Retirement Plans Newsletter

October 25, 2016 logo logo
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Employee Benefits Jobs

Executive Director

Associate Consultant / Retirement Plan Administration Specialist
Spectrum Pension Consultants, Inc.
in CA, HI, WA, Telecommute

DB Sr. Actuarial Analyst
USI Consulting Group
in CT

401(k) Senior Administrator and Team Leader
in KS

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Webcasts and Conferences

IRA Required Minimum Distributions
December 6, 2016 WEBCAST

What the Healthcare Law Means for Your Small Business
December 8, 2016 WEBCAST
Small Business Majority

Floor Offset Plans: Are They Worth the Effort?
December 13, 2016 WEBCAST
ASPPA College of Pension Actuaries [ACOPA]

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[Official Guidance]

Text of Draft 2016 IRS Form 5500-EZ (PDF)
Revised Oct. 24, 2016. "This form is required to be filed under section 6058(a) of the Internal Revenue Code. Certain foreign retirement plans are also required to file this form."
Internal Revenue Service [IRS]


The industry's best 5500 solution

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Before you consider your 2017 renewal with another provider, you owe it to yourself to check out! Learn More.

[Guidance Overview]

The 'Missive Gap': Employers to Cope Without Updated Plan IRS Determination Letters (PDF)
"[T]he new normal for [individually designed plans (IDPs)] will likely be extensive periods of plan life between initial plan adoption and plan termination in which plan sponsors will need to rely upon their judgment and that of their counsel and other plan advisors with respect to their compliance with new IRS plan document maintenance requirements. Some of the newly announced features provide employers some comfort, but the reality is that the maintenance of an IDP plan document in the future will likely entail inherently more employer risk and exposure than it has in the past."
Jackson Lewis P.C.

Application for Benefits Suspension: Automotive Industries Pension Plan
"The Automotive Industries Pension Plan application proposing benefit suspensions can be found [at the linked page]. The application is organized by the items specified in Revenue Procedure 2016-27. The Automotive Industries Pension Plan application is currently being reviewed and the review is expected to take several months."
U.S. Department of the Treasury

Implications of Negative Interest Rates on Retirement Plans
"While interest rates continue to hover near record lows, and in some cases negative territory, it is still appropriate to own bonds as part of a long-term diversified portfolio allocation.... However, retirement plan investors should review their asset allocations and be aware of the unintended risks in their portfolios. The three most important areas where misconceptions can lead to unintended consequences for retirees center on duration, global diversification, and credit or yield risk."
Cammack Retirement Group

Pension Funded Status Rises in 3rd Quarter
"In the third quarter of 2016, the funded status increased by one percentage point, from 76 percent to 77 percent. The rise was the result of a 3 percent asset increase and a 2 percent liability increase during the quarter. The plan's funded status started the year at 83 percent."
Segal Rogerscasey


The Conference is 'Virtual', but the Insights are Real.

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EEOC Files Appeal in Baltimore County Pension Case
"The [EEOC] is appealing a court ruling that absolved Baltimore County of having to return money to thousands of employees who overpaid into the pension system.... EEOC lawyers have argued that the county knew for years that its age-based pension plan rates were discriminatory, and the possibility of having to pay employees back should have been 'foreseeable for several decades.' A federal judge ruled in 2012 that the county had been wrong to overcharge older workers. In August, another judge ruled the county would not have to pay those workers back."
The Baltimore Sun

Commonwealth Financial to Dump Commission Business for IRA and 401(k) Accounts
"The nation's largest privately owned broker-dealer will no longer enable its affiliated brokers to offer commission-sold products in IRAs or qualified accounts like 401(k)s, effective Apr. 10, 2017."

18 Insurance Marketers Apply For DOL Exemption
"Eighteen independent marketing organizations have applied for a special exemption to sell fixed indexed annuities under the [DOL's] fiduciary rule ... The exemption would grant the marketing organizations 'financial institution' status. This would allow agents under contract with the marketing organizations to sell commission-based FIAs ... under the DOL rule's Best Interest Contract Exemption."


Retirement Advisers Speak Out on Next President
"When it comes to the DOL's new Fiduciary Rule, presidential politics cannot be avoided.... Of interest, though, is [a recent survey], where nearly a third of the respondents cite the Fiduciary Rule as the most important potential financial policy reform. How does one reconcile this with the vast support for Trump among financial providers?"
Fiduciary News


Think Your Retirement Plan Is Bad? Talk to a Teacher
"[M]any 403(b) accounts are riddled with complicated, expensive investment products that can cost their owners tens of thousands of dollars, if not more, over their careers. The 403(b) accounts that many workers contribute to are not subject to the more stringent federal rules and consumer protections that apply to 401(k) plans. In fact, of the $879 billion in total 403(b) assets, more than half is not subject to federal retirement plan rules[.]"
The New York Times; subscription may be required

Executive Compensation and Nonqualified Plans

[Guidance Overview]

Social Security Wage Base Hike In 2017 Affects Year-End Planning For Stock Options
"When you exercise nonqualified stock options or when restricted stock/RSUs vest, you owe Social Security tax up to this yearly income ceiling ... If your yearly income is already over that threshold, you can exercise nonqualified stock options or stock appreciation rights before the end of 2016 without paying Social Security tax, and therefore you can keep an extra 6.2% of the related income.... If you are already over the wage base for 2016 and expect to be eventually over the wage base for 2017, you can therefore save the $539.40 increase in Social Security tax simply by exercising stock options this year rather than in 2017."

[Guidance Overview]

NASDAQ Updates Equity Compensation Plan FAQs
"[U]pdated FAQs ... provide that an equity plan amendment to permit share withholding up to the maximum statutory withholding amount is not a material amendment requiring shareholder approval. The updated FAQ applies equally to equity plans that permit and prohibit liberal share recycling."
Meridian Compensation Partners, LLC

SEC Issues Additional Guidance on CEO Pay Ratio Rules
"Companies should ensure that the necessary data to calculate the ratio is available. This may require the creation of a multi-disciplinary project team, including members of the Human Resources, Finance, and Legal departments. Due to the flexibility of the rules in determining the median employee, companies should consider the various approaches ... and model out the results under each to help determine the most appropriate method of calculation."
Steven Hall & Partners

Press Releases

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David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

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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