Retirement Plans Newsletter

March 7, 2017

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Employee Benefits Jobs

Senior Conversion Analyst
BlueStar Retirement Services, Inc.
in FL

Retirement Education Specialist
Principal Financial Group
in OR

ERISA Technical Team Manager
Nationwide Financial
in OH

Account Executive/Consultant - Retirements Svcs
Lockton Insurance Brokers - Pacific Series
in CA

Retirement Plan Consultant
Qualified Plan Consultants, LLC
in IA

Senior Pension Administrator
Primark Benefits
in CA

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Webcasts and Conferences

Overview of the Tax Treatment of Popular Employer-Provided Fringe Benefits
March 10, 2017 WEBCAST
Littler Mendelson

Target Date Funds - Ten Years Later
March 22, 2017 WEBCAST
CAPTRUST Financial Advisors

Advanced Topics in Health & Welfare Plans
April 27, 2017 in MA
New England Employee Benefits Council

Certificate in Global Benefits Management
June 12, 2017 in IL
International Foundation of Employee Benefit Plans [IFEBP]

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[Guidance Overview]

Using the New IRS Remedial Amendment Period Rules (PDF)
28 pages. "To properly consider the consequences of this effective elimination of the type of determination letter program ... it is important to understand when qualified retirement plans may be amended retroactively.... [If] an employer or other plan sponsor has unlimited ability to retroactively amend a plan, it becomes relatively unimportant whether the IRS will issue a determination letter saying the form of the plan appears consistent with the Tax Code requirements for qualified retirement plans."
Utz & Lattan, LLC

[Advert.]

Compensation Issues under Qualified Plans

Sponsored by ASC

Join John Griffin, J.D., LL.M., March 30th, for a webcast discussion that will clarify the complex and often confusing issues regarding compensation under qualified plans. Register today!


[Guidance Overview]

New IRS Memorandum Is a Hardship Act to Follow
"Many plan sponsors who have used this type of all-electronic hardship application process have faced pushback from the IRS during audits.... The IRS cautioned that an electronic application process could be insufficient, because employees may leave employment or fail to keep copies, thus making their records inaccessible in the event of an IRS audit. This new guidance suggests a more flexible approach to the all-electronic hardship withdrawal process."
Eversheds Sutherland

[Guidance Overview]

DOL Proposes 60-Day Delay of Applicability Date for Fiduciary Rule
"The DOL has acknowledged that its examination of the rule and the PTEs pursuant to the president's memo, together with possible resultant actions to rescind or amend the rule, could require more time than the proposed 60-day extension would provide. The DOL therefore wants to know from commenters what costs and benefit considerations it should consider if the applicability date is further delayed, for six months, a year, or more."
McGuireWoods LLP

What Your 401(k) Investment Committee Should Focus On
"Investment option costs (and performance) ... Provider costs (and performance) ... Feature utilization and plan design ... Employee communications ... Investment committee fiduciary responsibilities ... Documentation of discussions and decisions."
Lawton Retirement Plan Consultants

J.P. Morgan Faces Second Lawsuit Alleging Self-Dealing in 401(k) Plan
" 'Rather than engage in systematic, arm's length review of available plan investment options, J.P. Morgan sought out investment options that allowed its affiliates and business partners to reap outsized fees,' said the lawsuit ... The lawsuit alleged that half of the 401(k) plan's investment options were affiliated with J.P. Morgan and another 20% were BlackRock Inc. options. BlackRock is not a defendant."
Pensions & Investments

[Advert.]

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.


A Primer for Plan Sponsors: 457(b) and 457(f) Plans
"[1] What is a 457(b) plan? ... [2] What are the contribution limits for 457(b) plans? ... [3] What are the distribution rules for 457(b) plans? ... [4] What is a 457(f) plan? ... [5] What are the contribution limits for 457(f) plans? ... [6] What are the distribution rules for 457(f) plans? ... [7] Which employers can offer non-governmental 457(b) and 457(f) plans? ... [8] Why would an employer use a 457(b) or 457(f) plan?"
Strategic Benefit Services

Most Employers Interested in Pension Risk Transfer
"8 in 10 employers with a traditional defined benefit pension plan are interested in pension risk transfer (PRT). Since 2014, there has been a significant shift in plan sponsors interest in PRT. Today, 4 in 10 plan sponsors are very interested in PRT, a 10 percentage-point increase from the results of a 2014 Institute study of DB plan sponsors."
LIMRA

February's Pension Funded Status Declines After Discount Rate Plunges Below 4% (PDF)
"After five straight months of improvement, the funded status of the 100 largest corporate defined benefit pension plans worsened by $6 billion during February ... An 11 basis point drop in the benchmark corporate bond interest rates used to value pension liabilities rendered February's strong investment performance almost meaningless. As of February 28, the funded status deficit of these plans widened to $322 billion from $316 billion at the end of January. The funded ratio fell to 81.5% down from 81.6% during the same time period."
Milliman

Using Income Data from IRS to Examine the Transition to Retirement
"[M]ost individuals do not experience a reduction in inflation-adjusted spendable income after claiming Social Security... Examining the five-year period from one year before individuals first receive Social Security retirement benefits to three years after, 81 percent of individuals had income, either directly or through a spouse, from employer retirement plans, annuities, or IRAs; and another 8 percent had a Form 1099-R (indicating a retirement account transaction, such as a rollover, that did not generate income), a Form 5498 (indicating IRA ownership), or both."
Peter J. Brady, Steven Bass, Jessica Holland, and Kevin Pierce, Via SSRN

The Consequences of Overestimating Retirement Expenses
"The actuarial approach anticipates that many things will change each year, and the client and financial advisor will meet periodically (I recommend annually) to revisit and recalculate the plan to reflect those changes. Some financial advisors, however, doubt their clients will like the potential budget variability under the actuarial approach. But this variability can be managed using rainy day funds, transference of funds between spending buckets or by smoothing the actuarially calculated budget."
Ken Steiner, FSA Retired, in Advisor Perspectives

[Opinion]

Text of Comment Letters to DOL on Proposed Delay of Applicability Dates for Fiduciary Rule and Related PTEs
These letters have been submitted to DOL, in response to DOL's request for comments on the proposed delay of the Applicability Date for the final fiduciary rule issued Apr. 8, 2016 and related ERISA prohibited transaction exemptions. 81 comment letters have been submitted as of March 3, 2017; deadline for submission of comments is March 17, 2017.
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

[Opinion]

Congress Should Block States from Taking Over the Private-Worker Pension Business
"Advocates argue that the proposed new retirement systems will be less risky than current government-employee pensions, which are largely defined-benefit plans that guarantee workers a certain annual income upon retirement. But many of the most indebted state-worker pensions were also originally designed to be 'safe.' ... Over time, however, politicians changed the plan designs so that they could promise employees bigger retirement checks -- eroding the protections originally built into them. There's nothing preventing the same thing from happening with the new state-run retirement systems."
City Journal

[Opinion]

40th Anniversary of ERISA: What Is the Context? (PDF)
"Many individuals, employers, businesses and institutions have forcefully challenged any number of changes in ERISA throughout its history.... Some assert government should not place additional restrictions on employers' plans.... But, if the employer wants any of the truly one-of-a-kind tax benefits for itself and its employees, then there are rules that are intended to advance policies that are laudable."
The ERISA Law Group

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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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