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[Guidance Overview]

2016 Year-End 'To Do' List for Qualified Retirement Plan Sponsors
The list has five categories: [1] All Qualified Plans; [2] Section 401(k) Plans; [3] Defined Contribution Plans (Other Than Section 401(k) Plans); [4] Defined Benefit Plans; and [5] Section 403(b) Plans.
Snell & Wilmer


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2017 Planning for ERISA Single-Employer Defined Contribution Plan Operations
"The calendar provided in this [article] will help you set up your own schedule of activities to address as the year progresses so that you do not miss important deadlines for your qualified plans.... [It includes] a number of key issues for you to consider (along with the calendar deadlines) as we head into 2017."
Xerox HR Services

ERISA Basics National Institute: Section 401(k) Plans
34 presentation slides. Topic: [1] Who gets the money? [2] What money do they receive? [3] Where does the money go? [4] When do they get the money? [5] How is the money administered?
McDermott Will & Emery; McGuire Woods

401(k) RFP Template: How to Find the Top 401(k) Providers for Your Plan
"Your end goal with this 401(k) RFP template? To take a look under the hood and see how well your 401(k) advisor's team functions, how up-to-date their technology is, and how much time they'll really put into servicing your plan. What goes without saying is the tried-and-true methods of finding a 401(k) provider through word-of-mouth referrals are a thing of the past."

Redesign of DC Plans Focuses on Building the Right Oversight Process Moving Forward (PDF)
17 pages. "As plan trustees seek to offer the best possible investment approach, more are decoupling asset management from recordkeeping, virtually ending the bundled experience of 'all things in one place.' ... [T]he need for more effective plans requires more accountability and oversight. This requires a thorough process for monitoring the plan and making timely decisions about changes to the plan and investments."

Longevity and Liabilities: Bridging the Gap
16 pages. "[G]iven ongoing improvements in life expectancy, plan sponsors will increasingly have to focus on the risk posed by unexpected longevity improvements to the funded status of pensions, especially as a persistently low rate environment only exacerbates the present financial impact of longevity risk. Even sponsors with completely frozen, fully funded plans will be confronted with future liability growth due to longevity improvements. Understanding and quantifying the magnitude of longevity risk can help plan sponsors establish a framework for taking the appropriate actions today to ensure the ongoing health of their pension plans."

2016 Mortality Table Update -- Lower Liabilities Again!
"Plan sponsors that adopted the RP-2014/MP-2015 tables for last year's disclosure and adopt MP-2016 this year will see decreases to their accounting liabilities from what they would have been without this change.... The change is bigger for older participants. Depending on your plan's demographics it is expected that the change to accounting liabilities will be between 1.5% and 2.0%."
P-Solve LLC

PBGC Annual Report 2016: Keeping Our Commitment to America's Workers (PDF)
144 pages. "[In FY2016, the PBGC]: [1] Paid $113 million in financial assistance to 65 insolvent multiemployer plans. [2] Through the Early Warning Program, negotiated almost $3 billion in financial assurance to protect more than 367,000 people in plans at risk from corporate events and transactions.... To pay timely and accurate benefits in FY2016, the [PBGC]: [1] Assumed responsibility for more than 46,000 people in 76 trusteed single-employer plans. [2] Started paying benefits to almost 35,000 retirees in single-employer plans. [3] Paid $5.7 billion to nearly 840,000 retirees from more than 4,700 failed single-employer plans."
Pension Benefit Guaranty Corporation [PBGC]

Text of Arizona Supreme Court Opinion: Pension Formula for State Judges Vests Upon Employment; 2011 Legislative Changes Violate State Constitution (PDF)
"[T]he Bill's change to the benefit increases formula violates the Pension Clause because it 'diminishes and impairs' the employed members' pension benefits. The Bill's changes to the benefit increases formula and the contribution rate also violate our holding in Yeazell because the Legislature cannot unilaterally change the terms of the members' pension contracts once their rights to those terms have vested at the beginning of the members' employment." [Hon. Hall et al. v. EORP/State, No. CV2011-021234 (Az. Nov. 10, 2016)]
Supreme Court of the State of Arizona


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.

NASRA Issue Brief: State Hybrid Retirement Plans (PDF)
"[T]his brief examines two types [of hybrid plans] in use in the public sector. The first is a cash balance plan, which marries elements of traditional pensions with individual accounts into a single plan ... The second type combines a traditional DB plan, usually with a lower level of benefit accrual, with an individual [DC] retirement savings account ... Despite variability among these plans, most contain the core features known to promote retirement security: mandatory participation, shared financing between employers and employees, pooled assets invested by professionals, targeted income replacement with survivor and disability protection, and a benefit that cannot be outlived."
National Association of State Retirement Administrators [NASRA]

Retirement Benefits for Members of Congress (PDF)
20 pages. "Under both CSRS and FERS, Members of Congress are eligible for a pension at the age of 62 if they have completed at least five years of service. Members are eligible for a pension at age 50 if they have completed 20 years of service, or at any age after completing 25 years of service.... There were 620 retired Members of Congress receiving federal pensions based fully or in part on their congressional service as of October 1, 2015. Of this number, 344 had retired under CSRS and were receiving an average annual pension of $74,136. A total of 276 Members had retired with service under FERS and were receiving an average annual pension of $41,316 in 2015." [Report RL30631, dated Nov. 10, 2016.]
Congressional Research Service [CRS]

Cash Flow Required to Fund an Internal ESOP Note
"With an ESOP Note payment, the Company makes a contribution to the ESOP for the ESOP Note payment. The ESOP then makes the internal loan payment by transferring that money back to the Company.... [A] 2010 Technical Advice Memorandum states that this cannot be handled with a journal entry and cash must be transferred to facilitate the ESOP Note payments. What this means is that the ESOP Note payment schedule must be designed so that it does not conflict with cash necessary to make the Company Note payments or other cash flow requirements."
Blue Ridge ESOP Associates

2016 Annual Report to Congress on the Dodd-Frank Whistleblower Program (PDF)
40 pages. "The information and assistance provided by the 34 whistleblowers who received awards under the program led to successful SEC enforcement actions in which over $584 million in financial sanctions was ordered, including more than $346 million in disgorgement of ill-gotten gains and interest. Not only has the whistleblower program provided whistleblowers with protections and financial rewards, but it has also bolstered the agency's enforcement efforts and aided harmed investors."
U.S. Securities and Exchange Commission [SEC]

Comments of American Academy of Actuaries to NAIC on Exposure of Proposed Changes to Actuarial Guideline 43 and C-3 Phase II for Variable Annuities (PDF)
"Acceptance of any proposal should be based on whether the proposal will remove incentives for companies to use captives for their variable annuity business. It should be verified through testing that none of the proposals add conservatism beyond that required for statutory reserves, since such provisions will continue to provide these incentives.... [S]everal additional areas in the proposal ... require regulatory approval."
Variable Annuities Issues Working Group, American Academy of Actuaries


Modernizing Multiemployer Pensions
"By providing trustees important flexibility to manage the composite plan effectively and responsibly, the proposal will help provide workers a stable, secure annuitized benefit when they retire.... [By] including strict funding requirements that will ensure composite plans are responsibly managed, the proposal will provide retirees greater certainty and financial stability for the years ahead."
Committee on Education and the Workforce, U.S. House of Representatives


Too Underfunded for MPRA?
"[T]he new administration will have to come to grips with the United Mine Workers of America 1974 Pension Plan, whose $4.1 billion in assets and $9.7 billion in liabilities makes it too severely underfunded to qualify for MPRA reductions.... About $2.3 billion out of the $3.8 billion that the plan supposedly had in assets as of June 30, 2015 was a guess."

Benefits in General

2016 Year-End Compliance Checklist for Retirement and Group Health Plans (PDF)
"With the results of the Presidential election just behind us, it is likely that the landscape of employee benefit plans -- and the regulations that govern them -- will change. For the time being, however, there are still some important compliance deadlines quickly approaching, so [this 3-page chart reminds] plan sponsors of these key compliance actions as 2016 comes to a close[.]"
Fulcrum Partners, LLC

Press Releases

Karen Morris Appointed PBGC Chief of Negotiations and Restructuring
PBGC [Pension Benefit Guaranty Corporation]

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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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