Retirement Plans Newsletter

February 22, 2017 logo logo
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Employee Benefits Jobs

Webcasts and Conferences

Successful Sale to an ESOP: Transitioning Leadership and Governance
March 1, 2017 WEBCAST
Ohio Employee Ownership Center

Getting It Right - Know Your Fiduciary Responsibilities: Basic Fiduciary Responsibilities
March 14, 2017 WEBCAST
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Do That with Your ESOP: Great Ideas from ESOP Companies
March 14, 2017 WEBCAST
National Center for Employee Ownership [NCEO]

Getting It Right - Know Your Fiduciary Responsibilities: ERISA’s Reporting and Disclosure Provisions
March 16, 2017 WEBCAST
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Impact of the New Administration on Employee Benefits — What to Plan For
March 16, 2017 in NY
Worldwide Employee Benefits Network [WEB] - New York Chapter

Getting It Right - Know Your Fiduciary Responsibilities: Qualified Medical Child Support Orders
March 21, 2017 WEBCAST
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Department of Labor Fiduciary Rule: What’s Next?
March 23, 2017 in DC
Worldwide Employee Benefits Network [WEB] - Washington Metropolitan Chapter

How to Properly De-Risk Your Pension Plan: A Rainbow of Options
March 30, 2017 WEBCAST
Findley Davies, Inc.

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Sixth Circuit Rejects IRS Claim that Taxpayers Aren't Allowed to Avoid Roth IRA Limits
"The Court recognized that the petitioners' complicated series of transactions were essentially a strategy for funneling money into Roth IRAs without triggering the contribution limits but that the taxpayers had fully complied with the text of the tax laws in doing so.... The Court rejected the Commissioner's attempt to reclassify the transactions under the substance-over-form doctrine and balked at the Commissioner's contention that when taxpayers are presented with alternative methods of structuring a transaction, the taxpayer must choose that which results in higher tax liability." [Summa Holdings, Inc. v. Comm'r, No. 16-1712 (6th Cir. Feb. 16, 2017)]
Squire Patton Boggs


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PBGC Adds Credit Deterioration, Cash Flow Decline to Early Warning Factors It Monitors
"The federal pension insurance agency has for more than 20 years monitored corporate transactions and events through its Early Warning Program (EWP). In December 2016, the PBGC updated the program's overview on its website and added 'credit deterioration' and a 'downward trend in cash flow or other financial factors' to its watch list.... The new additions may lead to a PBGC inquiry, even if none of the other corporate transaction warning signs listed is present."

Upheld, Delayed and Under Review: Heads Are Spinning Over the Fiduciary Rule
"So far, all three cases challenging the Fiduciary Rule have upheld it without reservation.... Even though the Trump [DOL] is not bound to follow the reasoning in the court decisions, it IS required to hold new hearings on its proposals with respect to the Rule.... Can others step forward to defend the Rule? ... Of course, the Fiduciary Rule could still be repealed by legislation."
Cohen & Buckmann, P.C.

Index Funds Make It Easy to Reduce 401(k) Fiduciary Liability
"The beauty of index funds from a 401(k) fiduciary perspective is that most are inherently more prudent than comparable actively-managed funds, making prudent fund selection dead simple.... Most index funds are cheaper than comparable actively-managed funds due to their passive investing approach.... Most index funds deliver highly-correlated benchmark returns. This is contrast to actively-managed funds, whose returns can differ dramatically from their benchmark."
Employee Fiduciary

American Views on Defined Contribution Plan Saving, 2016 (PDF)
32 pages. "Seventy percent of US households had favorable impressions of 401(k) and similar retirement plan accounts in fall 2016, similar to 72 percent in fall 2015 and 71 percent in fall 2014.... Eight in 10 DC-owning households said the tax treatment of their retirement plans was a big incentive to contribute. Nearly all households with DC accounts agreed that it was important to have choice in, and control of, the investments in their DC plans. Eighty-one percent indicated that their DC plan offered a good lineup of investment options."
Investment Company Institute [ICI]


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Defined Contribution Plan Participants' Activities, First Three Quarters of 2016 (PDF)
12 pages. "Defined contribution (DC) plan withdrawal activity in the first three quarters of 2016 remained low and was similar to the activity observed in the first three quarters of 2015.... Only 2.4 percent of DC plan participants stopped contributing in the first three quarters of 2016, compared with 2.5 percent during the first three quarters of 2015.... In the first three quarters of 2016, 8.1 percent of DC plan participants changed the asset allocation of their account balances and 5.6 percent changed the asset allocation of their contributions."
Investment Company Institute [ICI]

Roth 401(k) Contributions, from the Participant's Point of View
"On an after-tax basis, the participant can create an account which (including the investment gains) is forever free of state and federal income taxes, because all of the taxes are instead paid up front as the dollars are contributed to the plan. The employee will have to consider a number of factors[.]"
Retirement Management Services

The Impact of Decreasing Retirement Spending on Safe Withdrawal Rates
"The conventional method for evaluating safe withdrawal rates assumes that retirees maintain a stable standard of living through retirement in real (inflation-adjusted) dollars.... [C]onstant real spending is not particularly realistic for most retirees. Instead, various studies are finding that real spending actually declines throughout retirement, by as much as 1% to 2% per year. And compounded throughout retirement, this discrepancy between standard industry assumptions and actual retiree behavior may be underestimating the safe withdrawal rate."
Michael Kitces in Nerd's Eye View

Guide to Retirement, 2017 Edition
44 detailed presentation slides. Topics: [1] Retirement landscape: Factors that shape today's retirement experience; [2] Saving behaviors and best practices while saving for retirement; [3] Spending considerations for living in retirement; [4] Investing: Building a retirement portfolio.
J.P. Morgan Asset Management

Some Retirement Decisions Have Expiration Dates
"Claiming ages for Social Security retirement benefits range under current law from age 62 to age 70. We can delay the decision past age 70 but there is no benefit from doing so ... The expiration dates for this decision are mandated and fixed. In contrast, asset allocation decisions have no expiration date."
The Retirement Cafe

Public Pension Plan Investment Return Assumptions (PDF)
"This brief discusses how investment return assumptions are established and evaluated, [and] compares these assumptions with public funds' actual investment experience ... [A] 25 basis point reduction in the return assumption, such as from 8.0 percent to 7.75 percent, will increase the cost of a plan that has a COLA, by three percent of pay (such as from 10 percent to 13 percent), and a plan that does not have a COLA, by two percent of pay."
National Association of State Retirement Administrators [NASRA]


U.S. Chamber of Commerce Comment Letter to PBGC on Alternative Methods for Computing Withdrawal Liability
"The Chamber believes that widespread implementation of the two-pool alternative withdrawal liability arrangements could be helpful in stabilizing the multiemployer pension system.... [It] would be helpful to highlight areas where requests have been deficient or highlighting information that is necessary for approval.... Moving away from a prescriptive list [of information required from plan sponsors] would minimize the burden of employers and plans having to provide information that is not necessary for the PBGC's determination."
U.S. Chamber of Commerce


ARA Comment Letter on Proposed Rules to Implement the Oregon Retirement Savings Plan (PDF)
"ARA recommends the final rules be clarified in accordance with the statements on the Oregon Saves website to specifically exempt any employer that offers a qualified plan whose waiting period and other eligibility provisions comply with federal law.... ARA recommends broadening the definition of a 'qualified plan' in the proposed rules to include payroll deduction IRA programs that are made available outside of the OregonSaves program."
American Retirement Association [ARA]

Benefits in General

Winning Tactic on Summary Judgment to Prove Claimant Received the Policy: Get Key Evidence into the Administrative Record
"To prove delivery of the policy (from four years earlier), Lincoln National included in the administrative record a declaration outlining the delivery practices for this type of policy.... Including the declaration in the administrative record was a winning strategy because the court applied the 'abuse of discretion' standard, rather than a Rule 56 'genuine dispute of fact' standard, where dispute of facts would have to be construed in favor of the nonmoving party." [Sliwa v. Lincoln National Life Ins. Co., No. 13-1433 (D. Nev. Feb. 8, 2017)]
Lane Powell PC

Why Student Loan Repayment May Soon Be a Standard Benefit
"The average tenure of Millennials is around 16 months, and the bulk of these workers are saddled with a tremendous amount of student loan debt ($30,000 on average). That revolving door mentality among younger workers hurts employers' retention rates and costs a fortune in extra recruiting and training costs. Plus, because student loan debt makes contributing to a 401(k) a low priority, employers' 401(k) participation rates suffer as well."
HR Benefits Alert

Obamacare Repeal May Birth a New Retirement Account
"Under the Cassidy-Collins plan, Roth HSA contributions would not be tax-deductible, cutting off one leg of the triple advantage. However, unlike regular HSAs, you wouldn't need a high-deductible health plan to qualify for a Roth HSA -- and you could pay health-insurance premiums with the account."

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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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