Retirement Plans Newsletter

March 1, 2017

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Defined Contribution Plan / 401k Plan Administrator
N.A. Falcone & Associates, Inc.
in PA

Retirement Specialist
Nationwide
in WA

Retirement Plan Administrator
PlanTech, LLP
in AL, Telecommute

Enrolled Actuary
Pension Consulting Firm
in NY

Retirement Plan Administrator
Hessel & Associates
in IL

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Webcasts and Conferences

Health Insurance Reform Round 2
March 16, 2017 in AZ
Worldwide Employee Benefits Network [WEB] - Phoenix Chapter

Innovations in Workplace and Community Wellness: A New Era
April 6, 2017 in DC
U.S. Chamber of Commerce

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[Guidance Overview]

DOL Proposes Extension to Fiduciary Rule Applicability Date
"The department will accept public comments on the proposed extension for 15 days following its publication. Comments on issues raised in the presidential memorandum will be accepted for 45 days. The proposal will be published in the March 2, 2017, edition of the Federal Register[.]"
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

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[Guidance Overview]

DOL Proposes 60-Day Extension in Fiduciary Rule Applicability
"The proposal notes that, absent an extension in the applicability date, if the examination prompts the Department to propose rescinding or revising the rule, affected advisers, retirement investors and other stakeholders might face two major changes in the regulatory environment rather than one. 'This proposed 60-day extension of the applicability date aims to guard against this risk,' the Labor Department noted[.]"
Nevin Adams, for National Association of Plan Advisors [NAPA]

[Guidance Overview]

IRS Offers Easier Option for Substantiating Hardship Withdrawals
"Prior informal guidance set out the IRS position that plan administrators must retain financial information and documentation to substantiate the need for a hardship distribution. The new IRS memorandum [provides that] a plan administrator may retain a summary of information contained in source documents. To rely on such a summary, the employee obtaining a hardship distribution must be provided a notice containing information specified in the IRS memorandum, such as the tax consequences of a hardship distribution and the participant's obligation to preserve source documents relating to the hardship."
Husch Blackwell

Helping Small Business Owners Start Retirement Plans
"During America Saves Week, [DOL wants] to help small business owners set up retirement plans -- for your own future financial security as well as that of your employees. It's easier than you think to get started. It just takes a few simple steps: [1] Explore your options ... [2] Assess your needs ... [3] Choose a plan and start saving."
U.S. Department of Labor [DOL] Blog

Dealing with Uncashed Distribution Checks and Missing Participants
"Plan sponsors retain fiduciary responsibility of the funds represented by uncashed checks.... At a minimum, plan documents or written procedures should describe: [1] The steps that will be taken to locate lost or non-responsive participants; [2] The time frames for banks or the plan administrator to report uncashed checks to the plan; and [3] How the funds from uncashed checks will be handled if the participant cannot be located."
Markley Actuarial

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Tax Credit for Small-Employer Start-Up Plans
"Many employers are unaware that, in certain circumstances, they may be eligible for a valuable tax credit in connection with their establishment of a retirement plan.... [T]here are several very important 'defined terms' included within the authorizing language for the credit that are critical to determining its availability to any particular plan sponsor.... [T]he credit is only available with respect to the establishment of an 'eligible employer plan'.... [T]he credit may only be applied in connection with 'qualified plan start-up costs'."
Legacy Retirement Solutions

Empower Will Not Take on Fiduciary Role When DOL Rule Kicks In
"Empower Retirement, one of the largest record keepers of defined contribution plans in the U.S., is planning to send notices to its retirement plan clients affirming it does not intend to be a plan fiduciary if and when the [DOL's] conflict-of-interest rule's implementation phase begins.... Empower is the third-largest record keeper by DC assets, with about $400 billion under administration, and ninth by number of plans, with around 34,000 total[.]"
InvestmentNews

Fiduciary Expansion: Uncertain Future and Possible Next Steps
"In spite of the likely delay, most retirement plan providers ... are working toward the April 10 initial applicability date ... Some vendors have issued contracts to reflect their updated service models that would seem to take effect regardless of any delay in the rule.... [T]hese new vendor service models ... likely depend on prohibited transaction exemptions related to the new rule. A significant question in these situations is what services clients who do not agree to a vendor's new fiduciary services will receive in the event the new rule do not go into effect."
CAPTRUST Financial Advisors

Can a Retirement Plan Have Too Much Risk Management?
"[T]he critical question is whether investment fiduciaries can be too cautious. Most reasonable people would likely say 'yes.' ... Retirement plan fiduciaries and their advisors are well served by identifying primary goals, major obstacles and both short-term and long-term nightmares that would generate serious pain for participants."
Pension Risk Matters

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Trump Administration Hits Hurdle in Fiduciary Fight
"While a new OMB determination seemingly makes it more burdensome for the Trump administration to unravel the DOL fiduciary rulemaking, there is some disagreement as to what this will actually mean."
PLANSPONSOR

U.S. Single Premium Pension Buy-out Sales Top $13.7 Billion in 2016
"In the fourth quarter, single premium pension buy-out sales were $5.8 billion, which is level with 2015 sales. This marks the seventh consecutive quarter to exceed $1 billion in sales, a trend never seen since the Institute began tracking sales in the 1980s."
LIMRA

When Multiemployer Pensions Fail: Teamsters Local 707
"The Teamsters Local 707 pension has gone bust, and it's been taken over by the 'insurer' of last resort: the PBGC.... [In] 1999, Local 707 was 100% funded. The tech bubble -- followed by 9/11 -- ruined that. The trust lost 30% of its assets.... When the 2008 crash came, Yellow Roadway Carrier couldn't make its payments.... Yellow Roadway was allowed to skip its pension contributions for 18 months. When the company started paying again, it was at 25% of the previous rate. The fund began to topple, with roughly 700 workers paying into a fund supporting more than 4,000 retirees. Local 707's fund pays out $48 million a year -- and takes in $7.5 million in contributions[.]"
STUMP

Defined Benefit Pensions and Racial Equity in Retirement
"Black households earn significantly less income than white households. This inequality in income leads to inequality in overall household wealth, which includes retirement wealth. However, an often overlooked bright spot is that many black households still have access to traditional defined benefit pensions."
National Public Pension Coalition

[Opinion]

America's Crumbling Pension Future?
"[T]he biggest problem with all these multiemployer pension plans is they never had proper governance, were raked on fees by Wall Street, and were poorly managed for decades.... And now that the chickens have come home to roost ... retirees seeing their pension benefits being slashed by half or more are rightfully asking for the government to help them."
Pension Pulse

Benefits in General

[Guidance Overview]

DOL Boosts Disability Claimant Protections
"During the review process, disability claimants must be guaranteed the right to present evidence supporting their claim and to respond to any new information prior to the final decision. They must also be given notice and a fair opportunity to respond if benefits are to be denied on appeal based on new evidence or rationales not used to deny the benefit at the claims stage."
Fisher Phillips

March and April 2017 Filing and Notice Deadlines for Qualified Retirement and Health and Welfare Plans
"[This table] provides key filing and notice deadlines common to calendar year plans for the next two months.... [T]he deadlines will generally be different if your plan year is not the calendar year.... [T]he table is not a complete list of all applicable filing and notice deadlines (including any available exceptions and/or extensions), just the most common ones."
King & Spalding

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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2017 BenefitsLink.com, 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 BenefitsLink.com, 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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