Retirement Plans Newsletter

November 21, 2016

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Webcasts and Conferences

From Obamacare to Trumpcare: What to Expect from the Likely "Replace" Alternatives
November 29, 2016 WEBCAST
ABD Insurance & Financial Services

Voluntary Fiduciary Correction Program Workshop
December 6, 2016 in WA
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Designer Defenses: What You Can Do Today to Prevent Benefits Litigation Tomorrow
February 9, 2017 WEBCAST
Jackson Lewis LLP

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[Guidance Overview]

IRS Publication 4285: SEP Checklist (PDF)
Revised Nov. 2016. "Every year it's important that you review the requirements for operating your Simplified Employee Pension (SEP) plan. Use this checklist to help you keep your plan in compliance with many of the important rules. Click on '(More)' in any of the questions for additional information (including examples) on how to find, fix and avoid each mistake."
Internal Revenue Service [IRS]

[Guidance Overview]

Pension Plan Limitations and Other Applicable Limitations for 2017
"Many of the pension plan limitations were increased, as the increase in the cost-of-living index met the statutory limits that initiate their adjustment. However, some limitations remain unchanged. [This article provides] a summary of some of the limitations."
Trucker Huss

DOL Grants QPAM Exemptions for Five Money Managers
"Five money managers affiliated with banks convicted of currency price fixing won temporary exemptions to continue serving retirement fund clients ... [The DOL] granted the exemptions for money management units of Deutsche Bank, Citigroup, Barclays Capital, J.P. Morgan Chase and UBS, under certain conditions. The temporary one-year exemptions start from the date of each firm's criminal sentencing, which begins with UBS on Nov. 29. The [DOL] will take comments or hearing requests for 45 days after publication."
Pensions & Investments

Disney Fiduciaries Beat Lawsuit Over Valeant Stock in 401(k) Plan
"Judge Percy Anderson of the U.S. District Court for the Central District of California dismissed Nov. 14 the participants' lawsuit against the plan's investment committee and its members. The participants alleged no facts suggesting that the fiduciaries had any reason to investigate the prudence of continuing to include the Sequoia Fund -- a mutual fund that had steep losses in 2015 due to its high investments in Valeant's stock -- as one of the plan's investment options, Anderson said." [In Re Disney ERISA Litigation, No. 16-2251 (C.D. Cal. Nov. 14, 2016)]
Bloomberg BNA

Pension Lump Sums Are Likely to Be More Expensive in 2017
"Although many DB plans will likely use the November or December rates as their 2017 lump sum payment basis, the October rates are good indicators of what 2017 lump sum costs might look like. This [article] shares a brief update of the impact these rates could have on 2017 lump sum payout strategies.... [A table and chart] compare the November 2015 rate basis (used by most plans for 2016 lump sums) to the October 2016 basis."
Van Iwaarden Associates

[Advert.]

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Catch up on the latest industry trends and topics while gaining up to 7.5 hours of CE? Hear from and interact with five of the industry's top thought leaders: Ilene H. Ferenczy, Brian Graff, Craig Hoffman, Bob Kaplan, and Adam Pozek.


Simplifying Retirement Planning Communications
"While investment uncertainty is, by its nature, something we all face, it is always prudent to gauge risks ahead of time, to the extent possible. Employers and policy-makers who want to help others improve their financial literacy can contribute in multiple ways."
Pension Risk Matters

Another Year After the Current Population Survey Redesign: More Questions About the Survey's Retirement Plan Participation Estimates
"The Census Bureau conducted a redesign of the CPS questionnaire in 2014 on the income questions that resulted in much lower estimates of the percentages of workers who participate in an employment-based retirement plan.... This translates into more than 9 million fewer individuals participating in an employment-based retirement plan. The groups of workers most affected were those with the highest likelihoods of participation -- older, higher earners, and employees of larger employers.... The estimates from the most recent surveys could easily be misconstrued as an erosion in coverage, as opposed to an issue with the data."
Employee Benefit Research Institute [EBRI]

Who Doesn't Need to Take a 2016 RMD by December 31?
"You just reached 70-1/2 in 2016.... You are 'still-working' ... You have 'old money' ... You have invested in a QLAC.... You have a Roth IRA."
Slott Report

Using Multiple 'Data Points' to Determine How Much You Should Spend
"[While] the development of a reasonable spending budget is an important part of an individual's spending decision process, it is but one 'data point' of several that may be considered.... [O]ther possible data points that may also be useful in your spending decision process[:] Applying the ABC ... The ABC with recommended assumptions ... ABC run-out tabs ... ABC 5-year projection tab ... Historical record ... Your gut instinct."
Ken Steiner, FSA Retired

Comparing CBO's Long-Term Projections with Those of the Social Security Trustees (PDF)
32 presentation slides. "CBO's Projection of the 75-Year actuarial balance is larger than the Trustees' projection ... Two-thirds of the difference is explained by different projections of four major inputs ... Over the next 75 years, CBO projects, Social Security's outlays as a percentage of GDP will be higher, and revenues will be lower, than the Trustees project."
Congressional Budget Office [CBO]

CalPERS, CalSTRS Considering More Rate Increases
"The two systems are still seriously underfunded, CalPERS at 68 percent and CalSTRS at 65 percent.... Both are nearing a time when there will be more retirees in the system than active workers.... [In] 1971 there were were six active workers in the [CalSTRS] system for every retiree. Today CalSTRS only has 1.5 active workers for every retiree, similar to the CalPERS ratio. A wave of baby boom retirees that began around 2011, and the continuing increase in the average life span of retirees, have added to the growing cost of paying pensions[.]"
Calpensions

[Opinion]

ARA Comment Letter to PBGC on Proposed Rules on Missing Participants (PDF)
"[The ARA recommends that] ... [1] for defined contribution plans, the 90-day deadline for filing with PBGC be extended to 180 days ... [1] the minimum missing distributee account balance to which a user fee would apply be increased from the proposed $250 threshold to $500 ... [3] the proposed instructions for reporting basis applicable to defined contribution plans should be extended to defined benefit plans ... [4] final regulations clarify the PBGC's position on a plan's use of default rollover provisions to provide benefits to missing participants after the decision has been made to terminate the plan.... [5] final regulations clarify whether a participant for whom benefits were previously forfeited due to the inability to locate the participant is to be treated as a missing participant upon plan termination."
American Society of Pension Professionals & Actuaries [ASPPA]

Benefits in General

DOL Receives Cybersecurity Suggestions, While Union Acknowledges Hack
"The [ERISA Advisory Council] boiled its recommendations down to: [1] making its report publicly available as soon as administratively feasible, and [2] providing information to the employee benefit plan community to educate them on cybersecurity risks and potential approaches for managing those risks."
Bloomberg BNA

Executive Compensation and Nonqualified Plans

The Election of Donald J. Trump: What it Means for Executive Pay
"SEC will refrain from further significant rulemaking on executive pay mandates until Dodd-Frank is retooled or replaced. Complete repeal of Dodd-Frank and all of its executive pay mandates is highly unlikely. The tug of war between deregulation and populism will influence which executive pay mandates fall. CEO pay ratio, mandatory recoupment policy and pay for performance have a 50% chance of repeal. For now, companies should assume requirements regarding the CEO pay ratio will remain."
Meridian Compensation Partners, LLC

Press Releases

WTIA Launches Multiple Employer 401k Plan
Washington Technology Industry Association [WTIA]

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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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