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[Official Guidance]
Text of PBGC Disaster Relief Announcement 16-12 in Response to Hurricane Matthew in North Carolina
"This Disaster Relief Announcement provides relief relating to PBGC deadlines ... The relief generally extends from October 4, 2016 through March 15, 2017. The disaster area consists of Beaufort, Bladen, Columbus, Cumberland, Edgecombe, Hoke, Lenoir, Nash, Pitt, and Robeson Counties. If IRS adds additional areas in connection with those filing extensions, any person responsible for meeting a PBGC deadline that is located in those additional areas will also be a Designated Person."
Pension Benefit Guaranty Corporation [PBGC]
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[Advert.]
SPARK Forum - November 6-8, 2016 -- The Breakers, Palm Beach, FL
Join us at the retirement services industry's leading event for top marketing, sales, administration and record keeping professionals. Comprehensive agenda to meet the needs of 401(k) Plan Providers, Financial Advisors and Third Party Administrators.
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[Official Guidance]
Text of PBGC Interest Rate Update for November 2016
"The November 2016 interest assumptions under the benefit payments regulation will be 0.50 percent for the period during which a benefit is in pay status and 4.00 percent during any years preceding the benefit's placement in pay status. In comparison with the interest assumptions in effect for October 2016, these interest assumptions are unchanged."
Pension Benefit Guaranty Corporation [PBGC]
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[Guidance Overview]
IRS Issues Final Rules for Partial Annuity Distributions from DB Plans (PDF)
"The final rules provide guidance under which a participant's accrued benefit can be split, or bifurcated, so that the minimum present value requirements apply only to the portion of the participant's accrued benefit that is paid in an accelerated form. The final rules provide two approaches to bifurcating the accrued benefit."
Prudential
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[Guidance Overview]
New York City to Establish City-Wide Private Sector Retirement Program
"The proposed program [includes] ... [1] A voluntary 401(k) marketplace, making available to private sector employers 'screened, competing 401(k) and other retirement plans from private and public providers.' ... [2] Private sector employer participation in a 401(k) MEP coordinated by the City of New York, including employers having no common ownership or business purpose.... [3] The New York City Roth IRA would be available as an alternative to [these] options, and employers (the news release says 'all') not offering a retirement plan would automatically enroll employees in a payroll deduction Roth IRA savings program."
Ascensus
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Neuberger Berman Fights Back Against 401(k) Lawsuit
"Attorneys for the plaintiff, Arthur Bekker, claim Neuberger breached its duty as a fiduciary ... by offering employees a fund that was managed in-house when an externally managed index fund tracking the Standard & Poor's 500 index would have generated better returns ... with lower fees.... 'Bekker has not even established that [the Value Equity Fund's (VEF's)] fees were excessive, or its performance poor, because he improperly compares VEF to a passive index fund with a completely different objective and investment style,' states the [Neuberger] brief. The lawyers claim that Bekker's investment in VEF actually outperformed the S&P 500 index."
Institutional Investor
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Prestigious Colleges Defend Retirement Plan Management
"The 12 colleges targeted by these lawsuits manage more than $46 billion in combined retirement plan assets for the benefit of more than 380,000 employees and former employees.... The standard imposed by ERISA is what 'like' fiduciaries would do or decide under like circumstances,' [Emory University] wrote in its motion to dismiss. 'By claiming that twelve leading universities in the country all acted imprudently when making similar decisions, Plaintiffs expose the implausibility of their claims.' "
Bloomberg BNA
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Legacy Investments in Higher Education: What is a Plan Sponsor's Responsibility to Participants?
"Even though institutions may not have authority to move the legacy assets to a newly offered line-up of more prudently evaluated investments, they do have responsibility to communicate the value of these options to the participants who hold these legacy assets.... Limitations implied or imposed by legacy providers with 'individual' contracts do not eliminate the need for prudent oversight or communication from plan sponsors regarding these investments, and their alternatives in a way that is in the best interest of participants."
Fiduciary Plan Governance, LLC
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Breaking Down the DOL Regulatory Package: Taking on a Fiduciary Position for the First Time?
"[E]xpectations will be higher once the DOL regulatory package is implemented in April 2017.... [M]any broker-dealers and registered investment advisors (RIAs) are creating guidelines to help you meet these lofty expectations.... Start by documenting your interactions and engagement with your clients.... If you move to a fiduciary role, it will be vitally important to document meetings, conversations, evaluation processes and decisions."
The Principal Blog
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Target Date Fund Glide Path Evaluation: What Really Matters?
"Participant outcomes become increasingly driven by investment returns and less so by contributions as they age and retirement balances grow.... Differentiation among TDF providers' glide paths increases as the target date nears.... The competing needs of capital growth and capital preservation near retirement create a difficult risk tradeoff decision.... Since retirement outcomes are inherently market driven, evaluate the efficacy of dynamic glide path designs in helping all participants within a diverse workforce achieve a reasonable outcome."
Manning & Napier
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The Lake Wobegon Effect and Indexing in Target-Date Funds
"[T]he argument for low-cost index fund investing is even more compelling for plan sponsors that use target-date funds as their qualified default investment alternative and automatically enroll participants in them. These participants are by definition unengaged in the investment selection process, and plan sponsors should carefully consider investment risks that, on average, have raised costs and lowered returns."
Vanguard
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Updated Estimate of Financial Effect on Social Security of the Bipartisan Policy Committee Reform Plan (PDF)
26 pages. "Assuming enactment of the plan, the combined OASI and DI Trust Funds would be fully solvent throughout the 75-year projection period, under the intermediate assumptions of the 2016 Trustees Report.... Enactment of the twelve provisions of the Commission's plan would change the long-range OASDI actuarial deficit from 2.66 percent of taxable payroll under current law to a positive actuarial balance of 0.11 percent of payroll under the plan."
U.S. Social Security Administration [SSA]
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Corporate Pension Funded Status Improved in September (PDF)
"The funded status of the 100 largest corporate defined benefit pension plans improved by $19 billion during September ... The deficit fell to $437 billion due to interest rate gains during September. As of September 30, the funded ratio increased to 76.3%, up from 75.6% at the end of August."
Milliman
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Union Appeal Focuses Attention on Public Employee Pension Precedent
"A decision by four Marin County public-employee associations to appeal a pension-related case to the California Supreme Court could ultimately determine whether localities have the tools needed to rein in escalating pension debt. At issue is how far officials can go to reduce some benefits for current employees after a state appeals court has chipped away at a legal 'rule' long favored by the state's unions."
Cal Watchdog
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[Opinion]
The MPRA: One Size Fits No One
"In the two years since the passage of the [Kline-Miller Multiemployer Pension Reform Act of 2014 (MPRA)], nothing has happened except expenditures of a great deal of money by multi-employer funds to obtain the relief from the Treasury and a hue and cry from [senators] who now regret having voted in favor of legislation that has caused such human suffering. They then penned a common letter to the Treasury Department demanding that the lengthy and costly application by the Central States and Southeast Pension Fund be denied. Central States' application was subsequently denied."
Jackson Lewis P.C.
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[Opinion]
Looking in the Wrong Places for Social Security Reform
"[At] some points in the program's history, a significant portion of workers had earnings above the tax cap, but this was in the earlier years of its operation when more than a quarter of workers were above it. Over the past 30 years this share of workers has fluctuated in a narrow band around 6 percent. Looking at it another way, the percentage of total earnings that are subject to the tax was 82.7 percent in 2014. While this is slightly below the high point in the early 1980s, it is just below the average since 1950."
Cato Institute
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Benefits in General
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How a One-Person Benefits Team Becomes an Army
"By working with a support center, you can bring the human touch back to benefits and further the power of your technology. And it's an opportunity for your tech vendor to reinforce their commitment to your company's success and your opportunity to show your commitment to your employees' success. In practical terms, a support center acts as an extension of your benefits team, providing assistance with benefit questions, enrollment and certain areas of administration."
Benefitfocus
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Press Releases
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BenefitsLink.com, Inc.
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Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager
BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2016 BenefitsLink.com, Inc. All materials
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