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[Guidance Overview]
DOL Announces New Guidance on Proxy Voting (PDF)
"IB 16-01 does not significantly change many of the long-standing rules for voting proxies, but it may remove some of the perceived obstacles. It also makes clear that plan fiduciaries should still ensure that issues voted on a re likely to enhance the value of the plan's investment and that the plan fiduciary would not be viewed as subordinating the economic interests for unrelated objectives."
Groom Law Group
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[Guidance Overview]
DOL Revisits, Relaxes Retirement Plan Proxy Voting Guidance
"[T]he pendulum appears to have swung back in a direction of greater flexibility for fiduciaries that may want to consider investment factors other than pure return on investment; flexibility not only in the selecting of investments, but in using the power of their proxies."
Ascensus
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[Guidance Overview]
Missing Participants: Gone But Not Forgotten
"On September 20, 2016, the PBGC issued proposed regulations expanding its missing participants program ... Certain modifications made in the proposed PBGC regulations may help further guide plan sponsors of ongoing plans on how to deal with missing participants. Though the current and proposed guidance applies only to terminated plans, it would seem prudent from a fiduciary standpoint to rely on similar principles, where applicable, when faced with missing participants in ongoing plans."
Trucker Huss
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Does ERISA Let a Fiduciary Seek Indemnification? Supreme Court Wants DOL Input
"The justices on Jan. 9 invited the solicitor general to file a brief expressing the government's views on a petition filed by trustee David B. Fenkell, who was found liable for his role in a series of complex transactions between the ESOPs of Alliance Holdings Inc. and Trachte Building Systems Inc. Fenkell asked the justices to rule that [ERISA] doesn't allow plan fiduciaries to sue other fiduciaries for indemnification or contribution.... Fenkell's petition raises a matter that has divided the federal appellate courts: whether ERISA permits a court to order one at-fault fiduciary to indemnify another at-fault fiduciary for its liability." [Chesemore et al. v. Fenkell v. Alliance Holdings, Inc., Nos. 14-3181, 14-3215, 15-3740 (7th Cir. July 21, 2016)]
Bloomberg BNA
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Proposed Mortality Table Updates Slated for 2018
"The IRS has released proposed regulations on applicable mortality tables to be used by defined benefit plans subject to ERISA to determine minimum funding requirements beginning with 2018 plan years.... Tables reflecting static projections of longevity improvement would still be permitted, as would combined annuitant/nonannuitant (small plan) versions of the tables. Updated rules for substitute, plan-specific mortality tables are also proposed, which would permit the use of tables reflecting partially credible experience for plans that are too small to have fully credible experience."
Conduent
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[Advert.]
2017 SPARK National Conference -- June 1-2, National Harbor, MD
The retirement services industry's leading event for top marketing, sales, administration and record keeping professionals. Comprehensive agenda is designed to meet the needs of 401(k) Plan Providers, Financial Advisors and Third Party Administrators.
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Retirement Plans Comparison Table for Small Businesses, 2017 Plan Year
"This table provides a comparison of the features and benefits that apply to retirement plans that can be sponsored/adopted by small business owners. Focus is on the areas that are important to the business owner, so as to help ensure that the plan that is chosen is the plan that is most suitable for the business. Plans covered: SEP IRAs; SIMPLE IRAs; 401(k)s; Solo 401(k) / Individual-K; Profit Sharing; Money Purchase Pension; Defined Benefit Pension."
Appleby Retirement Dictionary
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401(k) Plan Improvements: Six Changes to Consider in 2017
"[1] Financial wellness education ... [2] The right investment advisor ... [3] A guaranteed rate or stable value option ... [4] Participant investment advice ... [5] Full automation ... [6] At least one balanced investment option."
Lawton Retirement Plan Consultants
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GAO Report: Improved Guidance Could Help Account Owners Understand the Risks of Investing in Unconventional Assets
"GAO examined: [1] what is known about the prevalence of accounts that invest in unconventional assets; [2] how these accounts are managed; and [3] what challenges are associated with administering these retirement accounts.... GAO is making three recommendations to the [IRS] to, among other things, improve guidance for account owners with unconventional assets on monitoring for ongoing federal tax liability and to clarify how to determine the fair market value of hard-to-value unconventional assets." [GAO-17-102, published Dec. 8, 2016, released Jan. 9, 2017]
U.S. Government Accountability Office [GAO]
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Using Interactive 'Nutrition Labels' for Financial Products to Assist Decision Making for Long-term Saving (PDF)
29 pages. "[The authors] developed an interactive information label to assist consumers with retirement saving decision-making.... 450 users [were exposed] to one of four user interface conditions in a retirement saving simulator where they made 35 yearly decisions under changing circumstances. [The authors] found significantly better ability of users to reach their goals with the information label. Furthermore, users who interacted with the label made better decisions than those who were presented with a static information label. Lastly, [they] found the label particularly effective in helping novice savers."
Junius Gunaratne and Oded Nov, New York University
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Innovation in Participant Education
"[O]nly 12% of approximately 1,500 respondents indicated that they accessed educational content on their participant site in the past 12 months; however, 43% said educational articles and 39% said education videos about retirement planning and investing were either extremely or very important elements of a participant site.... 65% stated having access to a retirement income projection tool is at least 'very important,' despite only 23% having used one in the previous 12 months. This disparity may point to a lack of engagement with the plan, and therefore a lack of awareness that these resources exist for free on the participant site. It likely also points to a lack of engaging educational content[.]"
Corporate Insight
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Boosting Worker Retirement Savings Rates to be Primary Focus for U.S. Employers in 2017
"Despite strong participation in employer-sponsored 401(k) plans, few employers (15 percent) are satisfied with their workers' current savings rates ... While financial wellbeing has been a growing trend among employers recently, most employers (60 percent) feel its importance has increased over the past two years.... Currently, 58 percent of employers have a tool available that covers at least one aspect of financial wellbeing, but by the end of the year, that percentage is expected to reach 84 percent[.]"
Aon Hewitt
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Just Say 'Ask TD Ameritrade' -- Investment Firms Launch Apps for Amazon Alexa
"While mobile apps and robo-advisors have been increasing trends among investment firms, TD Ameritrade is only the second to produce a ['skill,' an app that runs on Alexa-enabled Amazon devices] ... Fidelity launched a skill just in time for the holiday season of 2015, with two releases to increase usability this year.... The ease of access makes it a convenient way for investors to remain updated on the market while multi-tasking."
Corporate Insight
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Stability in Percentage of Multiemployer Plans in the Green Zone (PDF)
"[A] majority of multiemployer plans -- 64 percent -- are in the green zone.... The average Pension Protection Act of 2006 funded percentage has also remained stable: 86 percent for zone certifications filed in the 12-month period ending on September 30, 2016 compared to 87 percent for the 12-month period ending on September 30, 2015. The percentage of plans in the red zone is 25 percent, with 10 percent of all plans certified as 'critical and declining.' ... These results are similar to the prior 12-month period."
Segal Consulting
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Benefits in General
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Fortune 1000 Companies: Accounting for Pensions and Other Postretirement Benefits, 2016
"At fiscal year-end (FYE) 2015, the average discount rate used to calculate the present value of pension obligations increased to 4.34%, compared to last year's rate of 3.98% for companies in this year's report. The salary scale assumption at FYE 2015 used to project current pay remained essentially unchanged at an average value of 3.60%. For companies in this year's report, the expected rate of return on asset assumptions decreased 18 basis points, down to 6.95% from FYE 2014 to FYE 2015."
Willis Towers Watson
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Executive Compensation and Nonqualified Plans
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Stock Compensation and the Secretary of State Nominee
"Incentive compensation awards for senior executives at ExxonMobil [where Secretary of State nominee Rex Tillerson currently is its CEO] are not paid out until 10 years after retirement and cannot be accelerated for any reason except death, a rare requirement that strongly encourages (or even forces) long-term alignment between shareholders and executives.... In exchange for the surrender and the cancellation of these grants, the company will make a cash payment into an irrevocable ethics-compliance trust equal to the value of the company stock under a market-based formula ... The trust also has an interesting type of clawback provision that will be triggered if Tillerson ever again works in the oil and gas industry while there are still undistributed funds in the trust."
myStockOptions.com
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Press Releases
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BenefitsLink.com, Inc.
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Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager
BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2017 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 those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.
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