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[Guidance Overview]

Do You Need to Send Various Annual Notices to Plan Participants by the End of This Month? (PDF)
"[A] table provides a list of the content and deadlines for the most common notices that plan sponsors may need to distribute [including many that are required at least 30 days before the beginning of the plan year]. It includes: [1] Traditional Safe Harbor 401(k) Notice; [2] Qualified Automatic Contribution Arrangements for a Safe Harbor 401(k) Notice; [3] Eligible Automatic Contribution Arrangement Notice; [4] Qualified Default Investment Alternative Notice (QDIA); [5] Non-Safe-Harbor Automatic Contribution Arrangement Notice; [6] Annual participant fee disclosures (each plan will have a different deadline for this notice, and the deadline is different each year)."
Alston & Bird LLP


DST Retirement Solutions - Rollover Solutions

Sponsored by DST Retirement Solutions

The DOL fiduciary rule is compelling advisors to carefully review their practices around giving advice and the handling of rollovers. Advisors are challenged with how to offer choice, education versus advice, and provide a better client experience.

[Guidance Overview]

Mandatory Payroll Deduction Savings Programs Are on the Rise
"Five states -- California, Connecticut, Illinois, Maryland, and Oregon -- have passed legislation providing for automatic enrollment in a state payroll deduction savings program, as summarized below. Employers with operations in those states that do not offer their own employee retirement plan should prepare to comply.... Three other states have codified a voluntary approach to retirement savings.... Michigan (HB 5776), New York (AB 8332 / SB 6045), and Pennsylvania (HB 2396) currently have automatic payroll deduction legislation pending. It is unclear whether these bills will advance during their current legislative sessions."

[Guidance Overview]

DOL Issues 'Investment Advice' FAQs, Continues Search for Ideal Balance for the Brave New Fiduciary World
"In many respects, the FAQs do not break new ground. In some cases, however, they do provide useful clarifications, and, in others, there is some new information and guidance. [This article] is a summary of certain aspects of the FAQs."

IRS Publication 4334: Simple IRA Plans for Small Businesses (PDF)
16 pages; dated Oct. 2016. "A SIMPLE (Savings Incentive Match Plan for Employees of Small Employers) IRA plan offers great advantages for businesses that meet two basic criteria. First, your business must have 100 or fewer employees (who earned $5,000 or more during the preceding calendar year). In addition, you cannot currently have another retirement plan.... [C]ompared to other types of retirement plans, SIMPLE IRA plans offer lower start-up and annual costs ... they are just simpler to operate."
Internal Revenue Service [IRS] and Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

IRS Publication 4674: Automatic Enrollment 401(k) Plans for Small Businesses (PDF)
22 pages, dated Oct. 2016. "Approximately 30 percent of eligible workers do not participate in their employer's 401(k)-type plan. Studies suggest that automatic enrollment plans could reduce this rate to less than 15 percent, significantly increasing retirement savings. Whether you already have a 401(k) plan or are considering starting one, automatic enrollment 401(k) plans offer many advantages."
Internal Revenue Service [IRS] and Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]


The Advisor's Guide to Qualified Plans

Sponsored by The National Underwriter Company

The Advisor's Guide to Qualified Plans enables you to handle all aspects of qualified plans and provide the perfect solution for each client on a case-by-case basis, without a one-size fits all cookie cutter approach. Print and eBook editions available.

Multiemployer Defined Benefit Pension Plans: A Primer and Analysis of Policy Options (PDF)
30 pages. "Congress established separate PBGC programs to insure single and multiemployer DB pensions. For example, PBGC becomes the trustee of terminated single employer DB pension plans. PBGC does not become the trustee of multiemployer DB pension plans; rather, it makes loans to insolvent multiemployer DB plans so the plans may continue to pay participants' guaranteed benefits. Although PBGC has sufficient resources to make loans to smaller multiemployer DB plans, the insolvency of a large multiemployer DB pension plan would likely result in a substantial strain on PBGC's multiemployer insurance program." [Report R43305, dated Nov. 3, 2016.]
Congressional Research Service [CRS]

The Pension Benefit Guaranty Corporation: A Primer (PDF)
21 pages. "In FY2015, PBGC insured about 23,600 DB pension plans covering about 40 million people. It paid or owed benefits to 1.5 million people. PBGC is the trustee of 4,706 single-employer plans. PBGC provided financial assistance to 57 multiemployer pensions.... Most workers in single-employer plans taken over by PBGC and multiemployer plans that receive financial assistance from PBGC receive the full pension benefit that they earned." [Report 7-5700, Nov. 3, 2016.]
Congressional Research Service [CRS]

Retirement Plan Best Practices: Plan Governance (PDF)
12 pages. "In this paper, [the authors] look at overall plan governance, answering questions such as: [1] What documents should you have? [2] What is an optimal structure for your committee and who should be on it? [3] What type of decision-making process should you implement? [4] How often does the committee need to meet and what should be on the agenda? [5] How can you monitor service providers? Additionally, ... a fiduciary checklist [is included] at the end of the paper so that you can check your committee practices against fiduciary best practices as they pertain to plan governance."
Arnerich Massena

Document, Document, Document: Fee Policy Statement Helps Employers Evaluate Fees, Services
"Principal Financial Group® has created a sample fee policy statement that provides an objective process for managing and allocating those fees.... [A] fee policy statement could cover: [1] The plan's purpose; [2] Fiduciary duties relating to the plan's payment of fees; [3] Monitoring and evaluating whether fees are reasonable, including how and when fees will be reviewed; [4] Fee collection method(s) and how they are evaluated; [5] Communication of fees to participants."
Principal Financial Group

Managing Employee Benefit Risks in a New Regulatory Era
"For those leaders dedicated to high performance across all areas of their organization, keeping the following questions in mind will help keep them on the newly defined path toward fiduciary excellence: [1] What specific steps comprise ERISA's fiduciary requirements? [2] What are our ERISA plan risk assessment standards? [3] How do our policies align with our actual fiduciary behaviors? [4] Do our partners have conflicts of interest that may negatively impact our organization or its employees? [5] How do we measure our performance as a fiduciary committee and how do we measure that of our providers?"

NAFA to Appeal District Court Decision on DOL Fiduciary Rule
"[Chip Anderson, Executive Director of the National Association of Fixed Annuities (NAFA),] stressed that NAFA would move quickly to get the case up to the appellate court and would continue to seek a preliminary injunction. Anderson said NAFA remains optimistic that the courts will ultimately find the rule to be an overreach by the [DOL] that is inconsistent with existing tax and financial services laws."

Top Plaintiffs Law Firms Filing ERISA Class Actions
"During 2015 and 2016, court dockets across the nation had an uptick in ERISA lawsuits seeking class action treatment for participants who accuse their plan sponsors and administrators of breaching their fiduciary duties.... This litigation uptick is making large employers rely more on certain boutique and big law firms to defend them. In the same way, it appears participants who want to challenge their plan fiduciaries over how they manage their retirement plans are relying on a small pool of plaintiffs law firms."
Bloomberg BNA

Corporate Pension Funded Status Improved by $28 Billion in October (PDF)
"October's funded status boost was the largest of 2016. The deficit fell to $410 billion due to interest rate gains experienced during October. As of October 31, the funded ratio increased to 77.3%, up from 76.3% at the end of September."


Till Death Do Us Part? The Effect of Mortality Changes on Pension Funding
"[L]ongevity risk isn't as important as the direction of real rates in terms of impacting pension deficits....[D]efined-benefit pensions ... lower costs, pool investment and longevity risk which means people with a DB plan never run the risk of outliving their savings during their golden years....[D]efined-benefit plans are not just good for the economy, they're also good for people's health.... If people know they are going to retire with a safe, secure defined-benefit pension, they can plan their retirement with less stress knowing they won't succumb to pension poverty."
Pension Pulse

Benefits in General

The Enforceability of ERISA Forum Selection Clauses: Two Recent 'Against-The-Trend' Cases and an Uncertain Future
"For those interested in the law of ERISA forum selection clauses, 2016 has been a year to remember. The majority of courts to address this issue have ruled in favor of enforcing forum selection clauses. However, going against the trend, two federal district courts recently determined that forum selection clauses are automatically invalid and unenforceable within the ERISA context ... Prior to these summer cases, only two reported district court cases held that forum selection clauses in ERISA plans are inconsistent with the statute and therefore unenforceable."
Trucker Huss

Should Your ERISA Plan Have a Forum Selection Clause?
"This simple provision should promote significant cost savings and enhance uniformity and predictability for administrators defending plan-related claims in federal court. For example, an employer headquartered in New York may have employees in Florida and Alaska that participate in the employer's plan. Without a forum selection clause, ERISA's default venue provision probably permits participants to bring their plan-related lawsuits in Florida or Alaska. Some actions could also be brought in a state court, depending on the claim."
Bradley Arant Boult Cummings LLP

Executive Compensation and Nonqualified Plans

ISS Issues Proposed Policy Updates for 2017
"For the first time in many years, the proposed updates do not modify U.S. policy on compensation matters (e.g., policies relating to Say on Pay and equity plan proposals). However, ISS announced a material change in its U.S. pay for performance assessment that will take effect for the 2017 proxy season."
Meridian Compensation Partners, LLC

When It Comes to Say on Pay, What's the Right Frequency, Shareholders? (PDF)
"While annual vote frequency is currently the majority practice, most companies pushed to hold votes triennially when making their initial frequency recommendations in 2011 ... Ultimately, more than half of the companies (55%) originally recommending vote frequencies other than annual ended up implementing annual votes after evaluating the outcome of their shareholder vote.... Given the expected volume of frequency votes at 2017 annual meetings, the time is right for shareholders to reevaluate factors they might consider when thinking about their preferred say-on-pay frequency."
Willis Towers Watson

Press Releases

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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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