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Senior ESOP Professional - Consulting & Review
Blue Ridge ESOP Associates
in VA, Telecommute

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Heartland Consulting Group, Inc.
in KS, MO

401k Operations Supervisor
LT Trust
in CO

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Nationwide Financial
in WA

Defined Contribution Consultant
in PA

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[Official Guidance]

Text of IRS Notice 2017-01: Eligibility for Exemption from User Fee Requirement for Employee Plans Determination Letter Applications Filed on or After January 1, 2017 (PDF)
"[In] light of changes to the remedial amendment period rules set forth in Rev. Proc. 2016-37 ... the IRS will treat an application for a determination letter as being filed within a qualifying open remedial amendment period if the plan was first in existence no earlier than January 1 of the tenth calendar year preceding the year in which the application is filed (the 'ten-year rule').... [An] application that satisfies the requirements for the user fee exemption in Section 7528(b)(2)(B), but that does not meet the requirements for the ten-year rule ... may be filed without a user fee. However, the application must include a statement describing how the application satisfies the exemption under Section 7528(b)(2)(B)."
Internal Revenue Service [IRS]

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[Official Guidance]

Text of PBGC Interest Rate Update for First Quarter 2017: Allocation of Assets in Single-Employer Plans; Interest Assumptions for Valuing Benefits
"The first quarter 2017 interest assumptions under the allocation regulation will be 1.87 percent for the first 20 years following the valuation date and 2.37 percent thereafter. In comparison with the interest assumptions in effect for the fourth quarter of 2016, these interest assumptions represent no change in the select period (the period during which the select rate (the initial rate) applies), a decrease of 0.11 percent in the select rate, and a decrease of 0.30 percent in the ultimate rate (the final rate)."
Pension Benefit Guaranty Corporation [PBGC]

[Guidance Overview]

Puerto Rico Treasury Announces Key Benefit Plan Limits for 2017
"[A table in this article] lists the key 2017 limits specified in Circular Letter Num. 16-07, the corresponding 2016 limits, and the U.S. Internal Revenue Code sections that specify analogous limits.... [The] dual-qualified limits will apply to an individual who is a participant in multiple plans of an employer, for example, a U.S. qualified plan and a Puerto Rico qualified plan. Plans sponsored by the US government (such as the federal Thrift Savings Plan) are also considered dual-qualified."
Xerox HR Services

2017 Top Priorities for DC Plan Sponsors
"A retirement focus is no longer enough ... The role of employee student loan repayments ... The 'signals' of matching programs ... Managed account program needs review ... Target date funds -- still suitable? ... Understand plan participants and non-participants ... Delegation of fiduciary responsibilities ... Cyber risks abound ... Consider (reconsider) retirement income options ... Monitor the impact of the [DOL] fiduciary rule."

Employee Participation and Deferral Rates See Steady Increase; Participation up Five Percent Since 2010
"Nearly 90 percent of employees are eligible to participate in their employer's plan. Average percentage of eligible employees who participate in their plan is 87.6 percent. Company contributions average 4.7 percent of gross annual pay. Allocation to target-date funds increased to nearly 20 percent of assets. Roth 401(k)s are now allowed by 60 percent of plans. Automatic enrollment is offered in 57.5 percent of plans. More than half of plans that use Automatic Enrollment offer a default deferral rate higher than 3 percent of pay." [PSCA Annual Survey of Profit Sharing and 401(k) Plans]
Plan Sponsor Council of America [PSCA]


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A Close Look at 401(k) Plans, 2014 (PDF)
"Larger 401(k) plans tend to be more likely to have employer contributions, participant loans outstanding, and automatic enrollment.... 401(k) plans with automatic enrollment are more likely to have both employer contributions and participant loans outstanding than plans without automatic enrollment.... Mutual funds were the most common investment vehicle in 401(k) plans.... Target date funds have become more common in 401(k) plans since 2006.... Most 401(k) plans offered investment options that included investment options proprietary to the plan's recordkeeper, but proprietary investments accounted for a smaller share of total 401(k) assets."
BrightScope and Investment Company Institute [ICI]

28% of Americans Are Making This Avoidable Retirement Mistake
"Saving for retirement is hard enough without shooting yourself in the foot. Unfortunately, over a quarter of Americans are doing just that.... 28% of Americans have taken a withdrawal from their workplace retirement plan -- usually a 401(k). That's a big mistake. Here's why."
Motley Fool

Two More Victories for the Fiduciary Rule
"[R]egardless of the fiduciary rule's fate, the genie is already out of the bottle.... It will be hard for plan sponsors and in-house fiduciaries to justify relying on advice from advisers who are not fiduciaries, regardless of whether the law is changed. And it will not be so easy for entities that have already announced that they will take on a fiduciary role to backtrack and revert to non-fiduciary status. The landscape has already changed."
Cohen & Buckmann, P.C.

Hotel Giant Starwood Hit With 401(k) Fee Class Action
"The lawsuit ... seeks class treatment for more than 40,000 participants. Starwood, one of the world's largest hotel companies with upscale brands such as Westin and Sheraton, failed to ensure that fees charged to participants were reasonable, according to the lawsuit."
Bloomberg BNA

Joshua Gotbaum Picked to Chair Maryland Secure Choice Board
"Mr. Gotbaum, a Brookings Institution guest scholar and former executive director of the [PBGC], served on the Commission on Maryland Retirement Security and Savings that led to that state's Secure Choice program."
Pensions & Investments

CalPERS Votes to Expand Tobacco Investment Ban to External Managers and Affiliate Funds
"The Investment Committee [has] voted to remain divested from tobacco-related securities with respect to the internally managed public equity and debt portfolios of the Public Employees' Retirement Fund (PERF). In addition, the Committee has now broadened the tobacco investment restrictions to include the PERF's externally managed portfolios of publicly traded assets and the Affiliate Fund portfolios."

Benefits in General

[Guidance Overview]

Final DOL Disability Claims Regs Require Notice of Contractual Limitations Periods
"[A] benefit is a disability benefit subject to the disability claims regulations if a plan conditions the benefit's availability on a showing of disability (regardless of how the plan characterizes the benefit or whether the plan is a health or retirement plan).... [T]he final regulations: [1] Limit conflicts of interest by requiring independence and impartiality of plan decisionmakers. [2] Expand the content requirements for denial notices involving disability claims. [3] Provide claimants notice and an opportunity to respond prior to appeal-level denials based on new or additional evidence or rationales.... [4] Require that claims notices be provided in a culturally and linguistically appropriate manner."
Practical Law Company

[Guidance Overview]

DOL Issues Final Regs for Claims Procedure for Plans Providing Disability Benefits
"The keystone of the regulations ... is the requirement to allow the claimant to have the last word in the claims process and thus have the right to respond to adverse information developed during the claim appeal process.... The regulations are also intended to permit claimants to submit supporting evidence regardless of whether such evidence meets 'courtroom evidentiary standards.' "
DeBofsky & Associates, P.C.

[Guidance Overview]

ACA Facelift to Disability Claims Process Could Affect All Plans
"For insured disability plans, plan sponsors need to engage their insurance carriers in a discussion about how these procedures will apply to them and what changes are needed to the insurance contracts. Some insurers may be slow to adopt these new procedures, which could put plan sponsors in a difficult position. For self-funded disability plans, plan documents will need to be updated, and procedures put in place. For retirement plans, there are some decisions to make. Recall that the procedures only apply if a disability determination is required. One way to avoid this is to amend the definition of disability so that it relies on a determination by the Social Security Administration or the employer's long-term disability carrier. For defined contribution plans, this is likely to be the most expedient approach."
Benefits Bryan Cave

2017 Rates and Limits Guide
"This quick reference guide contains: [1] Summary of payroll tax limits; [2] Filing deadlines; [3] IRS standard mileage rates; [4] Summary of other limitations, including elective deferrals and benefits and contributions under qualified retirement plans; [5] ACA forms and deadlines."
Lindquist LLP

Press Releases

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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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