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[Official Guidance]

Text of PBGC Disaster Relief Notice 2016-13 in Response to Hurricane Matthew in South 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 Marion and Orangeburg Counties."
Pension Benefit Guaranty Corporation [PBGC]

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[Guidance Overview]

Required 2016 Tax-Qualified Amendments and Cycle A Determination Letter Filings (PDF)
"[In this article, the authors] summarize amendments that may be needed for all plans in 2016 (both defined benefit and defined contribution plans), review the document considerations for plans that are scheduled to apply for an IRS determination letter under Cycle A, and provide action steps for all plan sponsors."
Groom Law Group

[Guidance Overview]

Social Security Benefits and Taxable Wage Base to Increase for 2017
"The average of total wages for 2015 (the most recent year) is $48,098.63.... For 2017, the primary Social Security monthly benefit formula will be 90% of the first $885 of [Average Indexed Monthly Earnings], plus 32% of the next $4,451, plus 15% of any excess over $5,336. For recipients under Social Security normal retirement age (SSNRA) in 2017, the annual exempt amount is $16,920. For recipients who reach SSNRA in 2017, the annual exempt amount, which applies only to earnings in months prior to the month the recipient attains SSNRA, is $44,880."
Xerox HR Services

[Guidance Overview]

California Employers with Qualified Plans Not Subject to New Secure Choice Program
"[It] is likely the program in fact will not commence operation for some time, perhaps for another two to four years (i.e., not until 2019 to 2021), due to the significant administrative systems that need to be established to get the program up and running.... Of particular importance is selecting a private, third party record keeper to establish systems to deal with the hundreds of thousands of private employers and the millions of employees who will be subject to the Secure Choice program.... [T]he Secure Choice mandate will not apply to any private employer that maintains a tax-qualified retirement plan, even with respect to employees not covered by the employer's plan."

How to Choose a 401(k) Plan Auditor
"Ian Dingwall, Chief Accountant of [EBSA], has noted four characteristics of 'deficient auditors': [1] inadequate technical training and knowledge; [2] lack of awareness of the unique nature of auditing employee benefit plans; [3] lack of quality control on audit processes; and [4] a failure to understand the requirements for limited-scope audits."


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Deutsche Bank ERISA Self-Dealing Challenge Proceeds
"Concerning the three-year statute of limitation ... the judge noted that the plaintiffs could not have known about poor performance or excessive fees unless they had something to compare it to ... [The judge also] rejected defendants' contention that the complaint fails to state a claim for breach of fiduciary duty. Even where a plaintiff's allegations 'do not directly address the process by which the Plan was managed, a claim alleging a breach of fiduciary duty may still survive a motion to dismiss if the court, based on circumstantial factual allegations, may reasonably infer from what is alleged that the process was flawed,' the opinion states." [Moreno v. Deutsche Bank Americas Holding Corp., No. 15-9936 (S.D.N.Y. Oct. 13, 2016)]

DOL Rule Change Forces Due Diligence Process Makeover
"[T]he RFP method will likely be considered a fiduciary act. That means the mere inclusion of irrelevant questions may demonstrate a lack of knowledge and arouse suspicions regarding evaluator competency. An inability to provide objective reasons as to why a particular consultant/advisor was chosen may raise similar questions regarding credibility and the assessment process. With that in mind, the issue becomes: how should one score a purely subjective set of questions?"

Financial Advisor Master Plan for DOL Compliance (PDF)
"As firms scramble to comply, four key questions rise to the surface: [1] How will the DOL Conflict of Interest Rule impact their current mode of business? [2] What do they need to do over the next seven months to comply by April 10, 2017 when the new standard goes into effect? [2] What steps need to be taken during the transition period from April 10th to 'go live' on January 1, 2018? [4] And perhaps most important, how can they turn this compliance challenge into a competitive advantage? To not only survive, but thrive in the post DOL-rule era, firms need to map out a plan to keep them focused and on track."

Getting the Facts Straight about Qualified Plan Loans
"[Is] it worth taking a loan from your retirement plan? In short, no. However, it is still important to weigh the options of taking such a loan. [This article describes] the major pros and cons of taking loans from your employer's retirement plan."
Castle Rock Investment Company

Six Social Security Changes Coming in 2017
"A modest increase in payments.... A higher tax cap.... Increased earnings limit.... An increase in the maximum possible benefit.... No more double claiming.... Dependents can't receive benefits if you suspend payments."
U.S. News & World Report


The Reinvention of DC Is Not for the Sake of Plan Sponsors
"[W]hile DC may be less cost-effective than DB, it's more cost-effective than IRAs (which are the focus of recent efforts by a number of states to expand retirement coverage). As those programs move forward, as open MEPs gain support, and as the reinvention not just of DC but of the whole retirement system continues, plan sponsors are an important stakeholder in the conversation -- but there are many others, too."
Russell Investments


Asset-Based 401(k) Admin Fees Are Unreasonable, So Fiduciaries Should Avoid Them
"The problem with 401k providers charging asset-based administration fees is that plan assets have little to do with their level of service, meaning a 401k plan with lots of assets can pay way more than a 401k plan with fewer assets for the same 401k administration services. That's not right and a potential source of liability for 401k fiduciaries with a responsibility to keep 401k fees reasonable."
Employee Fiduciary

Executive Compensation and Nonqualified Plans

[Guidance Overview]

SEC Publishes FAQs on Pay Ratio Rule
"Some of the FAQs, or in SEC parlance CDIs (Compliance and Disclosure Interpretations), address the question of certain permissible matters if an issuer decides to identify the median employee using a consistently applied compensation measure (CACM) instead of annual total compensation ... The SEC also noted that Item 402(u) does not define or even address furloughed employees.", a blog by Stinson Leonard Street

2016 Corporate Governance and Incentive Design Survey
"Combining the roles of CEO and Board Chair continues to be the slight majority practice, with 54% of companies choosing to combine these positions. More than one-half (57%) of the Meridian 250 disclose a mandatory retirement age in which a director may no longer stand for re-election."
Meridian Compensation Partners, LLC

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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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