Retirement Plans Newsletter

March 8, 2017 logo logo
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Employee Benefits Jobs

Retirement Plan Administrator
RPC CPAs + Consultants, LLP
in NM

Relationship Manager
in TX

Vice President, Operations (financial services industry)
in MA

Retirement Plan Compliance Analyst QKA
Newport Group
in AL, AZ, CA, FL, IA, IL, KS, MA, MD, MI, MN, MO, NC, OH, TX, VA, WI, Telecommute

Relationship Manager
Newport Group
in CA

Conversions Consultant
Newport Group
in AL, CA

Senior Analyst, Global Business Group on Health
National Business Group on Health
in DC

Client Relationship Manager
Professional Capital Services
in PA

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Webcasts and Conferences

DOL Fiduciary Rule: Planning for Contingencies
March 15, 2017 WEBCAST
Vorys, Sater, Seymour and Pease LLP

In Transition – What is Happening with the Affordable Care Act?
March 29, 2017 WEBCAST
Ballard Spahr Andrews & Ingersoll, LLP

Accounting and Auditing Institute for Employee Benefit Plans
June 26, 2017 in CA
International Foundation of Employee Benefit Plans [IFEBP]

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[Guidance Overview]

IRS Issues Memorandum on Substantiation Guidelines for Safe-Harbor Hardship Withdrawals from 401(k) Plans
"Although the Memorandum is not formal guidance, it does provide information on what the IRS considers sufficient substantiation and documentation for a hardship withdrawal.... [T]he Memorandum does not address substantiation of non-safe-harbor hardship withdrawals, although the employer should consider applying these standards for any hardship withdrawal."
Sherman & Howard


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[Guidance Overview]

Interesting Angles on the DOL's Fiduciary Rule, Part 39
"Even though the DOL fiduciary rule is being delayed, other regulators have indicated their interests in protecting participants from inappropriate recommendations to take plan distributions and roll over to IRAs.... The regulators appear to be harmonizing around the type of analysis and investigation required to make a suitable or prudent recommendation."

[Guidance Overview]

DOL Proposes 60-Day Delay of Fiduciary Duty Rule
"[W]hat will happen next? One of four things seems likely: [1] The DOL will permit the Fiduciary Duty Rule, and associated exemptions, to become applicable on June 9, 2017, or perhaps a later date; [2] The DOL will begin the regulatory process to revoke the Fiduciary Duty Rule; [3] The DOL will begin the process to modify the Fiduciary Duty Rule; or [4] The DOL will decide it has not had enough time to fully consider the matter, and will seek a further extension, and continue work on one of the three outcomes described above."
Davis Wright Tremaine LLP

[Guidance Overview]

DOL Guidance on Shareholder Rights: A Political Ritual
"IB 2016-1 withdrew Interpretive Bulletin 2008-2, issued at the end of the Bush administration, and reinstated views expressed in Interpretive Bulletin 94-2, which was issued during the Clinton administration, but withdrawn by the Bush administration.... Obama-era guidance is consistent with Clinton-era guidance and can be viewed as consistent with Bush-era guidance, except as follows: [1] Obama-era guidance is based on the concept that ETI and ESG factors can positively impact the economic interests of the plan and its participants, and [2] Obama-era guidance supports shareholder activism/engagement if it is 'likely to enhance' shareholder value, while Bush-era guidance required that such activism/engagement be 'more likely than not' to enhance shareholder value."
Trucker Huss

Cybersecurity Threats: What Retirement Plan Sponsors and Fiduciaries Need to Know and Do
"While there is no comprehensive federal regulatory scheme governing cybersecurity for retirement plans and their service providers, many state laws ... include breach notification and private rights of action for the unauthorized disclosure of protected personal information, and state attorney generals have been active in enforcing these laws in cyber breach cases. In addition, existing guidance under ERISA already recognizes the risks associated with the electronic communication of plan information."
Poyner Spruill LLP


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.

Three Common 401(k) Plan Errors (as Told by Employee Benefit Plan Auditors)
"[P]lan administrators and management must clearly understand the definition of eligible compensation, not only when the plan is created, but on an ongoing basis.... Plan sponsors should determine when contributions can be reasonably segregated, and this conclusion should be documented and monitored to make sure remittances are timely and that any late remittances are reported and appropriately corrected.... [P]lan sponsors and third-party administrators should have a formal approval process for hardship distributions, including obtaining documentation of the hardship reason, certification of the unavailability of alternative funding sources, and a procedure to assure employee contributions cease, if applicable."

Understanding the Role of a Benefit Plan Committee (PDF)
12 pages. "[T]he plan committee -- that is generally responsible for operating the plan -- is the party whose actions are critical for minimizing potential exposure to fiduciary violations that could lead to DOL enforcement and/or private litigation."
The Wagner Law Group, for Legg Mason

Pension Finance Update, February 2017
"Pension sponsors enjoyed a second month of modest improvement in finances during February on the strength of strong stock markets. Both model pension plans ... gained ground again last month: Plan A improved 1% in February and is now up 2% this year, while Plan B added a fraction and is now up almost 1% total through the first two months of the year."
October Three Consulting

CBO Explains Options for the Future of the Social Security Program
"While delivering testimony at Congressional hearings in February, CBO's Director was asked a number of questions about potential changes to Social Security. Because answers during hearings are inherently brief, this blog post provides some additional information."
Congressional Budget Office [CBO]

An Overview of Section 457 plans
"What is a 457 plan? ... Who can establish a 457 plan? ... What types of 457 plans are available? ... Are there contribution limits for 457 plans? ... Can an employee contribute to a 457 plan and a 401(k) or 403(b) plan? ... What are some of the advantages of participating in a 457plan? ... What are the differences between a non-governmental 457 plan and governmental 457 plan?"
Butterfield Schechter LLP

The State of State Teachers' Pension Plans
"Teachers' pension plans have always rewarded long-serving veterans at the expense of short-termers. But now, as more and more plans develop shortfalls, states have been imposing cost-cutting measures, and recent research shows that the newest hires are bearing the brunt of the changes, raising questions of fairness."
The New York Times; subscription may be required


Attention, South Carolina: Closing a Pension is Never a Good Idea
"South Carolina lawmakers unanimously voted to increase contributions to state pension plans -- a system that supports 1 out of every 9 South Carolinians ... However, ... a last-minute amendment added a stipulation that the plans be closed to new employees once full funding has been achieved.... South Carolina legislators need look no further than the states and cities that have closed their pension systems to learn of the costly ramifications that follow."
National Public Pension Coalition


Why Planning Fees Should Be Payable from Retirement Accounts
"[If] the aim of tax policy is to facilitate better outcomes for consumers, it's worth acknowledging that the current framework unintentionally exhibits poor behavioral characteristics by limiting the ability of consumers to pay for long-term financial planning advice from accounts that are ear-marked for long-term goals (or forcing those financial planning fees to be bundled with [assets-under-management (AUM)] fees or product commissions that may not be practical or feasible in all situations)!"
Nerd's Eye View


The Dangers of Cutting Future Retirement Benefits for the Young
"Social Security ... faces a long-term imbalance in cost and revenue, but the gap is manageable. More importantly, future retirees will need Social Security more, not less, than their parents did.... [L]ongevity is rising.... Savings alone cannot hedge against longevity risk ... 57 percent of near-retirement households (age 55-64) that participate in workplace retirement plans are covered by a traditional pension, according to the National Institute on Retirement Security; just 30 percent for age 35-44 are covered."

Benefits in General

In a Significant Change, Second Circuit Requires Strict Compliance with DOL Claim Regs
"At least in the 2nd Circuit, new pitfalls await ERISA administrators processing claims and appeals from adverse benefit determinations. If that administrator fails to comply strictly with all [DOL] regulations regarding claims administration, it is likely to lose the significant benefit of the arbitrary and capricious standard of review." [Salisbury v. Prudential Ins. Co. of America, No. 15-9799 (S.D.N.Y. Feb. 28, 2017)]
Thompson Coburn

Press Releases

PSCA Forms New Committee Focused on Health Savings Accounts
PSCA [Plan Sponsor Council of America]

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David Rhett Baker, J.D., Editor and Publisher
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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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