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Fiduciary Rule FAQs Confirm Relief for Investment Advisers
"[FAQ 9] asks whether the full BICE precludes financial institutions from paying higher commission rates to advisers based on volume.... FAQ 19 addresses the relief available to 'level fee' fiduciaries under the BICE ... [It] makes clear that that the BIC lite is 'completely unusable in the case of commission arrangements or any arrangement that is exclusively for the sale of proprietary funds'[.]"
Bloomberg BNA


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401(k) Advisers Push for More General Investment Policies as Fiduciary Safeguard
"The policies governing plan sponsors' investment decisions in 401(k) plans are adopting language that's more general rather than prescriptive in nature, as a way to safeguard against fiduciary breach and future legal action ... Being overly specific when codifying an investment policy statement ... provides greater chance for a client to make a mistake ... These decisions could extend to the frequency of reviewing an investment policy, choice of asset classes and asset allocation, removal or addition of a fund, and fees, for example."

IMOs to Press Ahead With DOL Compliance
"[E]xecutives with independent marketing organizations (IMOs) say Tuesday's election results are not changing their plans to comply with the [DOL]'s fiduciary rule.... AmeriLife is one of at least 18 IMOs that have applied to the DOL for financial institution status under the rule, which raises investment standards for retirement advice. Financial institution status would allow the independent insurance agents recruited by IMOs to continue selling fixed indexed annuities (FIA) under the DOL's Best Interest Contract Exemption."

Questions Retirement Plan Sponsors Should Ask About Adding an Automatic Enrollment Arrangement
"[1] What is an Automatic Enrollment Arrangement? ... [2] What are the different types of Automatic Enrollment Arrangements? ... [3] How is the money invested when an employee is auto-enrolled? ... [4] What are the advantages of Automatic Enrollment for the plan sponsor? ... [5] What are the disadvantages of Automatic Enrollment for the plan sponsor? ... [6] What is Automatic Contribution Escalation? ... [7] Have Automatic Enrollment and Automatic Escalation been well-received?"
Strategic Benefit Services

Coming Soon: An NYC-Run Retirement Plan for Private Employers
"The New York City Comptroller has proposed a program (the 'New York City Nest Egg') that would default every New York City worker into either a tax-qualified retirement plan or an IRA. NYC's proposal is part of a broader, Blue State movement to require employers that don't already have retirement programs to provide them to their employees. [This article provides] some background on this movement generally -- where it came from and where it's going. [It then describes] some features of the NYC proposal that are both interesting and distinctive -- a 'curated marketplace,' a city-sponsored qualified retirement plan for private sector employers, and mandating investment exclusively in passively-managed funds."
Michael Barry, in Money vs. Time


The Advisor's Guide to Qualified Plans

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Pension Indicator, October 2016
"Equities saw some pullback in October, but so did fixed income instruments ... Treasuries climbed out of the record low yields, and the offsetting higher yields lowered expected liabilities. This was mainly a wash for most plans, but a slightly steeper yield curve rewarded more immature pension plans. Looking ahead to year-end, most pension plans are staring down a 50-75 basis point decrease, which would generally increase liabilities by 6-10%."
Findley Davies

San Jose Alternative Pension Plan Appears to Pass
"About 62 percent of San Jose voters approved Measure F, which will allow the city to adopt retirement health care and pension benefits it agreed on with its 11 employee unions.... Measure F's proponents have argued that the negotiated plan will save the city $3 billion in the next three decades and draw in new and former employees, including police officers needed to help fill patrol shifts as the city's population grows."


After the 2016 Election: What Happens Now for Retirement Policy
"On the regulatory front, ... there will be a move to repeal various Executive Orders and other regulations that were advanced under President Obama, including: the overtime rule; paid sick leave for federal contractors; ... and conflict of interest rule. In addition, [the author expects] a decrease in the number of new regulations that impact private retirement plans and other compensation practices."
The ERISA Industry Committee [ERIC]


Financial Planners Must Push Forward as Advocates for Investors
"Based on past statements from Republican officials on Capitol Hill, there is every reason to believe that an undivided Republican Congress will repeal the Dodd-Frank Act, and President Trump will unravel the DOL fiduciary rule. The odds are that all this will happen within the first couple of months of the new year. However you feel about a Trump presidency, this will be a severe setback for the concept of professionalism in the financial planning world, and the strong fiduciary standard generally."
Bob Veres in Inside Information


Comment on Proposed ASOP: Assessment and Disclosure of Risk Associated with Measuring Pension Obligations and Determining Pension Plan Contributions -- Second Exposure Draft (PDF)
"[T]he very different public plan and private plan responses to changing economic conditions were done under the umbrella of existing actuarial standards of practice. Furthermore, the different discount rate and earnings assumption responses have led to very different risk-taking by public and private plans.... The important point here is not the cause of these differences, but the fact that nothing in actuarial standards of practice prevents these different approaches to risk evaluation and risk taking. The standards have not caused the differences, but they allow them."
Rockefeller Institute of Government

Benefits in General

The Financial Un-Wellness of HR
"Are we contributing to the financial 'un-wellness' of employees by putting such a heavy focus on retirement planning? Furthermore, are HR executives the most fitting to help people with these areas of their financial lives? ... According to a recent study, 56% of employers indicated they are very likely to create or focus on the financial well-being of employees in ways that expand beyond retirement decisions in 2016.... Unfortunately, because one benefit (retirement savings) has historically been placed in the spotlight for HR leadership and team members, handling the ever growing emphasis on personal finance is challenging."

Executive Compensation and Nonqualified Plans

[Guidance Overview]

More ISS Guidance
"For companies subject to ISS's quantitative pay-for-performance screens, ISS will display a company's three-year performance not only on TSR but also on six financial metrics relative to its ISS peer group ... ISS will compute relative three-year measures for each of the metrics, compared to the ISS selected peer group, compare performance on these metrics with relative compensation levels, and present the results, including an overall weighted financial performance metric, in a new standardized table."
Winston & Strawn LLP

Only Half of U.S. Employees Think They Are Paid Fairly
"Only about two-thirds of employees (65%) say they understand how their salary is determined, and less than four in 10 employees say they understand how their total compensation compares with that of the typical employee in their organization (39%) and with the typical employee in other companies (34%). When organizations begin to report on the CEO pay ratio and the pay of the median employee, these employees will not have the context to properly interpret those numbers."
Willis Towers Watson

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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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