Retirement Plans Newsletter

March 20, 2017 logo logo
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Employee Benefits Jobs

Executive Compensation Lawyer
Morgan Stanley
in NY

DC Plan Administrator
San Diego Pension Consultants
in CA

Partner Account Manager
in SD, WI, Telecommute

Pension Assistant
Swerdlin & Company
in GA

ESOP Administrator
Swerdlin & Company
in GA

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Webcasts and Conferences

Annual Legal & Regulatory Update
March 23, 2017 in OH
Worldwide Employee Benefits Network [WEB] - Cleveland Chapter

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

Choosing Voluntary Benefits that Drive Engagement and Support Your Overall Benefit Strategy
March 23, 2017 in IL
Worldwide Employee Benefits Network [WEB] - Chicago West Chapter

Getting It Right - Know Your Fiduciary Responsibilities
April 20, 2017 in MD
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

New Parental Leave Laws in Washington
April 25, 2017 WEBCAST
Lorman Education Services

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[Official Guidance]

Text of Treasury Department Notice of Multiemployer Pension Plan Application, Opening of Comment Period (PDF)
"The Board of Trustees of the Western States Office and Professional Employees Pension Fund (WSOPE Pension Fund) ... has submitted an application to Treasury to reduce benefits under the plan in accordance with [MPRA].... The purpose of this notice is to announce that the application submitted by the Board of Trustees of the WSOPE Pension Fund has been published ... and to request public comments on the application from interested parties, including participants and beneficiaries, employee organizations, and contributing employers of the WSOPE Pension Fund."
U.S. Department of the Treasury


P&I 401k/403b Investment Lineup: San Fran, Dallas, Chicago, NY

Sponsored by Pensions & Investments

San Fran: 5/9, Dallas: 5/11, Chicago: 5/16, NY: 5/18 – Register to learn about the crucial issues and options plan sponsors must consider to help their participants achieve their retirement savings and income goals.

[Guidance Overview]

IRS Reminds Taxpayers of April 1 Deadline to Take Required Retirement Plan Distributions
"[The IRS] reminded taxpayers who turned age 70-1/2 during 2016 that, in most cases, they must start receiving required minimum distributions (RMDs) from [IRAs] and workplace retirement plans by Saturday, April 1, 2017. The April 1 deadline applies to owners of traditional (including SEP and SIMPLE) IRAs but not Roth IRAs. It also typically applies to participants in various workplace retirement plans, including 401(k), 403(b) and 457(b) plans."
Internal Revenue Service [IRS]

[Guidance Overview]

New IRS Audit Guidelines for Safe Harbor Hardship Distributions
"[M]any third party administrators offer streamlined hardship withdrawal services and do not maintain source documents or summaries. Employers using such services should ask the third party administrator if it will be modifying its services in light of the new IRS guidance. If not, the employer should maintain summaries to meet the new guidelines in the event of an IRS audit."
Wilkins Finston Friedman Law Group LLP

Smallest Companies Have Highest-Performing 401(k) Plans
"Certified Public Accountants, as an industry, had the highest median plan score, while the Legal and Insurance industries had the second- and third-highest scores, respectively. The Educational Services industry was ranked last, followed by Accommodation and Food Services.... None of the 26 examined industries has a median participation rate of less than 86 percent.... 401(k) plans in the Financial Advice/Investment Activities industry have the second-lowest median rate of return."
Judy Diamond Associates

Managing Critical 403(b) Issues Through Proper Allocation of 3(16) and 3(21) Fiduciary Responsibility
"[T]he complex nature of handling 403(b) plans -- and, in particular, the unique manner in which the fiduciary rules apply to them -- make these plans uniquely suited to customized fiduciary services.... Allocated fiduciary services are especially critical in the growing movement toward 403(b) MEPs, both of the ERISA and non-ERISA types. It takes a special expertise to manage the 'legacy' contract issues in a coordinated and meaningful way [among] a significant number of employers between which employees can often transfer."
Business of Benefits


P&I 401k/403b Investment Lineup: San Fran, Dallas, Chicago, NY

Sponsored by Pensions & Investments

San Fran: 5/9, Dallas: 5/11, Chicago: 5/16, NY: 5/18 – Register to learn about the crucial issues and options plan sponsors must consider to help their participants achieve their retirement savings and income goals.

DB Plan Providers Still Investing in Innovation
"[S]ome providers dedicated to the DB administration business are looking at online features.... Another innovation is providing DB plan sponsors with self-service ... When looking at DB plan providers, plan sponsors should question when they developed their software and how easy it is to enhance it ... [S]ome DB plan sponsors are surprised that fees aren't reduced when they freeze their plans."

Fed Rate Hike Isn't Big News for Pension Plans, Yet
"The Fed's .25 percent increase to the federal funds rate directly affects short term interest rates, but not the long-term, high quality corporate bond rates that pension plans are sensitive to. In fact, long-term rates have dropped from about 4.25 percent to around 4.1 percent since the Fed began raising short-term rates in December 2015.... Sponsors would be wise to construct models measuring the consequences to their plan's funding in anticipation of long-term rates rising by as much as 75 basis points[.]"
Bloomberg BNA

Annuity Options in Public Pension Plans: The Curious Case of Social Security Leveling
"Social Security Leveling is an annuity option that allows participants to receive a level income before and after age 62. The retiree receives a larger pension benefit prior to age 62, but then the pension benefit is lowered at age 62 when the individual is expected to claim Social Security benefits. This option is not uncommon in public pension plans ... . [O]ne-third of all [North Carolina public sector] retirees selecting a single life annuity between 2009 and 2014 opted for Social Security Leveling.... [The authors] see higher rates of ex post 'regret' in the annuity choice among those choosing the level income option."
National Bureau of Economic Research [NBER]

Passive Investment Train Overtakes Active in Corporate DC Plans
"The never-ending fight for lower fees and the fear of fee-related lawsuits have pushed passive investments ahead of active management among large defined contribution plans in 2015 ... Among companies identifying management styles, ... passive management accounted for 51.8% of assets in 2015, while 48.2% were actively managed. That's a flip from 2014, when active management accounted for 51.5% and passive, 48.5%. In 2013, the active to passive split was 54.7% and 45.3%."
Pensions & Investments


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Fiduciary Rule Friends and Foes Weigh in on Proposed Delay
"The [DOL]'s proposed 60-day delay of the fiduciary rule's implementation garnered 565 comments from people pushing for and against the delay.... Once those comments are reviewed, the DOL will submit a final delay rule to the Office of Management and Budget."
Pensions & Investments

House Democrats Denounce DOL Rule Delay as Comment Period Closes
"[A] letter from 40 House Democrats [to the DOL] said that the Trump administration DOL was trying to undo in a matter of weeks a measure that had been carefully constructed over the course of more than six years by the preceding Obama administration. The lawmakers also characterized the stated reason for the delay -- to give the agency time to reassess the rule's impact and consider modifying or repealing it -- as 'specious' since the Obama DOL already vetted it."


Economic Policy Institute Comment Letter to DOL Opposing Proposal to Extend the Applicability Date of the Fiduciary Rule
"[EPI is] writing to express our strong support for the scheduled April 10, 2017, applicability date of the [DOL's] fiduciary rule.... [R]etirement savers and other investors would be harmed by the delay, while the financial industry would benefit.... [T]he costs to savers of a delay far outweigh any benefits to the financial industry."
Economic Policy Institute [EPI]


SPARK Institute Comment Letter to DOL Supporting Proposed Delay of Fiduciary Rule (PDF)
"[The SPARK Institute believes] that a delay is warranted ... [In] order to allow the Department to conduct a thorough review of the Investment Advice Regulation and to prevent potentially duplicative and unnecessary implementation costs, which will adversely affect plan participants, we encourage the Department to adopt a delay of longer than 60 days."
The SPARK Institute


ERIC Comment Letter to DOL Supporting Extension of Applicability Date of Fiduciary Rule (PDF)
"Not only is the plan sponsor harmed by the uncertainty on the state of the rule, but also the participants who may see a sudden decrease in important services if the plan sponsor is not provided adequate time to replace those services.... [ERIC] strongly encourage[s] the DOL to provide a new implementation date that allows for adequate time for service providers to notify plan sponsors of changes in services as well as adequate time for plan sponsors to implement any changes in retirement plan services."
The ERISA Industry Committee [ERIC]


ICI Comment Letter to DOL in Support of Proposed Delay of Fiduciary Rule (PDF)
25 pages. "[A]ny potential 'lost benefits' associated with the delay -- including the Department's highly speculative foregone gains to affected retirement investors -- are well justified by the avoidance of disruption to those investors that would be caused if the rule is not delayed."
Investment Company Institute [ICI]


ERISA: DOL Can't Have It Both Ways
"On the one hand, on April 6 last year, [the DOL] adopted the fiduciary rule subjecting any investment recommendations ... pertaining to retirement-related accounts to fiduciary standards like those of [ERISA]. On the other hand, the department provided a safe harbor from coverage under ERISA to state- and city-sponsored automated payroll-deduction individual retirement accounts for private-sector employees ... which would reduce protections for participants in these plans.... The Labor Department's inconsistent approach is unacceptable."
Pensions & Investments

Benefits in General

Why You Should Share Total Compensation Statements with Your Employees
"Most comp statements will at minimum provide information on the employee's cash compensation and a monetary value for non-cash benefits.... [S]hare compensation reports when it is relevant to the employee: Upon hire, after an increase in pay, or after a promotion."

Please Pass the Matches: The Unfortunate Truth About Your SPDs
"Litigation has changed the original focus of the SPD from being a clear and concise summary of benefits to being an extensive and legalistic enumeration of a plan's provisions. Instead of plain, easy-to-understand English, the typical SPD is crammed with detailed minutia about the plan, which is generally written in the finest 'legalese.' ... [P]lan sponsors should consider communication and design techniques that will make the SPD a better reference tool by making it: [1] Easy to navigate; [2] Easy to understand; [3] Easy to access."
Findley Davies | BPS&M

Press Releases

NAPA Welcomes Paul D’Aiutolo as President
National Association of Plan Advisors [NAPA]

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Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

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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