Retirement Plans Newsletter

January 12, 2017 logo logo
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Webcasts and Conferences

HSAs, HRAs and Consumer-Driven Health Care
Thomson Reuters / EBIA

New Fiduciary Rules: What Do You Need to Know and Do Now?
January 31, 2017 WEBCAST
Investment Management Consultants Association [IMCA]

5 Steps for Selecting and Monitoring Investment Advisors
February 21, 2017 WEBCAST
Fiduciary Supply Management Association [FSMA]

Investments Institute
March 13, 2017 in AZ
International Foundation of Employee Benefit Plans [IFEBP]

Palm Beach 2017 Compliance Conference
June 21, 2017 in FL
NCS Regulatory Compliance

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[Guidance Overview]

DOL Clarifies Fiduciary Standards on Proxy Voting and Investment Policies (PDF)
"In response to concerns that prior guidance has unduly discouraged fiduciaries from exercising shareholder rights, the DOL issued guidance clarifying fiduciary duties on proxy voting and investment policy statements. The guidance also reiterates DOL's acceptance of applying environmental, social and governance policies to investment strategies. Plan fiduciaries wishing to increase shareholder engagement have room under this guidance to do so."


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IRS Proposes New Mortality Rates (PDF)
"The proposed regulations would increase funding requirements and PBGC premiums beginning in 2018 for single-employer plans. In addition, the regulations would likely result in higher single sum distributions which primarily impact plans with lump sum distribution options. The direct impact on multiemployer and governmental pension plans is minimal; however, the new mortality rates will put additional pressure on these plan sponsors to ensure the mortality rates used for funding and accounting purposes are best estimate assumptions."
Ekon Benefits

Controlled Group Liability Early Warning Program, Premiums, and Other PBGC Developments Affecting Plan Sponsors (PDF)
"This memo provides a summary of [1] a recent court decision rejecting PBGC's attempts to expand the types of entities liable for termination liabilities, [2] PBGC's recent guidance on its Early Warning Program, [3] the Participant and Plan Sponsor Advocate's 2016 report, and [4] changes to the premium filing instructions."
Groom Law Group

Positive Thoughts on DB Plans for 2017 (PDF)
"Why DBPs are the least-cost means to funding retirement benefits ... Employees have retirement income assurances ... DBPs same as Social Security retirement benefits ... DBP participants understand their benefit plans ... DBPs reduce employers' compensation costs ... Why the number of DBPs declines."
H.C. Foster & Company

How Long Do U.S. Retirees Live Compared to Peers in Other Countries?
"If you're an American retiree worried about outliving your savings, you may have an (unwanted) edge compared to retirees in other countries: U.S. retirees are expected to live shorter lives on average compared to citizens of most other developed nations.... [T]he U.S. ranks last or near last -- depending on the group being analyzed -- in one measure of life expectancy ... remaining life expectancy at age 65."
CBS MoneyWatch


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Business Group Seeks End to Required Minimum Distributions from 401(k) Plans
"The U.S. Chamber of Commerce will be urging Congress this year to end minimum payout requirements from 401(k)s and IRAs ... The effort, along with an effort to spur multiple employer retirement plans, is part of a legislative roadmap for retirement benefits the chamber will roll out February 3 ... [T]he roadmap will be based on a retirement policy white paper prepared for President-elect Donald Trump's transition team."
Financial Advisor

Understanding the Internal Controls Needed by a Retirement Plan
"Reviewing controls helps auditors understand the processes in place to administer each retirement plan and design the audit strategy to address any identified control weaknesses. Controls at the plan sponsor are important because they may help prevent mistakes in plan administration."
Belfint Lyons & Shuman, CPAs

Small Companies Have a Big Retirement Problem
"At companies with fewer than 50 workers, not even half the employees have access to a 401(k) or pension ... Companies with fewer than 100 workers employ 36 percent of the U.S. workforce, or about 42 million people. Even when small companies do have a retirement plan, it is likely to be astronomically more expensive than those offered by large companies.... Five states are in the midst of shaping bold plans to change all this."

Results of PSCA 2016 Survey of Fiduciary Awareness of 403(b) Plan Sponsors
10 pages. "PSCA's [survey] reflects responses from 281 not-for-profit organizations that currently sponsor a 403(b) plan." 10 tables: [1] Respondent demographics by organization size and ERISA status; [2] Respondents by industry type; [3] Number of plan providers used, by plan size; [4] Approximate plan asset size of respondents fiduciary responsibilities; [5] Percentage of respondents who view themselves or their organization's Investment Committee as a plan fiduciary; [6] Entities other than the plan sponsor that act as plan fiduciaries; [7] Percentage of respondent aware of the recently released DOL Conflict of Interest Rule; [8] Changes made or considering in light of the new DOL Rule; [9] Entities relied on in making investment line-up decisions; [10] Percentage of organizations offering, or planning to offer, investment decision assistance to participants.
Plan Sponsor Council of America [PSCA]


Techniques to Enhance Your 401(k) Plans

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Jan. 31 webinar. Fiduciary process and techniques of automatic enrollment, auto escalation, re-enrollment, Qualified Default Investment Alternatives, hiring and monitoring of service providers, benchmarking, investment due diligence, regulatory issues.

Why Fiduciary Advisors Will Profit Without a Fiduciary Rule
"[C]onsumers would be better off if the fiduciary rule survived, a stance most fee-only advisors support. None are calling for its demise.... But in light of a likely repeal, independent advisors who have long lived by a fiduciary standard believe they stand to gain. The reason: In pushing through the fiduciary rule, the DOL blurred the line separating sales and commission-based advisors."
Institutional Investor

Consumers Welcome Robo-Advice for Banking, Insurance and Retirement Services
"Consumers are now open to robo-advice to help determine which bank account to open (71 percent), which insurance coverage to purchase (74 percent), and how to plan for retirement (68 percent).... However ... nearly two-thirds of consumers still want human interaction in financial services, especially to deal with complaints (68 percent) and advice about complex products such as mortgages (61 percent)."

NCPERS Public Retirement Systems Study, 2016 (PDF)
39 pages. "Responding funds report the total cost of administering their funds and paying investment managers is 56 basis points ... a decrease of four basis point from 2015.... Almost 40 percent of responding funds have lowered their actuarial assumed rate of return, and nearly an additional 30 percent are considering lowering in the future.... Aggregated 10-year returns are reported at 6.2 percent.... The aggregated average funded level is 76.2, up from 74.1 in 2015 and 71.5 in 2014."
National Conference on Public Employee Retirement Systems [NCPERS]

Military Retirement: Background and Recent Developments (PDF)
24 pages. "[T]he National Defense Authorization Act for FY2016 [adopted a] blended system [which] will allow more service members to accrue retirement savings earlier in their careers through contributions into the Thrift Savings Plan (TSP) coupled with government matching ... It will also reduce the defined benefit multiplier for calculating the retirement annuity ... The new multiplier will provide service members retiring at 20 years of service with 40% of their base pay at retirement rather than 50% under the current system. The changes will go into effect on January 1, 2018." [Report RL34751, Jan. 6, 2017]
Congressional Research Service [CRS]

Benefits in General

[Guidance Overview]

DOL Finalizes Disability Claims Procedure Rules (PDF)
"The DOL has finalized regulations that will change the procedures ERISA plans must follow in adjudicating claims for benefits conditioned on a determination of disability, including claims for disability retirement benefits. The final rules, which generally follow the proposed regulations, add a requirement that notices of an adverse benefit determination on review set out specific information about plan-mandated deadlines for bringing lawsuits under ERISA."

Executive Compensation and Nonqualified Plans

[Guidance Overview]

January 31 Reporting Deadlines for Exercises of ISOs and Transfers of Stock Acquired under Employee Stock Purchase Plans
"IRS Form 3921 is used for the reporting of exercises of incentive stock options.... The deadline for furnishing Form 3921 to an employee (or former employee) who exercised an ISO in 2016 is January 31, 2017.... IRS Form 3922 is used for the reporting of initial transfers of stock acquired by an employee (or former employee) pursuant to the terms of an ESPP.... The deadline for furnishing Form 3922 to an employee for an initial transfer of stock in 2016 that was acquired pursuant to an ESPP is January 31, 2017."
Andrews Kurth

Sustained, Consistent Performance Continues to Drive Long-Term Incentive Plan Design
"Most companies are embracing performance-based LTI plans that meet five primary objectives: [1] Retain key employees; [2] Link rewards to organization success over a multiyear period; [3] Align reward program with shareholder expectations; [4] Provide wealth accumulation opportunities; [5] Deliver market-competitive total compensation."
Willis Towers Watson

Press Releases

CalPERS Names Scott Terando Chief Actuary
CalPERS [California Public Employees' Retirement System]

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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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