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November 29, 2016 logo logo
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Senior Defined Contribution Plan Administrator
Shore Tompkins Actuarial Resources, LLC
in IL

Employee Benefits Attorney
Wiggin and Dana LLP
in CT

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DOL Fiduciary Rule Upheld by Kansas Judge
"A Kansas judge sided with the [DOL] in the second court decision against plaintiffs challenging the controversial fiduciary rule. Judge Daniel Crabtree ... [rejected] plaintiff Market Synergy Group's request for a preliminary injunction stopping the rule. MSG did not meet the four-part standard needed to win an injunction, the judge wrote." [Market Synergy v. DOL, No. 16-4083 (D. Kans. Nov. 28, 2016)]


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Text of Enrolled Actuaries Pension Examination EA-2, Segment F, Fall 2016 (PDF)
108 pages. Complete text of exam dated Nov. 8, 2016, with answers, published online by IRS.
American Society of Pension Professionals & Actuaries [ASPPA]; Joint Board for the Enrollment of Actuaries [JBEA]; Society of Actuaries

$20 Billion Club Update
"We continue to await the first explicit reference to PBGC premiums affecting funding policy from a corporate officer at one of the [20 U.S.-listed corporations with the largest pension liabilities]. And it is clear that not every CFO is looking at the funding question from the same perspective.... With significant corporate restructuring activity and the wave of lump sum offers and pension annuity buyouts, references to pension-related settlement accounting have become more frequent in the past four years or so."
Russell Investments

Public Pension Funded Ratio Rises to 71.0% in Third Quarter (PDF)
"The estimated funded status of the 100 largest U.S. public pension plans improved by $48 billion from the end of June through the end of September ... The deficit fell to $1.338 trillion due to asset returns that outpaced their expected targets for the quarter. As of September 30, the funded ratio increased to 71.0%, up from 69.8% at the end of June."

Is It Simpler Than Obamacare? California's Retirement Savings Mandate
"The last time millions of Americans were signed up for a new government-mandated benefit program, it didn't go so well. The initial rollout of the [ACA], or Obamacare, resulted in broken websites, angry employers, and lots of confused consumers. Now five states, where one in five Americans lives, are attempting a similar feat, this time with retirement."

Five Things the DOL Wants You to Know About TDFs -- That You May Have Overlooked
"It's not just about fees and performance ... 'To' versus 'Through' matters ... Higher costs can be justifiable ... Custom TDFs could be viable alternatives ... You might have to 'break up the set'."
National Association of Plan Advisors [NAPA]

Target Date Fund Objectives Are Duplicitous So Objective-Based Investing Is Convoluted (PDF)
"What are the objectives for your target date fund? Good chance your fund provider has told you that they are to [1] replace pay and [2] manage longevity risk. But that's not what TDF providers say in their official documents, namely their prospectuses.... They read something like this boilerplate: 'Provide capital appreciation and current income consistent with its asset allocation.' "
Target Date Solutions

Why Trump Won't Rollback New Fiduciary Regulations
"Although DOL leadership is likely to be replaced, it is not a certainty that would happen in time to derail implementation. In addition, experts believe it is unlikely that the Trump administration would take office and immediately direct the DOL to halt the implementation process.... House and Senate debate on any issue may take a long time, even though both houses have a Republican majority.... It could be expected that a new DOL secretary may opt for less stringent enforcement of the regs. As time goes by, it is likely that guidance may be issued by a newly staffed DOL that is more business-friendly."
Lawton Retirement Plan Consultants


The Radical Fix for 401(k)s
"In 1980, adding a plan helped companies distinguish themselves when bidding for higher-salaried talent. The 401(k) was a fringe benefit, no more and no less. Nobody viewed 401(k)s as vehicles for the masses.... Burdening the company sponsor with fiduciary duties made sense back in the day, when 401(k)s were supplemental features and when there were relatively few such plans.... Today, things are very different. What was an option has now become a virtual requirement. That changes the equation."
John Rekenthaler, via Morningstar


A Boomtown at Risk: Austin's Mounting Public Pension Debt (PDF)
11 pages. "Austin owes nearly $1.8 billion in pension debt, and its pension plans do not have enough money to pay for nearly one third of the retirement benefits that workers have already earned."
Laura and John Arnold Foundation

Benefits in General

CBO Cost Estimate for S. 3470, the Miners Protection Act of 2016
"S. 3470 would authorize payments for health and pension benefits for certain retired or disabled coal miners and their eligible dependents.... CBO and the staff of the Joint Committee on Taxation (JCT) estimate that enacting the bill would reduce direct spending, on net, by $7 million and increase federal revenues by $67 million over the 2017-2026 period. Considering both the direct spending and revenue effects, we estimate that enacting S. 3470 would reduce budget deficits, on net, by $74 million over the 2017-2026 period."
Congressional Budget Office [CBO]

Efficient Compensation Design (PDF)
"The decline of the private pension system in the United States results from mismanagement of total compensation costs rather than from the benefit plans. Insufficient employer resources remain after Form W-2 direct compensation costs to fund pension and welfare benefits.... [H]ow to design an efficient compensation program [is] summarized [in this article]."
H.C. Foster & Company


AICPA Urges Changes to Employee Benefit Reporting Proposal
"In two comment letters sent to the DOL, the AICPA expressed support for many of the proposed changes but said some of them would create inconsistencies and confusion about the reporting requirements.... [T]he AICPA is concerned that plan sponsors may: [1] Pass on the additional expenses to plan participants. [2] Attempt to save costs by preparing forms on their own or choosing providers who have little or no experience. [3] Discontinue plan sponsorship or reduce the level of benefits provided."
Journal of Accountancy

Executive Compensation and Nonqualified Plans

Nasdaq and NYSE Provide Clarity for Equity Plan Amendments Increasing Share Withholding
"Employers that wish to implement increased share withholding will need to address some practical considerations. First, because share withholding is effectively a cash settlement of a portion of an equity award (with the cash being remitted directly to the applicable taxing authorities), any increase in share withholding will impose a greater demand on the employer's cash resources.... Second, employers that want to implement increased share withholding will need to revise their payroll processes."
Pepper Hamilton LLP

Press Releases

Clear Financial Advisors is Certified for Fiduciary Excellence
Centre for Fiduciary Excellence [CEFEX]

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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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