fiduciary rule goes into effect, a new report claims. Assets that don't roll over into retail IRA accounts, a transaction considered a big cross-selling opportunity for retirement advisors, would cut into revenues generated by financial advisors since fewer dollars are 'in motion.' +"

Teachers Pensions and Retirement across Recent Cohorts of College Graduate Women
"Labor force participation rates of college-educated women ages 60 to 64 increased by 20 percent (10 percentage points) between 2000 and 2010. One potential explanation for this change stems from the fact that fewer college-educated women in the more recent cohorts were ever teachers. This occupational shift could affect the length of women's careers because teaching is a profession where workers are covered by defined benefit pensions and, generally, defined benefit pensions allow workers to retire earlier than Social Security."
National Bureau of Economic Research [NBER]

Quarterly Survey of Public Pensions: Second Quarter 2016
"This report provides national summary data on the revenues, expenditures and composition of assets of the largest defined benefit public employee pension systems for state and local governments. This report produces three tables: Tables 1 and 3 include data on cash and security holdings and Table 2 provides data on earnings on investments, contributions and payments."
U.S. Census Bureau

September 2016 Pension Finance Update
"Pensions enjoyed modest improvement in funded status last month, but remain underwater during 2016 through three quarters. Both model pension plans we track1 improved by less than 1% in September. For the year, Plan A is down 5% and the more conservative Plan B is down less than 1%[.]"
October Three Consulting

Executive Compensation and Nonqualified Plans

Executive Pay Clawbacks Are Gratifying, but Not Particularly Effective
"If the goal is to keep corporate executives honest, compensation clawbacks aren't doing the job. That's what the recent action by Wells Fargo's board shows. Yes, the bank's directors acted on Tuesday to recover $60 million in stock grants from two top executives in the wake of the phony-account-opening scandal. But the move came almost three years after the improprieties came to light -- and should serve as Exhibit A for the shortcomings in these pay recovery programs."
The New York Times; subscription may be required

Evolving Best Practices in Director Compensation
"[P]laintiffs' lawyers have found litigation over directors' compensation to be much more profitable than litigation over executives' pay (because the board's decisions over executive pay are protected by the business judgment rule, which may not be available to 'interested' directors setting their own pay).... Among the evolving best practices [are]: Independent Review. I ... Benchmarking.... Charter Language.... Disclosure."
Winston & Strawn LLP

Press Releases

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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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