Retirement Plans Newsletter

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Employee Benefits Jobs

Webcasts and Conferences

Plan Documents: ERISA, Section 125, SPDs and Wraps, Oh My!
November 1, 2016 WEBCAST
Cowden Associates, Inc.

Startup Company Carve-Out Plans: Mechanics, Tax Obstacles, and Optimization
November 2, 2016 WEBCAST
Practical Law Company

Complying with the ACA and Best Practices in Worksite Smoking Cessation Programs
November 14, 2016 WEBCAST
Midwest Business Group on Health

2016 Winter Virtual Conference
December 8, 2016 WEBCAST
ASPPA [American Society of Pension Professionals & Actuaries]

Ethical Considerations for the Employee Benefits Practitioner
December 15, 2016 WEBCAST
ABA Joint Committee on Employee Benefits [JCEB]

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[Guidance Overview]

DOL Issues First Guidance on Fiduciary Rule
"The FAQs address a number of important topics: ... Scope of BIC Exemption ... What Constitutes Unreasonable Compensation? ... Incentive Compensation for FAs ... Recruitment Bonuses ... Level Fee Fiduciaries ... Bank Networking Arrangements ... Effective Date."
Morrison & Foerster LLP, via Lexology


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DOL Issues First of Three FAQs on New Fiduciary Standard
"This first set of FAQs addresses how the Labor Department will implement the new rule.... [T]he 'best interest contract' exemption ... provides that financial institutions cannot 'use or rely upon quotas, appraisals, performance or personnel actions, bonuses, contests, special awards, differential compensation or other actions or incentives that are intended or would reasonably be expected to cause advisers to make recommendations that are not in the best interest of the retirement investor.' The FAQ addresses how that would apply to commission rates based on volume, with escalating thresholds."
Pensions & Investments

The Importance of Using Prudent Practices in Today's Lawsuit-Filled Environment
"[1] Start by organizing your approach to managing the plan.... [2] Formalize your approach by adopting an effective investment policy statement and establishing proper portfolio diversification. [3] Implement your changes by putting all of the planning, organizing and formalizing that was involved in the initial stages into practice ... [4] Finally, monitor how well the plan and processes that have been put in place are working, and make adjustments as needed to serve investor's best interests."

401(k) Contribution Limit Unchanged in 2017 for Employees, Up for Employers
"Employee 401(k) contributions for plan year 2017 will once again top off at $18,000 ... . But maximum contributions from all sources (employer and employee combined) will rise by $1,000. A few other defined contribution and defined benefit plan limits will be adjusted ... For employee contributions, however, the news is 'no changes two years running now,' said Brian Donohue, a partner with October Three Consulting ... The last increase was a $500 jump from 2014 to 2015."
Society for Human Resource Management [SHRM]

Defined Contribution Plan Participants' Activities, First Half 2016 (PDF)
"DC plan withdrawal activity in the first half of 2016 remained low and was similar to the activity observed in the first half of 2015.... The vast majority of DC plan participants continued contributing to their plans in 2016:H1.... Most DC plan participants stayed the course with their asset allocations as stock values edged up during the first six months of the year.... DC plan participants' loan activity was little changed at the end of June 2016."
Investment Company Institute [ICI]

Three Retirement Plan Head Scratchers (PDF)
"[W]hen it comes to saving for retirement, sometimes the decisions that come after enrolling in your employer's plan can be as difficult as making that initial choice to save. How do you know you are making the right decision from a tax perspective? What about other benefits options? And what if you need money? Is your retirement plan the best place to get it? The answers to these questions are unique to you and your personal situation, but a few rules of thumb can help."

Going Down: Public Pension Plan Return Assumptions
"Public pension plans have abandoned their 8% return assumption en masse since 2010, accepting that the current investing environment cannot keep pace with that level of return.... [T]he majority of plans as of FY 2016 have shifted their return assumptions into the 7.25%-to-7.5% range. Half of the number of plans that targeted a return of 8% in 2005 have maintained that into the current period."
Pensions & Investments

Focus on How Much You Can Spend During Retirement -- Not How Much You Can Withdraw
"The point of the exercise is to determine approximately how much you can afford to spend each year while meeting your financial objectives, not how much to withdraw. Sometimes adding the amount you can withdraw under these [rule of thumb] approaches to other income you may be receiving for a given year will give you something close to a reasonable spending budget for that year, and sometimes it won't."
Ken Steiner, FSA Retired

Benefits in General

[Official Guidance]

Text of DOL Compliance Guidance for Employee Benefit Plans in Wake of Hurricane Matthew, Related Disruptions
"[1] The department will not treat any person as having violated the provisions of Title I of ERISA solely because they complied with the [relief from certain verification procedures] of the IRS announcement.... [2] The department recognizes that some employers and service providers ... located in identified covered disaster areas will not be able to forward participant payments and withholdings to employee pension benefit plans within the prescribed timeframe.... [3] The regulations provide an exception to the advance notice requirement when the inability to provide the [blackout] notice is due to events beyond the reasonable control of the plan administrator and a fiduciary so determines in writing.... [4] [P]lan participants and beneficiaries may encounter ... difficulties meeting certain deadlines for filing benefit claims and COBRA elections.... Plan fiduciaries should make reasonable accommodations to prevent the loss of benefits in such cases and should take steps to minimize the possibility of individuals losing benefits because of a failure to comply with pre-established timeframes."
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

The Unfortunate Truth About Your SPDs (PDF)
"Because the SPD is a reference tool for the participant, it is essential that it be an effective one. To do this, the SPD needs to meet two requirements: [1] A participant must be able to find the information he or she wants quickly and easily. [2] Once the information is found, it has to be easily understood by the participant."
Bryan, Pendleton, Swats and McAllister, Llc

Executive Compensation and Nonqualified Plans

Proposed Deferred Compensation Plan Rules May Aid Tax-Exempt Hospitals
"Under the proposed regulations, an executive can agree to defer a portion of his or her compensation to a later year in return for an agreement to provide two years of substantial services or an agreement not to compete with the nonprofit for two years. Additionally, the proposed regulations require the compensation paid out to equal more than 125 percent of the amount that the executive agreed to defer."
Bloomberg BNA

Press Releases

DOL Resolves Lawsuit to Restore Funds Owed to Dell Inc. Retirement Plan in Monticello, Minnesota
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

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David Rhett Baker, J.D., Editor and Publisher
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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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