Retirement Plans Newsletter

October 12, 2016

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Webcasts and Conferences

Special Topic: Look Back Measurement Method
October 13, 2016 WEBCAST
Accord Systems, LLC

Maximize Your Benefit: Magellan Health Presents Emerging Advancements in Employee Assistance Programs
October 19, 2016 in MO
Worldwide Employee Benefits Network [WEB] - St. Louis Chapter

FMLA Abuse Got You Down? Best Practices for Using FMLA Medical Certification as a Tool to Deter FMLA Misuse
November 15, 2016 WEBCAST
Franczek Radelet PC

Responsibilities of an Internal ESOP Fiduciary
December 6, 2016 WEBCAST
National Center for Employee Ownership [NCEO]

Detangling the FMLA from the ADA
January 17, 2017 WEBCAST
National Business Institute

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[Official Guidance]

Text of Proposed PTEs for Asset Managers Affiliated with Royal Bank of Canada Trust Company (Bahamas) or Northern Trust Fiduciary Services (Guernsey); Proposed Extension of PTE for Asset Managers Affiliated with Deutsche Bank AG
122 pages. This set of Exemptions [1] provides relief for entities with specified relationships to Royal Bank of Canada Trust Company (Bahamas) Limited [RBC-Bahamas], notwithstanding a judgment of conviction against RBC-Bahamas for aiding and abetting tax fraud, to be entered in France in the District Court of Paris; [2] provides relief for entities with specified relationships to Northern Trust Fiduciary Services (Guernsey) ltd [Northern Trust-Guernsey] notwithstanding a judgment of conviction against Northern Trust-Guernsey to be entered in France in the District Court of Paris, for aiding and abetting tax fraud; and [3] extends relief until the earlier of April 23, 2017 or the date of final DOL action, for certain asset managers with specified relationships to Deutsche Bank, notwithstanding a judgment of conviction against Deutsche Securities Korea Co. entered on January 25, 2016.
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

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[Guidance Overview]

Interesting Angles on the DOL's Fiduciary Rule, Part 23
"Since virtually all investment and insurance advice to IRAs and plans... will become fiduciary advice on April 10, 2017, two steps should be taken.... [1] if they don't already exist, processes need to be put in place so that any advice satisfies the prudent person requirement.... [2] all payments for the advice (including indirect and non-cash compensation, whether to the adviser, the supervisory entity or any affiliates or related parties) need to be examined.... [T]he compensation arrangements will need to satisfy the prohibited transaction rules ... Or, in the alternative, the condition of a prohibited transaction exemption must be satisfied. And, all of that needs to be done by April 10, 2017."
FredReish.com

DOL Brief Responds to Challenge to Fiduciary Rule
" 'ERISA's fiduciary definition nowhere refers to the common law or a relationship of trust and confidence,' the DOL reply stated. 'Congress expressly adopted ERISA's definition to displace the common law because it had proven ineffective.' ... 'The rulemaking does not decrease access to any class of product, but rather appropriately protects the interests of retirement investors by requiring all classes of products to meet objective standards,' DOL attorneys wrote. " [Chamber of Commerce of the United States of America, et al. v. Perez, No. 16-1476 (N.D. Tex., response to motion for summary judgment filed Oct. 7, 2016)]
InsuranceNewsNet.com

Many Americans May Be Investing Too Conservatively to Meet Their Retirement Goals
"Almost six in 10 (59%) focus more on avoiding loss than maximizing the growth of their investments for retirement. Interestingly, this does not vary much across ages: 59% of 30-somethings, 62% of 40-somethings, 58% of 50-somethings, and 52% of those 60+ agree with that approach."
Wells Fargo

Deutsche Bank May Get Extended Asset Manager Relief From DOL
"The [DOL] is considering extending the relief from prohibited transaction provisions because without it, retirement plans and individual retirement accounts with assets managed by qualified professional asset managers affiliated with Deutsche Securities Korea Co. would incur substantial costs by switching to a different manager ... The DOL is considering similar exemptions for asset managers of Royal Bank of Canada and Northern Trust Corp. A Paris court may convict the Royal Bank of Canada Trust Co. (Bahamas), a Royal Bank of Canada subsidiary, for allegedly aiding and abetting tax fraud."
Bloomberg BNA

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Watching SCOTUS: ERISA Church Plan Exemption Revisited
"Currently before the Supreme Court are two petitions regarding the thorny legal question of which organizations can qualify for ERISA's Church-plan exemption. If the Supreme Court grants certiorari and follows the recent Third and Seventh Circuit Court decisions, then all Church-affiliated organizations (e.g. church affiliated hospitals, daycares, and adoption agencies) will have to bring their existing plans into compliance with ERISA, likely at a substantial cost both to their bottom line and to their religious mandate."
Seyfarth Shaw LLP

Retirement Replaces Healthcare Benefits as a Way to Attract, Retain Employees
"29% of [small business owners (SMBs)] with less than 300 employees who offer 401(k) retirement plans and plan to increase contributions say that they are doing so because the ACA has made health benefits less attractive to employees. Additionally, 43% of SMBs who plan to increase contributions to their company's 401(k) plan say they are doing so because their plan is now more important for attracting and retaining employees as a result of the ACA. For business owners who don't currently offer retirement benefits but plan to start in the future, 23% say it is because a 401(k) plan is now more important for attracting and retaining employees as a result of the ACA."
Business & Legal Reports, Inc.

Pension Risk Transfer: Issues Relative to Affected Constituent Groups (PDF)
12 pages. "Longevity and investment risk are key considerations for employers in deciding whether to implement a risk transfer transaction and for participants if they receive a lump sum distribution. Increasing PBGC premiums make these transactions more attractive to employers, while the resulting loss of PBGC insurance coverage can be concerning for plan participants. Plan participants should receive sufficiently complete and appropriate disclosures to help them make an informed decision. Changes in plan funding levels following a risk transfer transaction can also affect the benefit security of participants remaining in the plan post-transaction."
American Academy of Actuaries

PBGC, Alcoa Agree on Extra Pension Fund Contributions
"The agreement, which calls for three $50 million payments over 30 months, was a result of the PBGC's Early Warning Program, which monitors large pension plans and corporate transactions that could jeopardize pension funds."
Pensions & Investments

Public Pension Cost-of-Living Adjustments Among the 50 States (PDF)
15 pages. "Public pension COLAs have received increased attention as many states look to make adjustments to the cost of benefits amid challenging fiscal conditions and the current low-inflationary environment. This brief presents a discussion about the purpose of COLAs, the different types of COLAs provided by government pension plans, and an overview of recent state changes to COLA provisions."
National Association of State Retirement Administrators [NASRA]

Benefits in General

[Official Guidance]

Text of IRS Disaster Relief Notice IR-2016-131: Tax Relief for Victims of Hurricane Matthew (PDF)
"North Carolina storm victims will have until March 15, 2017, to file certain individual and business tax returns and make certain tax payments, with similar relief expected soon for Hurricane Matthew victims in other states ... [A]ffected taxpayers in Beaufort, Bladen, Columbus, Cumberland, Edgecombe, Hoke, Lenoir, Nash, Pitt and Robeson counties will receive this and other special tax relief. Locations in other states are expected to be added in coming days, based on damage assessments by FEMA. The tax relief postpones various tax filing and payment deadlines that occurred starting on Oct. 4, 2016. As a result, affected individuals and businesses will have until March 15, 2017, to file returns and pay any taxes that were originally due during this period."
Internal Revenue Service [IRS]

At Open Enrollment, Millennials Value Financial Security and Workplace Flexibility
"When asked how they would spend money if their employer provided them with an allowance to select among a variety of benefits, Millennials said they would allocate more than half the amount to health care and retirement plan benefits (27 percent each).... 6 in 10 Millennials (59 percent) are willing to pay a higher amount for a guaranteed retirement benefit, such as a guaranteed income stream. That figure is up from 42 percent in 2009."
Society for Human Resource Management [SHRM]

When Can an Employee Take Leave to Vote?
"The majority of states give employees the right to take time off from work to vote or to serve as an election worker. Many states also require that an employer offer paid leave for the time needed to vote. Moreover, some states require that an employer allow an employee to take the entire day off if the employee intends to volunteer to help administer the election."
Littler

New SEC Settlements Show Continued Focus on Whistleblower Protection and Severance Agreements
"The latest in a recent string of settled orders, which include the SEC's first case based solely on retaliation for whistleblower reporting, further highlight the agency's resolve to prevent corporate actions that could chill reporting of possible legal violations. These cases, along with other recent settlements, send a message to companies about the importance of enhancing anti-retaliation controls and ensuring that employee severance agreements and company policies are consistent with the SEC's whistleblower rules."
Wilmer Hale

Executive Compensation and Nonqualified Plans

[Guidance Overview]

Code Section 409A and You: IRS Issues New Guidance
"The Proposed Regulations include new and clarifying provisions that will affect how employers design and operate their nonqualified deferred compensation plans. Primarily, these changes clarify rules relating to [1] income inclusion, [2] exemptions from Section 409A, and [3] opportunities for acceleration and deferral of payments. [This article] summarizes the more practical changes that affect how employers operate their deferred compensation plans."
Ogletree Deakins

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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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