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House Votes to Scrap DOL Regs on State-Run Retirement Savings Programs for Private Sector Employees
"The House [has] passed resolutions to overturn rules encouraging states to set up retirement savings plans for private-sector workers ... The measures would effectively prevent states and local governments from offering plans that allow small businesses to automatically enroll workers in individual retirement accounts."
The Wall Street Journal; subscription may be required


2017 SPARK National Conference -- June 1-2, National Harbor, MD

Sponsored by SPARK

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.

Congress' Resolution on State-Run Retirement Savings Programs for Private Sector Employees Is Another Step Toward Open MEPs
"Open MEPs would allow small employers to offer a 401(k) plan without having to set it up themselves. Compared to a program based on IRAs, there are significant benefits for employees[.]"
Russell Investments

What Are Common 401(k) Plan Administration Errors?
"These are tactical errors that can cause compliance issues or poor participant experience. The list [in this article] includes some of the most common tactical 401(k) data-quality errors that we have found."

T. Rowe Price Accused of Self-Dealing with 401(k) Plan
"T. Rowe Price offered between 80 and 95 investment funds to participants each year -- all in-house funds, according to a lawsuit filed Feb. 14 in federal court in Maryland. These funds were expensive compared not only to funds offered by other investment companies, including Vanguard Investments, but also compared to other funds offered by T. Rowe Price to its commercial customers, the lawsuit said."
Bloomberg BNA

Allergan Stock Losses Spawn ERISA Class Action
"The complaint accuses Allergan's benefits plan committee and the company's chief financial officer, Maria Teresa Hilado, of failing to protect workers from a 23 percent drop in Allergan's stock price in connection with an ongoing Department of Justice investigation into price collusion among major pharmaceutical companies. Hilado and the committee breached their duties under federal benefits law by continuing to let workers invest retirement savings in Allergan stock, which carried an artificially inflated price tag before news of the investigation broke, the complaint alleges."
Bloomberg BNA


Attend NAPA's 2017 401(k) Summit in Las Vegas

Sponsored by NAPA

Register for NAPA's 2017 401(k) Summit the event Plan Advisors won't want to miss! Enjoy networking with other financial advisors and TPAs while earning up to 14 hours of NAPA/ASPPA CE credits from innovative sessions on the topics that matter most to YOU.

Interesting Angles on the DOL's Fiduciary Rule, Part 36
"[In] its 'Examination Priorities for 2017,' the SEC has indicated that it will focus on 'Senior Investors and Retirement Investments.' ... [T]he terms 'Senior Investors,' 'Retirees,' and 'IRA Owners' are, in many cases, synonymous. For these investors, the SEC will focus on: [1] The ability of advisers to identify financial exploitation of seniors; [and] [2] Registrants' supervisory programs and controls related to products and services directed at senior investors. In terms of qualified assets, this means that the SEC will be looking at the products and services recommended to retirees who are IRA owners."

Some 'Top of Mind' Thoughts on the Fiduciary Rule Delay
"[It] may turn out that the very group most opposed to a delay in the applicability date might be the financial services industry ... [T]here are far more investors than there used to be who are aware that some advisers are not obligated to act in the best interest of investors.... While it is possible that the rule will be completely scrapped, modification of the rule appears to be more likely."
Cammack Retirement Group

Why Series 7 Brokers Legally Can't Be Client Fiduciaries Without DOL Fiduciary Rule
"The key issue is that the Series 7 exam is technically the 'General Securities Representative Examination.' This name is important, because it indicates that ultimately, the licensee is acting as a representative of the broker-dealer.... And as a representative of the broker-dealer, the broker technically has an obligation to serve the broker-dealer, not the client."
Michael Kitces in Nerd's Eye View

Employee Stock Ownership Plans: Do the Benefits Outweigh the Risks?
"Corporations with ESOPs invested in privately held company stock that is not readily tradeable on an established market face a unique cash flow risk that can quickly escalate.... Leveraging can be a useful tool to battle the repurchase obligation, but can also be a source of abuse if the employer does not adhere to its intended purposes.... Recordkeeping for ESOPs is complex, as are the rules governing ESOPs. There are many areas of ESOP design and administration that can be risky.... [M]any business owners see ESOPs as a more attractive option than selling to a competitor or attempting a company buyout."
Findley Davies


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Planning to Keep Your 401(k)? Be Careful When You Reach Age 70-1/2
"With IRAs, RMDs must be calculated separately for each account, but the amounts can then be added together and distributed by any one of the IRAs.... In the case of an employer-sponsored plan such as a 401(k), the RMD must be calculated separately and distributed separately from each plan.... Employer-sponsored Roth accounts are subject to RMDs.... If you're still contributing to your employer-sponsored plan, you may be able to delay taking RMDs."

CalPERS Passes Risk Mitigation Plan to Further Lower Assumed Rate of Return in the Future
"The new plan puts focus on reducing the investment portfolio's vulnerability to a market downturn but won't go into effect until the fiscal year that starts July 1, 2020. Its implementation will follow the completion of staggered decreases over the next three fiscal years ending June 30, 2020, that will take CalPERS' rate of return to 7% from the current 7.5%."
Pensions & Investments


ERIC's Statement on Passage of Joint Resolutions of Disapproval on State-Run Retirement Savings Programs for Private Sector Employees
"The rules inappropriately allowed states and localities to impose requirements on employers already offering retirement plans. Mandatory state or local retirement plans should focus solely on employers who do not provide a retirement plan and explicitly not apply to employers who provide a plan subject to federal rules."
The ERISA Industry Committee [ERIC]


Letter by Pension Rights Center: Congress Misunderstands DOL Regs in Passing Resolution Against Payroll-Deduction IRA Programs Established by States (PDF)
"The [DOL's] 2016 guidance does nothing more than clarify that state legislation providing for payroll deduction into an IRA is not an employer retirement plan. The employer has no involvement beyond transmitting payroll deductions to the IRA negotiated by the state with a private vendor.... These voluntary payroll-deduction IRAs plans are aimed at providing retirement income to employees of small employers who do not offer plans. They are modest plans, subject to the low $5,500 IRA limits, and will not compete with existing defined benefit plans or 401(k) plans (which have higher contribution limits)."
Pension Rights Center

Benefits in General

Seven Things to Know About Limited Discovery in ERISA Long-Term Disability Cases
"[D]iscovery in ERISA cases is generally limited because of the 'significant ERISA policy interests of minimizing costs of claim disputes and ensuring prompt claims-resolution procedures.' Various circuits have different tests on when additional discovery may be taken beyond the administrative record. And, if limited discovery is allowed, then what discovery is allowed? [A] recent case ... highlights the point." [Aitken v. Aetna Life Ins. Co., No. 16-4606 (S.D.N.Y. Jan. 19, 2017)]
Lane Powell PC

Executive Compensation and Nonqualified Plans

Another Federal Court Affirms Enforceability of Restrictive Covenants in Electronically Delivered Equity Award Agreements
"The court easily rejected plaintiffs' argument that they had never checked a box stating they 'agreed to' or 'accepted or acknowledged' the terms of the agreements. The court observed that they had checked a box affirming that they 'read' the documents, and the documents explicitly advised them that the non-competes were a condition of accepting the stock award. The court also found the plaintiffs' contention that they did not recall reading the documents, irrelevant." [ADP, LLC v. Lynch, Nos. 16-3617, 16-01111 (3d Cir. Jan 17, 2017; not precedential)]
Winston & Strawn LLP

Tax Season 2017: A Quick Take on What's New for Stock Comp
"In general, 2016 brought no major tax changes to consider.... However, developments over the past few years, such as changes in tax rates or amounts that are indexed yearly for inflation, continue to affect tax-return reporting.... The 2016 version of IRS Form 1099-B, which brokers issue for stock sales made during the tax year, closely resembles the version for the 2015 tax year. However, the 2014 version introduced some major changes that you should continue to keep in mind[.]"

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