Retirement Plans Newsletter

November 7, 2016

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Employee Benefits Jobs

Retirement Plan Consultant / Specialist
Associated Pension Consultants
in CA

Corporate Counsel - Employee Benefits
Marriott International, Inc.
in MD

Actuary
USI Consulting Group
in CT

401(k) Administrator
Capital Retirement Plan Services, Inc.
in PA

Pension Plan Administrator
Growing Retirement Plan Administration Firm
in NY

DB Sr. Actuarial Consultant
USI Consulting Group
in CT

Retirement Solutions Document Coordinator
PNC
in PA

Client Solution Advisor
PNC
in PA

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Webcasts and Conferences

Nondiscrimination Rules for Closed Pension Plans
RECORDED
IRS [Internal Revenue Service]

Employee Plans Compliance Unit (EPCU) - 2016 Updates
RECORDED
IRS [Internal Revenue Service]

Davis Bacon Prevailing Wage Retirement Plans
RECORDED
ASPPA [American Society of Pension Professionals & Actuaries]

Recent Federal Developments Affecting Employee Benefits
December 8, 2016 WEBCAST
Clear Law Institute

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[Official Guidance]

Text of IRS Notice 2016-67: Applicability of Section 411(b)(5)(B)(i) to Implicit Interest Pension Equity Plans (PDF)
"[T]his notice addresses the applicability of the market rate of return limitation rules to a type of [pension equity plan (PEP)] that applies a deferred annuity factor to the participant's accumulated benefit in order to determine deferred benefits (a type of PEP often referred to as an 'implicit interest PEP'). In addition, this notice requests comments on potential proposed regulations that would subject implicit interest PEPs to the market rate of return limitation."
Internal Revenue Service [IRS]

[Advert.]

401(k) Answer Book - 2017 Edition

Sponsored by Wolters Kluwer

The hunt for specific answers to important questions begins - and ends - with this clear, comprehensive resource. Covers all aspects of plan design and administration, as well as the relationships of 401(k) plans with other types of retirement plans.


[Official Guidance]

Text of PBGC Disaster Relief Announcement 16-16, in Response to Hurricane Matthew in Virginia
"This Disaster Relief Announcement provides relief relating to PBGC deadlines ... [to] any person ... (e.g., a plan administrator or contributing sponsor) that is located in the disaster area for which the [IRS] has provided relief in VA-2016-08, November 3, 2016.... The relief generally extends from October 7, 2016 through March 15, 2017. The disaster area consists of the independent cities of Chesapeake, Newport News, Norfolk and Virginia Beach."
Pension Benefit Guaranty Corporation [PBGC]

Text of Opinion Granting Summary Judgment for DOL in NAFA Challenge to Final Fiduciary Rule, Denying Injunction
92 pages. "[NAFA] first argues that title I of ERISA does not authorize the Department to impose fiduciary duties on those who advise IRAs.... [W]hen they regulate IRA advisers, PTE 84-24 and the BIC exemption rely on the Department's authority under title II. Second, NAFA argues that title II does not impose fiduciary duties on those who advise IRAs ... But that contention ignores the plain language of the statute, which grants the Department ... broad authority to adopt non-statutory exemptions and to impose conditions on any such exemptions.... Third, NAFA argues that the Department's use of its exemption authority will lead to 'an absurd and irrational result' because it will subject those IRA advisers who are paid on a commission basis (and who must, accordingly, rely on the exemption) to ERISA fiduciary duties, but will not extend those same duties to those who are paid an asset management fee (and who, accordingly, need not rely on the exemption). But, far from irrational, that is precisely the point; in the Department's view, those who are paid on a commission basis may be tempted to make investment recommendations that maximize their compensation while disserving the interests of plan participants and beneficiaries. Advisers paid an asset management fee generally will not face this conflict. Finally, NAFA argues that ... the fiduciary standards incorporated in PTE 84-24 and the BIC Exemption would override state insurance law suitability standards.... NAFA ignores the fact that the preemption provisions apply only to title I of ERISA, and thus have no bearing on the scope of the Department's title II authority[.]" [Nat'l Assoc. for Fixed Annuities (NAFA) v. Perez, No. 16-1035 (D.D.C. Nov. 4, 2016)]
U.S. District Court for the District of Columbia

Judge Denies NAFA Injunction Request Against DOL Rule
"Judge Randolph D. Moss denied a motion for a preliminary injunction [Nov. 4] by the National Association for Fixed Annuities [NAFA] in its lawsuit to stop the [DOL] fiduciary rule.... Moss granted the DOL request for summary judgment.... The judge delivered a 92-page ruling that meticulously addresses the six claims raised by the plaintiffs." [Nat'l Assoc. for Fixed Annuities (NAFA) v. Perez, No. 16-1035 (D.D.C. Nov. 4, 2016)]
InsuranceNewsNet.com

Text of IRS Publication 4806: Profit Sharing Plans for Small Businesses (PDF)
20 pages, dated Oct. 2016. "This booklet highlights some of a profit sharing plan's advantages and some of your options and responsibilities as an employer operating a profit sharing plan. For more information, a list of resources for you and for prospective plan participants is included at the end of this booklet."
Internal Revenue Service [IRS] and Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

[Advert.]

The Ultimate Retirement Professional Conference Experience

Sponsored by ASPPA

Limited travel budget? Let ASPPA bring the conference to you. Register for one of four ASPPA Regional conferences - Chicago, Boston, Cincinnati, or Philadelphia! We'll get you up to speed without the travel.


Eight Questions Plan Sponsors Should Ask About Adding a Roth Feature
"[1] What is a Roth? ... [2] What types of employees might this appeal to? ... [3] What are the limits? ... [4] What is an in-plan Roth conversion? ... [5] Can employers make a match on a participant's Roth contributions? ... [6] Can an employee take a loan? ... [7] Can an employee roll money into their Roth source? ... [8] How would you establish a Roth feature in your Plan?"
Strategic Benefit Services

What to Consider When Investing in Target Date Retirement Funds
"Any given glide path may be too steep for some people and too shallow for others, depending on their circumstances. As an investor, you can compensate for that by choosing funds dated later or earlier than your targeted retirement date. If the 2030 fund gets too conservative too fast for your taste, for example, you could choose the 2040 fund instead."
Los Angeles Times; free registration may be required

Measured Use of 12b-1 Fees Will Continue
"Some experts believe retirement plan sponsors shouldn't offer any mutual funds with 12b-1 revenue-sharing fees in their investment lineups; on the other hand, other experts maintain that by crediting revenue back to the plan, funds with 12b-1 fees can actually cost less than those without such fees. In either case, given their strict fiduciary responsibility, defined contribution plan sponsors have a duty to compare funds with these fees to those without -- and to decide which fits best for their participants' individual circumstances."
planadviser

DOL Fiduciary FAQ Shatters Broker-Dealer Recruiting Deals
"However, in a new FAQ regarding the details of the upcoming fiduciary rule, the [DOL] has now declared that asset and production thresholds to earn recruiting bonuses are considered an 'acute conflict of interest' that cannot merely be mitigated and must be avoided. In other words, all the typical contingencies that broker-dealers attach to the back end of recruiting deals will be banned in the future."
Michael Kitces in Nerd's Eye View

Oregon Treasury Unveils State-Run Retirement Plan for Private Employees
"Although the plan will not get fully underway until 2018, the treasury wants as much feedback as possible from the roughly 64,000 affected employers before details are hammered out.... About 60 percent of Oregon workers, or about 1 million people, don't have access to an employer-sponsored plan. Under legislation passed in 2015, more than 800,000 of those workers will be automatically enrolled, through their employers, in the new state-sponsored plan, unless they opt out."
The Bulletin

Executive Compensation and Nonqualified Plans

[Guidance Overview]

SEC Issues C&DIs on CEO Pay Ratio Disclosure, Exempt Offerings under Rule 701 and Sales of Securities Under Rule 144(d)
"[A]ny measure that reasonably reflects the annual compensation of employees may serve as a compensation measure. Workers whose compensation is determined by a company should be included in the determination of the company's employee population regardless of whether such workers would be considered 'employees' for tax or employment law purposes.... The holding period under Rule 144(d) for restricted securities received by an employee pursuant to an individually negotiated employment agreement begins when the employee is deemed to have paid for such securities."
Dechert

Press Releases

Steven H. Sandell Grant Program Call for Submissions
Center for Retirement Research at Boston College

Dissertation Fellowship Program Call for Submissions
Center for Retirement Research at Boston College

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David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
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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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