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[Guidance Overview]

DOL Issues Guidance on Fiduciary Rule's New Best Interest Contract Exemption
"The Guidance clarifies that new conditions on all pre-existing PTEs must be met by April 10, 2017. For the two new PTEs -- the Best Interest Contract (BIC) and Principal Transactions Exemption -- the DOL has provided a 'transition period' for compliance. Financial institutions and advisers relying on either of these PTEs must meet partial requirements by April 10, 2017. To rely upon one of these exemptions on April 10, 2017, impartial conduct standards must be met."
Jackson Lewis P.C.


Phased Retirement Programs: Exploring the Issues

Sponsored by Lorman and BenefitsLink

Dec. 5 webinar. Learn practical and legal advice for implementing a phased retirement program. Identify the situations in which phased retirement may be beneficial, structure arrangements in such a way as to avoid the practical and legal pitfalls.

Financial Engines and Xerox Questioned in ERISA Suit
"[In] order to be included as the investment advice service provider on Xerox HR's platform, plaintiffs suggest [Financial Engines] inappropriately agreed to pay -- and is paying -- Xerox HR a significant percentage of the fees it collects from Ford's 401(k) plan investors.... While the fees are 'being paid ostensibly for "data connectivity services" as described ... on Form 5500,' plaintiffs argue they are in reality 'being paid as part of a so-called 'pay-to-play' arrangement; better described in the pejorative as a kickback.' " [Chendes v. Xerox HR Solutions, No. 16-13980 (E.D. Mich, complaint filed Nov. 9, 2016)]

Questions Plan Fiduciaries Should Ask About Target Date Fund Strategies
"[1] What is a Qualified Default Investment Alternative (QDIA)? ... [2] What due diligence should plan fiduciaries perform when choosing a TDF? ... [3] What is the importance of a TDF's glide path in meeting retirement objectives? ... [4] Why adopt a strategy to index some asset classes vs. others? ... [5] Should a plan fiduciary employ an active or passive strategy for managing TDFs? ... [6] How does a plan fiduciary decide whether a custom or proprietary TDFs is more appropriate? ... [7] What is the horizon for TDFs enhancements?"
Strategic Benefit Services

Fiduciary Rule Survives First Court Challenge
"The court rejected arguments that the [DOL] exceeded its authority in issuing the fiduciary rule and was not sympathetic to claims that sellers of annuities would not be able to operate under the new rules, even noting that a commission-based compensation system was not the only option.... This decision is expected to be appealed, so it is certainly not the last word on whether all or parts of the fiduciary rule are valid. However, the reasoning in this decision may provide a blueprint for the other courts issuing their decisions." [Nat'l Assoc. for Fixed Annuities (NAFA) v. Perez, No. 16-1035 (D.D.C. Nov. 4, 2016)]
Cohen & Buckmann, P.C.

Trump, Ryan Have Three Paths to Killing DOL Fiduciary Rule
"As far as we know, Donald Trump never specifically mentioned the [DOL] fiduciary rule during his 17-month campaign for president. That hasn't stopped plenty of would-be surrogates from stepping up to speculate on what he will do with the rule after his Jan. 20 inauguration.... One thing the Trump administration can do is suspend the effective date of the rule, which is slated to begin taking effect April 10, 2017. A suspension will enable Republicans in the administration and Congress to decide on a course of action. The three options include: [1] Legislation ... [2] Regulation ... [3] The Courts."


Individual Retirement Account Answer Book - Twenty-Third Edition

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Clear, concise explanations, numerous examples, and comprehensive coverage of the issues involved in advising clients about investing in traditional IRAs, Roth IRAs, SIMPLE IRAs, SEP IRAs, and Coverdell ESAs.

Treasury Denies Teamsters Local 469 Application to Reduce Pension Benefits
"The pension fund assumed an annual investment return of 7.25% for the entire 45 years projected in the application to achieve solvency. [Treasury's Special Master Kenneth Feinberg] said those assumptions were not reasonable because they did not use appropriate investment forecast data, were overly optimistic, and inappropriate given a negative cash flow and other factors."
Pensions & Investments

Multiemployer Pension Funded Status Has Been Steady So Far in 2016 (PDF)
"The aggregate funded percentage for multiemployer plans is estimated to be 76% as of June 30, 2016, compared with 75% as of December 31, 2015. For most multiemployer pension plans, estimated 2016 investment experience through June 30, 2016, was over 3%, just slightly below expected returns. About one-half of the total underfunding for multiemployer plans continues to be attributable to plans that are less than 65% funded. Of the 300+ critical plans, about 40% are projected to be insolvent at some point. Can these plans be helped by benefit suspension provisions of [MPRA]?"

Era of Low Interest Rates Hammers Millions of Pensions Around World
"Managers handling trillions of dollars in government-run pension funds never expected rates to stay this low for so long. Now, the world is starved for the safe, profitable bonds that pension funds have long needed to survive. That has pulled down investment returns and made it difficult for funds to meet mounting obligations to workers and retirees who are drawing government pensions."
The Wall Street Journal; subscription may be required


The DOL Rule Is DOA -- and That's Just the Beginning
"The DOL fiduciary rule will not survive the transition to a Trump administration. That's according to MarketCounsel president and CEO Brian Hamburger, who, as it turns out, was roommates with ... Reince Priebus when they attended the University of Miami School of Law.... Hamburger says not only is the DOL rule history, but that some parts of the Dodd-Frank Act may not be long for this world, either."

Benefits in General

Plaintiff's State Law Claims Based Upon Benefit Promises Avert Preemption
"If an employer offers a benefits arrangement to a prospective employee and later denies benefit claims based on plan eligibility requirements, could the employee assert state law claims or would ERISA preempt them? ... Rather than interpreting ERISA plans, [the plaintiff] argued, the Court need only consider the defendants' representations and promises to him before his employment and whether those representations and promises were ultimately false or breached.... The Court held that the plaintiff's state law claims were not preempted, observing that a state law claim may have an independent legal basis 'even if an ERISA plan is a factual predicate in the case.' " [Lapham v. Accenture, LLP, No. 16-1394 (D.N.J. Nov. 8, 2016)]
Harmon on Health Plan Law

Identifying ERISA-Covered Employee Benefit Plans (PDF)
11 pages. "[If] benefits are subject to ERISA, the employer or employee association sponsoring the plan or arrangement has certain obligations regarding the rights and benefits of employees (and their beneficiaries). If the employer fails to satisfy these obligations, it may face [DOL] enforcement action, civil penalty assessments, and/or participant lawsuits.... This practice note covers the following topics: [1] Significance of ERISA Coverage; [2] Determining Whether a Plan Is Covered by ERISA; [3] Identifying Plans That Are Excluded from ERISA Coverage; [4] Defining an ERISA Employee Benefit Plan; [5] Conclusions and Action Steps."
Holland & Knight, via Lexis Practice Advisor

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