[Guidance Overview]
PBGC Issues Final Rule for Premium Penalty Relief
"This penalty relief is good news for plans and plan sponsors. With the increase in PBGC premiums over the past few years, the potential penalties could be substantial. The reduced penalty should still encourage compliance with timely payment of premiums but lessen the absolute impact of mistakes. This relief does not change the requirement to pay interest on late premium payments."
Cheiron
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[Guidance Overview]
DOL Finalizes Safe Harbor Rule on State-Sponsored IRAs
"While industry trade groups and others appear to generally applaud and support the fact that the final rule expands access to workplace retirement savings programs, some continue to be concerned about the fact that it creates favorable standards for payroll deduction IRA programs administered by a state, over those administered by private sector providers outside a state program. This appears particularly illogical to some because it fails to take advantage of the private sector's substantial experience in administering and distributing IRA products, and infrastructure it already has in place to meet both the state's and the DOL's goal of encouraging wide-spread and greater savings for retirement."
Trucker Huss
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Building a Common Language to Promote Adoption of Auto Features in DC Plans (PDF)
"[DCIIA] has identified several common barriers that inhibit a meaningful dialogue about the robust adoption of auto features. One such barrier is a lack of common definitions for varying auto features.... [DCIIA intends] to promote these definitions as a guidepost for discussions with plan sponsors, regulators, policy makers and influencers, and within the retirement industry itself. The definitions ... represent a common framework for discussing auto features, with the ultimate goal of increasing plan sponsor adoption of intelligent plan design features that improve participant retirement outcomes[.]"
Defined Contribution Institutional Investment Association [DCIIA]
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Senate Finance Committee Approves Bipartisan Pension Bills (PDF)
"[The Retirement Enhancement and Savings Act of 2016 (RESA) would].... [1] permit unrelated employers ... to pool their resources by participating in a new type of multiple employer plan, provided certain conditions are met.... [2] require employers to provide defined contribution plan participants with an estimate of the amount of monthly annuity income the participant's balance could produce in retirement ... . [3] create a new fiduciary safe harbor for employers who opt to include a lifetime income investment option in their defined contribution plan.... [4] allow earnings on elective deferrals, qualified non-elective contributions and qualified matching contributions under a 401(k) plan to be distributed on account of hardship.... [5] increase the penalties for failing to file a Form 5500 and failing to provide a required withholding notice to $100 per
day[.]"
Groom Law Group
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Sanofi Avoids ERISA Challenge to Stock Losses in Its 401(k) Plan
"[T]he court noted Forte didn't allege that he purchased stock at the artificially inflated price or that he sold it at a loss. Instead, Forte alleged that he was injured when he was deprived of the opportunity to transfer his investment in the stock to a more prudent investment. A plaintiff must identify more than merely a stock price drop throughout the proposed class period to articulate an injury for the purpose of establishing standing, the court said." [Forte v. U.S. Pension Committee, No. 15-4936 (S.D.N.Y. Sept. 30, 2016)]
Bloomberg BNA
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How Your 401(k) Participants Can Use Active Management
"Many 401k plan investors are not satisfied with market average returns. Nor do they feel it makes sense to lock-in 100% of every market decline. Many 401k plan participants believe they can consistently outperform market averages by applying a little of the right knowledge.... Consider the following to make active management work in your 401k plan account: ... Eliminate closet indexers ... Index efficient asset classes ... Active management for inefficient asset classes ... Defense is good ... Full market cycle ... Use active management to allocate."
Lawton Retirement Plan Consultants
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Aggregate Funded Ratio of U.S. Corporate Pension Plans Increased Nearly One Percent in September (PDF)
"The aggregate funded ratio for U.S. corporate pension plans increased by 0.9 percentage points to end the month of September at 76.9 percent, narrowing its year-to-date decline to 4.5 percentage points ... The monthly change in funding resulted from a 1.6% drop in liability values that outpaced a 0.3% decrease in asset values. This narrowed the year-to-date decline in funding ratios, which is the result of a 12% increase in liability values."
Wilshire Associates
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Detroit Retirees' Effort to Restore Pension Fails
"A federal appeals court on Monday rejected a challenge to cuts in Detroit pensions, saying a plan that helped bring the city out of the largest municipal bankruptcy in U.S. history must not be disturbed.... Some retirees sued, saying they deserve the pension that was promised before Detroit filed for bankruptcy in 2013. Thousands saw their pension cut by 4.5%; annual cost-of-living increases were eliminated."
Detroit Free Press
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Benefits in General
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ERISA Advisory Council to Meet November 9-10
"The purpose of the open meeting on November 9 and the morning of November 10 is for the Advisory Council members to finalize the recommendations they will present to the Secretary. At the November 10 afternoon session, the Council members will receive an update from the Assistant Secretary of Labor for [EBSA] and present their recommendations. The Council recommendations will be on the following issues: [1] Participant Plan Transfers and Account Consolidation for the Advancement of Lifetime Plan Participation and [2] Cybersecurity Considerations for Benefit Plans[.]"
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]
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An Overview of the Pension/OPEB Landscape
"This paper provides a comprehensive accounting of pension and OPEB liabilities for state and local governments and the fiscal burden that they pose. The analysis includes plans serving more than 800 entities: 50 states, 178 counties, 173 major cities, and 415 school districts related to the sample of cities and counties.... The cost analysis calculates, separately, pension and OPEB costs as a percentage of own-source revenue for states, cities, and counties. It then combines pension and OPEB costs to obtain the overall burden of these programs." [Data figures (XLS) also available.]
Center for Retirement Research at Boston College
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Executive Compensation and Nonqualified Plans
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ISS Policy Updates
"[T]he ISS policy survey reports that both investors and issuers strongly favor using metrics other than total shareholder return (TSR) to measure pay-for-performance alignment.... [T]he survey reports that institutional investors strongly support annual say-on-pay frequency."
Winston & Strawn LLP
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Press Releases
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