Retirement Plans Newsletter

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Employee Benefits Jobs

Pension Actuary
TPA Firm
in AZ, Telecommute

Senior Consultant, Defined Contribution
Aon Hewitt Investment Consulting
in AK, AL, AR, AZ, CA, CO, CT, DC, DE, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MI, MN, MO, MS, MT, NC, ND, NE, NH, NJ, NM, NV, NY, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV, WY

Retirement Plan Administrator
Warren Averett, LLC.
in AL, FL

Sr. Retirement Plan Consultant
The Meltzer Group
in MD

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[Guidance Overview]

DOL Issues Interpretive Bulletin 2016-1 on Voting of Proxies on Securities Held in Employee Benefit Plan Investment Portfolios
"According to the DOL, when proxy voting involves high costs or unusual requirements, the plan fiduciary should: [1] Consider whether the plan's vote, either by itself or together with the votes of other shareholders, is expected to have an effect on the value of the plan's investment that warrants the additional cost of voting. [2] When deciding whether to purchase shares, consider whether the difficulty and expense in voting the shares is reflected in their market price."
Practical Law Company


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[Guidance Overview]

PBGC Expands Scope of Early Warning Program (PDF)
"Historically, Early Warning Program cases have been opened because of a specific transaction of concern to PBGC.... Under the new basis for possible action, an employer facing financial challenges may be surprised to find itself the target of an Early Warning Program investigation -- and possibly an Early Warning Program demand -- even in the absence of a specific transaction."
Keightley & Ashner LLP, via Bloomberg BNA Pension & Benefits Daily

[Guidance Overview]

PR Treasury Issues New Rules and Procedures for Qualification of Retirement Plans
"Circular Letter of Tax Policy (CLTP) 16-08 repeals and leaves without effect most of the guidance provided by Circular Letters of Internal Revenue No. 11-10 of December 16, 2011 and No. 13-02 of May 28, 2013, except certain rules regarding the qualification of retirement plans covering Puerto Rico employees on January 1, 2011.... CLTP 16-08 provides a new list of Qualification Amendments that will require a plan to seek for a new qualification letter.... The application for a qualification letter must now include [certain] additional items of information: ... CLTP 16-08 changes the deadline to request qualification letters."
McConnell Valdes

Leasing Property Isn't 'Automatic' Trade or Business for PBGC Liability; Asset Purchasers Generally Not Liable Either
"[The court] clarified the definition of 'trade or business,' and distinguished the statutory schemes for withdrawal liability for multiemployer plans and termination liability for single-employer plans. The court held that PBGC could not collect single-employer termination liabilities from [1] an irrevocable trust established by the founder of Findlay Industries, Inc. because the trust was not a 'trade or business,' or [2] companies that purchased assets from Findlay." [PBGC v. Findlay Industries, Inc., No. 15-1421 (N.D. Ohio Dec. 29, 2016)]
Reed Smith LLP

Reasonable Fees: Who's Responsible? (PDF)
"All of the exemptions require that the advisor -- and often the Financial Institution -- not receive unreasonable compensation. For plans, this creates a dual obligation to make sure that compensation is reasonable. The plan sponsor retains the ERISA obligation ... and the advisor and financial institution have a new obligation under the various exemptions."
Drinker Biddle, for Fiduciary Benchmarks


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Traits of the Best Small Business 401(k) Providers
"They treat 401k plans like a service, not a product ... They don't make promises they can't keep ... They don't just ask for your trust; they earn it ... Their fees match their value."
Employee Fiduciary

Top 10 Employee Benefits New Year's Resolutions for 2017
"[1] Fiduciary, Know Thyself.... [2] Look over your service providers' shoulders.... [3] Resolve to improve your plan governance.... [4] Wrap yourself in the protective cloak of procedurally prudent process.... [5] And add a protective layer of fiduciary insurance.... [6] Calendar reporting and disclosure requirements.... [7] Keep an eye on Twitter (yes, really).... [8] Or at least keep an eye on D.C. ... [9] Keep the other eye on the courts, particularly on fee litigation.... [10] And if you have one eye left, keep it on government enforcement action."
Benefits Bryan Cave

A Guide to Commonly Used Defined Contribution Plan Investment Vehicles (PDF)
21 presentation slides. Topics: [1] Overview of the current landscape; [2] Vehicle allocations by plan size, 2013; [3] Vehicle allocations by year, 2009-2013; [3] Common misperceptions; [4] Comparative table; [5] Considerations for decision-making; [6] Mutual funds; [7] Collective investment trusts; [8] Separate accounts; [9] Fund of funds; [10] Service provider requirements; and [10] Looking ahead.
Defined Contribution Institutional Investment Association [DCIIA]

Puerto Rico Catholic School Teachers Win Round in Pension Suit
"The main issue in the case is whether the Catholic schools' pension plan is subject to [ERISA] or exempt from the federal law as a church plan.... [The federal district magistrate judge], in his report and recommendation, relied on three cases by the U.S. court of appeals for the Third, Seventh and Ninth circuits. Those cases, and dozens of others pending in federal courts throughout the U.S., have challenged hospitals that treat their pension plans as church plans. The Puerto Rico lawsuit appears to be the only one that challenges a school system using ERISA's church plan exemption."
Bloomberg BNA

How Public Pension Plan Investment Risk Affects Funding and Contribution Risk (PDF)
"[The authors] modeled the finances of [a] prototypical pension fund over thirty years, assuming that employers pay full actuarially determined contributions.... [P]lans faced a fundamental trade-off ... If they moved into riskier assets, the risk to the pension fund would increase significantly but government contributions would remain low.... If instead ... the plan lowered assumed investment returns, the risk to the pension fund would remain minimal, but employer contributions would have to triple, and would stay high for all thirty years of the simulation period."
Rockefeller Institute of Government

Squaring-the-Survival-Curve and Retirement Planning
"[W]hile overall life expectancies have been rising, most of the gains are attributable to people living closer to the maximum human lifespan (rising up towards about 115 years), and not as much from increases in the maximum age itself.... The significance ... is that retirement planning may need to adjust for a longer active phase of life... or more pessimistically, for prolonged periods of substandard health as what might have killed us in the past now simply slows us down!"
Michael Kitces in Nerd's Eye View

Benefits in General

Bankrupt CEO Owes $67,000 for Failing to Send Paycheck-Deducted Premiums to Health Insurer
"A company CEO could not avoid a $67,839 judgment through bankruptcy where it was undisputed that he directed the company to pay his personal expenses even though he knew that insurance premiums withheld from employee paychecks had not been remitted to the insurer, which had demanded payment by month's end or the plan would be canceled.... [The court] explained that the funds withheld from paychecks constituted a trust, that the CEO was a fiduciary with respect to the trust, and that he committed defalcation in directing the payment of his expenses rather than past due premiums." [In re Harris, No. 16-6024 (B.A.P. 8th Cir. Jan. 6, 2017)]
Wolters Kluwer

Executive Compensation and Nonqualified Plans

[Guidance Overview]

2017 Deadlines Approach to Furnish ISO and Employee Stock Purchase Plan Information Statements and Returns
"Section 6039 of the Internal Revenue Code requires a corporation to furnish a written statement to any employee or former employee who either [1] exercised an incentive stock option within the meaning of Section 422 of the Code (ISO) during 2016 or [2] during 2016 first transferred legal title to shares acquired under the corporation's employee stock purchase plan within the meaning of Section 423 of the Code (ESPP). This requirement applies to both privately held and publicly traded corporations. The corporation must furnish these statements on Forms 3921 and 3922 no later than January 31, 2017."
DLA Piper

Press Releases

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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2017, 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 those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

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