Retirement Plans Newsletter

February 8, 2017 logo logo
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Employee Benefits Jobs

Webcasts and Conferences

Retirement Insights & Answers
February 14, 2017 WEBCAST
National Center for Employee Ownership [NCEO]

Retirement Plans: Steering the Fiduciary Ship
March 8, 2017 in PA
Morgan Lewis & Bockius LLP

Opioid Crisis: How Employers Can Help Employees and Their Families
March 29, 2017 in IL

Portfolio Concepts and Management
May 1, 2017 in PA
International Foundation of Employee Benefit Plans [IFEBP]

Institute & Expo 2017
June 7, 2017 in TX
America's Health Insurance Plans [AHIP]

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[Guidance Overview]

IRS Proposed Regs Provide That Plan Forfeitures May Be Used to Satisfy 401(k) Safe Harbor Requirements
"Under the proposed regulations, a plan sponsor's QNEC and QMAC contributions will be considered to satisfy the nonforfeitability and distributions requirements if they meet these requirements at the time they are allocated to a participant's account rather than when they were contributed to the plan. This will allow amounts being held as forfeitures in the plan to be used to satisfy failed ADP and/or ACP tests, which was not possible under the old rules."


The World of Retirement: PSCA's 70th Annual National Conference

Sponsored by Plan Sponsor Council of America [PSCA]

Through calm seas, rough waters, and uncharted territories, PSCA has been the flagship in the world of retirement benefits. Join us at PSCA's 70th Annual National Conference to learn the latest trends to help you navigate the changing landscape.

[Guidance Overview]

IRS Announces the Last Day of the Remedial Amendment Period for 403(b) Plans
"[T]he remedial amendment period is available only if an employer adopted a written plan document intended to satisfy the requirements of Code Section 403(b) on or before January 1, 2010 or, if later, the first day of the plan's effective date.... [If] the form of a Code Section 403(b) retirement plan does not satisfy the requirements of Code Section 403(b) during the remedial amendment period but is properly retroactively amended by March 31, 2020, the plan will be considered to have satisfied the requirements for the entire remedial amendment period[.]"
Proskauer's ERISA Practice Center

[Guidance Overview]

DOL Regs Permit Safe Harbor State-Run IRAs for Private-Sector Employees (PDF)
"States and Qualified Political Subdivisions (QPSs) may now offer an [IRA] plan to private-sector employees that do not have access to a workplace retirement plan, if established under state or QPS law.... Employers are required to participate in the plan but the employer's involvement must be limited and no employer contributions are permitted. Participation by employees is voluntary."
VOYA Financial

No 401(k)? No Problem. States Have You Covered.
"This July, Oregon will become the first state to offer a retirement plan to part- and full-time private-sector workers who don't have access to one through their employer.... Six other states ... are also planning to roll out similar programs within the next five years. When that happens, the seven states will cover nearly one-quarter of the nation's private-sector workers without an employer-sponsored retirement plan."

Resolutions Introduced to Halt DOL Regs Allowing Government-Sponsored Retirement Plans for Private-Sector Employees
"Under the Congressional Review Act, Congress may pass a resolution of disapproval to prevent, with the full force of law, a federal agency from implementing a rule or issuing a rule that is substantially the same without congressional authorization. [H.J. Res. 66] would roll back the regulatory 'safe harbor' created by the Obama administration that will result in private-sector workers being forced into government-run IRAs managed by states. [H.J. Res. 67] would block a second regulation that extended the 'safe harbor' to include cities and counties. Both resolutions would prevent a future administration from promulgating similar regulations."
Committee on Education and the Workforce, U.S. House of Representatives


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Correction of Elective Deferral Failures (PDF)
"Failure to deduct elective deferrals from a participant's pay is a common error in a 401(k). The Employee Plans Compliance Resolution System provides several corrections for this error. [A] chart outlines the key requirements of each correction option."
VOYA Financial

Finding Hidden 401(k) Fees in Participant Disclosure Notices
"[A] 2015 study of 4,368 retirement plan participants ... found that 89% could not correctly calculate their account fees.... [O]nly 42% knew they were paying fees at all. Most plan participants -- 58% -- were unaware that fees were being 'automatically' deducted from their account.... Indirect fees, which are deducted from fund returns, ... are not disclosed in the annual fee notice. Instead, they are lumped into the fund expense ratios listed in the comparative chart.... [It's] still possible -- though not particularly easy -- to uncover their amount by using the comparative chart as a starting point."
Employee Fiduciary

TIAA Loan Practices Questioned in Latest ERISA Lawsuit
"A new lawsuit argues the practices used by the Teachers Investment and Annuity Association (TIAA) to credit portions of interest payments made by participants on loans taken from their own retirement accounts back to the firm -- rather than to the borrowing participant -- violate [ERISA].... According to the compliant, TIAA did not credit the full amount of paid interest to plaintiff's account and instead 'credited a smaller amount of interest to her account and kept the remainder for itself.' "

President Directs Reconsideration of DOL Fiduciary Rule
"Given the broad direction in the executive memorandum and the response of the DOL, there are now serious doubts whether the Fiduciary Duty Rule will go into effect as scheduled in April 2017. Whether the Fiduciary Duty Rule will thereafter be revised or simply abandoned is unknown, but the process of re-proposing any new regulation could take more than a year."
Nixon Peabody LLP

Fiduciary Standards, Yes. DOL Rule, Maybe
" 'It is extremely difficult to get individual firms to commit to a clear position on the fiduciary rule,' [said] Seth Rosenbloom, associate general counsel for ... Betterment ... 'One common tactic ... is to provide a general statement about the importance of the rule's objectives, but no clear commitment to its actual implementation.' And that suggests that the fight will go on."
Bloomberg BNA

How Does the Level of Household Savings Affect Preference for Immediate Annuities? (PDF)
20 pages. "[P]eople at the bottom-and top-ends of the savings distribution (those with the least and most assets) are more likely to buy annuities than people in the middle of the savings distribution.... A large majority (70.2 percent) of the current Social Security recipient households receive at least three-quarters of their income in annuities from Social Security, employer-provided pensions, and other annuity contracts. The fact that most retirees are already highly annuitized might help explain the lack of demand for additional annuity income."
Employee Benefit Research Institute [EBRI]

Retirees Question DuPont Pension Funding
"DuPont expects to contribute another $230 million to its U.S. pension plan in 2017, but some pensioners say it is not nearly enough to ease their fears about the fund's future.... DuPont has a pension obligation of $24.8 billion with $16.6 billion of assets[.]"


ERIC Letter to Congress Supporting Resolution of Disapproval for DOL Regs on State-Sponsored Retirement Plans for Private-Sector Employees
"We can all support a desire to increase access to retirement plans for America's workforce, but we must protect the value provided by the current retirement plan system and avoid unnecessary burdens that could result in likely unintended adverse consequences to the country and its workers, retirees and families.... [ERIC hopes] that the new Administration can carefully consider how best to authorize the use of state and local retirement plans without negatively impacting employers providing retirement benefits to their workers."
The ERISA Industry Committee [ERIC]

Benefits in General

[Official Guidance]

Text of IRS Publication 15-A: Employer's Supplemental Tax Guide, for Use in 2017 (PDF)
73 pages. Topics include: [1] Who Are Employees? [2] Employee or Independent Contractor? [3] Employees of Exempt Organizations. [4] Religious Exemptions and Special Rules for Ministers. [5] Wages and Other Compensation. [6] Sick Pay Reporting. [7] Pensions and Annuities. [8]Leave-based donation programs to aid victims of the severe storms and flooding in Louisiana and to aid victims of Hurricane Matthew.
Internal Revenue Service [IRS]

Executive Compensation and Nonqualified Plans

Acting SEC Chair Signals Possible Delay in Implementation of Pay Ratio Rule
"Under current rules, the CEO pay ratio rule became effective this year, with the first disclosure of the pay ratio [to be] reported in 2018 proxies.... Despite the likely lack of near-term relief, Mr. Piwowar's statement remains significant and provides hope for delay or ultimate repeal of the CEO pay ratio."
Meridian Compensation Partners, LLC

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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