Retirement Plans Newsletter

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Employee Benefits Jobs

DC Administrator
Retirement Systems of Arizona
in AZ, IN, OH

Plan Administrator
My Benefits, LLC & First Party Administrator, LLC
in GA, Telecommute

401(k) Plan Administrator
Growing Third Party Administrator
in NJ, NY

Account Management Specialist
Securian Financial Group
in MN

Director of Business Development, Qualified Plans
PGR Solutions, LLC - Retirement Plan Services
in CA, Telecommute

401k Relationship Administrator
Retirement Direct
in NC

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Webcasts and Conferences

Ethics for TPAs and Other Professionals
December 15, 2016 WEBCAST
Western Pension & Benefits Council

Institute for Apprenticeship, Training and Education Programs
January 16, 2017 in CA
International Foundation of Employee Benefit Plans [IFEBP]

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[Guidance Overview]

PBGC Offers Relief from Late Premium Payment Penalties
"The first reduction under the new regulations cuts the penalty percentages and caps in half. Going forward, the penalty for a self-corrected late payment is 0.5% per month, subject to a 25% cap. After the PBGC issues a notice of underpayment, the penalty increases to 2.5% per month, subject to a 50% cap. The second penalty reduction is a 'good citizen' waiver of sorts."
Morgan Lewis


Trustees and Administrators Institutes

Sponsored by International Foundation of Employee Benefit Plans [IFEBP]

Three days left to save $300 Attend the Trustees and Administrators Institutes to receive timely, relevant and balanced education on the issues that face the benefits industry including the opioid crisis, the future of ACA and DOL audits.

Supreme Court Grants Certiorari to Decide Meaning of Church Plan Exemption Under ERISA
"The IRS and [DOL] have issued hundreds of rulings since the ERISA amendments in question were adopted in 1980 validating the church plan status of religious organizations. The Solicitor General has yet to take a position on the issue in the Supreme Court, leaving questions whether there might be a shift in governmental policy and administration. Briefing will likely be completed in March 2017, with oral argument to follow, and a decision by the end of the Court's term in June."
Stradley Ronon Stevens & Young, LLP

2016 Pension Accounting Preview: A Positive Outlook
"Many [DB] plan sponsors are aware that interest rates dropped significantly in the first half of 2016 but staged a remarkable rise since the November election. Combined with relatively strong equity returns, 2016 year-end pension disclosures may not be as bad as expected 6 to 8 weeks ago."
Van Iwaarden Associates

ERISA Liability from 401(k) Plan Revenue Sharing
"City National ... [argued] that its administrative fees were reasonable, because they were lower than those of one outside vendor from which it solicited a quote. The court rejected this argument, stating that ERISA's fiduciary duties are the 'highest known to the law' and that a 'prudent fiduciary would have done more.' ... [E]mployers should periodically monitor revenue sharing fees to satisfy themselves that they remain reasonable, or alternatively, consider periodically shopping 401(k) plan administration or record keeping services to compare costs."
Weil Gotshal & Manges LLP

Impact Investing: What Role for Defined Contribution Plans? (PDF)
"Impact investments can be viewed as an offshoot of socially responsible investing (SRI) and have the stated intent of delivering measurable social impact, as opposed to the traditional SRI approach of avoiding and selling out of businesses that negatively impact the social good.... [W]hile impact investing is a trend that deserves continued close monitoring -- with some estimating the potential for it to be a trillion dollar market by 2020 -- there are meaningful barriers that are limiting its role within ERISA defined contribution plans."


Recognizing Excellence in Retirement Plan Education and Communication

Sponsored by Plan Sponsor Council of America [PSCA]

Don't miss out on recognition for your hard work! Deadline to submit retirement plan education and communication programs: Feb. 10, 2017. Learn more. Winners will be announced at the 70th Annual National Conference May 2-3, 2017 in Chicago, IL.

Target Date Fund Managers Evolve to Capture Burgeoning 401(k) Market
"Over the last several years, TDF managers have engaged in a marketing bonanza of new products to stand out in an increasingly competitive -- and lucrative -- 401(k) marketplace. Examples of such activity include providers launching funds with different investment strategies, investment vehicles and asset allocations, as well as coupling existing strategies with more passive management to drive down cost."

The United Kingdom's New Automatic Retirement Savings Program (PDF)
20 pages. "In 2001, the U.K. required all employers with five or more employees to offer pension plans to their employees, but employers were neither required to contribute to those plans nor were employees automatically enrolled in a plan. Going a step further, starting in October 2012, the U.K. launched a new retirement savings program that is designed to expand pension coverage while maintaining a minimum level of contributions.... This paper [provides] the first detailed analysis for an American audience ... on the progress of the U.K.'s retirement policy initiative[.]"
National Institute on Retirement Security [NIRS]

RMDs When You Move Money from an Employer Plan to an IRA
"There are only three instances when you have to adjust an IRA balance before calculating an RMD. [1] Outstanding rollovers or transfers ... [2] Roth recharacterizations done the year after the conversion ... [3] Return of an excess QLAC contribution."
Slott Report

Chicago Pension Reform Bills Stall as State Legislature Adjourns; Lame-Duck Vote Possible
"The measure was approved by the House by a 91-16 vote on Dec. 1, the final day of the fall session. There is still an opportunity for a final Senate vote as Illinois lawmakers are expected to reconvene in early January for a lame-duck session. The bill is intended to improve the pension fund's funding ratios through increased city contributions and raised contributions for certain employees."
Pensions & Investments

Dallas Mayor Sues Pension Board to Stop Withdrawals
"Dallas Mayor Michael S. Rawlings ... filed the lawsuit Dec. 5 in state court in Dallas in his personal capacity. He seeks a court order to temporarily restrict all withdrawals from the pension system's Deferred Retirement Option Plan (DROP) as 2016 outflows allegedly have greatly reduced the system's protected benefits. DROP is a program that allows eligible participants to simultaneously stay on the job with full pay while having their full retirement annuity paid into an interest-bearing account."
Bloomberg BNA


DCIIA Comments to EBSA on Annual Reporting and Disclosure Proposed Rule (PDF)
"DCIIA supports the Department's efforts to synchronize Form 5500 data elements with the fee disclosure requirements under ERISA ... Effective synchronization would make data collection more efficient, but, more importantly, it could reinforce for plan fiduciaries what to focus on when analyzing plan fees.... In addition to the importance of not adding burdens and cost to the process, we also encourage the Department to consider the impact of its Proposal on plan sponsor behavior so that it does not unintentionally inhibit innovations and decisions that benefit retirement savers."
Defined Contribution Institutional Investment Association [DCIIA]

Benefits in General

2016 Retirement Confidence Survey of the State and Local Government Workforce (PDF)
25 pages. "One-third of public sector employees have been with their current employer for less than 10 years, and one-third for 20 years or longer.... Health insurance, retirement benefits, job security and salary are the most important job elements they would consider in deciding whether to switch employers. The vast majority are covered by a primary defined benefit pension plan; almost 20 percent of these workers reported changes to these benefits over the past two years. Two-thirds expect to receive retiree healthcare benefits from an employer when they retire; among these, one-quarter reported changes to their benefits over the past two years."
TIAA Institute, and the Center for State and Local Government Excellence


American Benefits Council Comments to EBSA on Proposed Revision of Form 5500 Annual Information Return/Reports
33 pages. "[S]ome of the Proposed Revisions will create significant administrative burdens for employee benefit plan sponsors and service providers, unnecessarily increase the cost of operating employee benefit plans, and reduce the appeal of plan sponsorship. Further, ... many of the Proposed Revisions would require plan administrators, under penalty of perjury, to answer questions for which they do not have readily available information.... [We] urge the Agencies to withdraw their Proposed Revisions and repropose the Form 5500 overhaul."
American Benefits Council


Changes to Form 5500 Open Up Employers to Litigation; Participants May See Increase in Fees
"ERIC asked for the current proposal to be withdrawn ... and if there must be changes, to take a less burdensome approach, including removing questions that would reveal confidential information.... The proposed changes to Schedule C will require employers to invest in developing new systems to collect, process and verify information. ERIC and the organizations are concerned that employers will be forced to pass that increase in cost on to plan participants and that participants may actually see their fees increase."
The ERISA Industry Committee [ERIC]

Executive Compensation and Nonqualified Plans

[Guidance Overview]

More Guidance on Section 409A
"[Chief Counsel Advice 201645012] is noteworthy because the IRS agreed that a 25% increase qualified as a materially greater amount, and thus deferred salary was subject to a substantial risk of forfeiture. The CCA may not be used or cited as precedent, but still gives good insight as to how the IRS might respond to similar facts and circumstances."
Winston & Strawn LLP

Press Releases

Kidder Advisers, LLC is Certified for Fiduciary Excellence
Centre for Fiduciary Excellence [CEFEX]

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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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