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ERISA Attorney
John Hancock Retirement Plan Services
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TAG (Technical Answer Group) Editor
Wolters Kluwer Legal & Regulatory

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Webcasts and Conferences

Helping Small Business Owners Save for Retirement
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Filling the Void in Guaranteed Retirement Income
March 28, 2017 WEBCAST

General Nondiscrimination Testing for DC Plans (401(a)(4))
April 18, 2017 WEBCAST
FIS Relius Education

What's New with 403(b) Plans?
April 20, 2017 WEBCAST

Executive Compensation
April 20, 2017 in FL
ASPPA Benefits Council [ABC] of Central Florida

Form 5500 Reporting Update
April 26, 2017 WEBCAST
Lorman Education Services

Retiree Medical Valuations for Pension Actuaries
August 16, 2017 WEBCAST
ASPPA College of Pension Actuaries [ACOPA]

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[Guidance Overview]

IRS Publishes Audit Guidelines for Hardship Withdrawals from 401(k) and 403(b) Plans
"The IRS audit guidelines only relate to the documentation requirements that apply to safe harbor hardship withdrawals, but are likely to also be relevant to non-safe harbor hardship withdrawals."
Miller Johnson


Annual Funding Notice Deadline is April 30! Are you ready?

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Supreme Court to Consider Application of ERISA to Church-Affiliated Pension Plans
"The obvious problem with [the employers'] argument is the odd line it draws between plans that are exempt and those that are not exempt.... [W]hy would Congress insist that pure-church plans be both established and maintained by religious organizations while church-affiliated plans need only be maintained by religious organizations? ... [The employees] suggest that the 1980 amendments should be viewed as limited to relaxing the requirement that they address by providing that church-affiliated plans, like church plans, must be 'established' by the 'church' itself, but that they will retain their exempt status whether they are 'maintained' by the church itself or by the affiliate." [Advocate Health v. Stapleton, Nos. 16-74, 16-86, 16-258 (oral argument in consolidated cases sched. Mar. 27, 2017)]

Eighth Circuit Affirms Fiduciary Breach for Disloyalty and Rejects District Court Finding of No Loss
"While the appellate court affirmed the district court's ruling that the ABB fiduciaries acted disloyally when they decided to replace the Vanguard Wellington Fund with the Fidelity Freedom Funds, the Eighth Circuit directed the lower court to reconsider the appropriate measure of damages.... While a prudent process is critical and fiduciaries may enjoy deferential treatment of their investment decisions, those protections may only go as far as a challenge to the fiduciary's prudence. Where the fiduciary's loyalty is at issue, there is 'no place for deference.' " [Tussey v. ABB, Inc., No. 15-2792 (8th Cir. Mar. 9, 2017)]
Miller & Chevalier

Bank of America Prevails in 401(k) Asset Transfer Case
"Bank of America Corp. prevailed against employees who challenged a $3 billion transfer from the company's 401(k) plan to its cash balance defined benefit plan ... The employees failed to establish that BofA retained any profit as a result of the transfer, Judge Graham C. Mullen [held]." [Pender v. Bank of America Corp., No. 5-238 (W.D.N.C. Mar. 17, 2017)]
Bloomberg BNA

The 2017 Retirement Confidence Survey: Many Workers Lack Retirement Confidence and Feel Stressed About Retirement Preparations (PDF)
32 pages. "Six out of 10 American workers feel very or somewhat confident about having enough money for a comfortable retirement, though just 18 percent feel very confident ... 3 in 10 workers report that preparing for retirement causes them to feel mentally or emotionally stressed.... Among all workers, about half say that retirement planning (53 percent), financial planning (49 percent), or health care planning (47 percent) programs would be helpful in increasing their productivity at work.... Seventy-nine percent of retirees report feeling either very or somewhat confident about having enough money to live comfortably throughout their retirement years, including one-third of retirees who feel very confident (32 percent)."
Employee Benefit Research Institute [EBRI]


Things Have Changed Are You Up-To-Date?

Sponsored by ASPPA

Keep up to date on the latest rules and regulations with the ERISA Outline Book, THE resource for information on qualified plans. Choose from two great formats; hardcopy or online, including access to a fully searchable and cross-referenced website.

Investment Management M&A Activity: Considerations for Plan Sponsors
"[A] reduction in the number of firms and strategies could actually be beneficial for investors due to improved fee transparency, reduced trading costs, upgrades in technology and potential enhancements in risk-appropriate allocations through the growing utilization of TDFs. Perhaps most important for defined contribution investors will be the streamlining of their investment lineup ... [T]here are also several downsides of which investors should be aware[.]"
Cammack Retirement Group

DC Plan Executives Should Offer 'Enhanced Active Choice' to Build Trust
"Plan sponsors must increase trust among participants to improve participation and increase contribution rates because traditional strategies ... have limitations ... Using principles of behavioral psychology ... enhanced active choice seeks to create in participants a desire to avert a feeling of regret, which leads to a wish to exert greater control over their actions. In turn, this attitude leads to greater trust."
Pensions & Investments

Can Smaller Plan Sponsors Dream Big? Yes! A Case Study
"Recordkeeping fees were cut in half and a new best-in-class investment menu with a low cost index tier was implemented, along with transparent, direct-billed participant fees to replace revenue sharing (a unique arrangement for a 403(b) plan of this size). How did a plan sponsor such the size of [the Anglican Church in North America] accomplish so much and so quickly?"
Cammack Retirement Group

Using an All-Index-Fund Lineup in 401(k) Plans
"Arguments for using only index funds: Less volatility ... Elimination of advisor conflicts ... No more poorly performing funds ... Simplicity ... The end of fund changes ... Better performance ... Closet indexers ... Higher level of fiduciary compliance? ... Arguments for using actively managed funds: Less than 100% of every market downturn ... Inefficiencies still exist ... Misperception of active management ... Animal spirits."
Lawton Retirement Plan Consultants

Tax Reform Could Be 'Way Worse' for Retirement Industry Than DOL Fiduciary Rule
"Some of the items that could be on the table are a freezing or reduction of 401(k) contribution limits, a sort of double taxation on the retirement savings of individuals in higher tax brackets, and elimination of 403(b) and 457 plans, [said Brian Graff, Executive Director of the National Association of Plan Advisors] ... Mr. Graff also said the fiduciary rule ... poses a large risk in its current iteration to brokerage and advisory firms because of its provision allowing a private right of action for investors. This exposure to class-action litigation ... [is] 'a game-changer from a business standpoint.' "

Western States Office & Professional Employees Pension Fund Seeks Cuts
"The fund's board has proposed a 29% decrease for all participants and beneficiaries, but no reduction below 110% of the PBGC guaranteed benefit for each affected participant. Under the plan, disability pensions are not reduced, and participants who are age 80 or older on Dec. 31, 2017, have no reduction.... The Western States Office & Professional Employees Pension Fund was first certified to be in critical status with the Treasury Department in 2009, and is projected to become insolvent in 2035 if no changes are made."
Chief Investment Officer [CIO]

Employee Stock Ownership Plans 101
"There are three main reasons to consider an ESOP. [1] Succession planning ... [2] Borrowing money on a tax-favored basis ... [3] Organizations that support employee ownership frequently tout the higher profitability of employee-owned companies and offer supporting statistics."
Findley Davies | BPS&M

Why You Shouldn't Stick With Your 401(k) Plan's Default Settings
"Sticking with a low default savings rate might cause you to miss out on part of the 401(k) match your employer offers.... [T]he more money you save up to the annual contribution limit, the bigger the dollar value of your tax break.... [C]heck out whether the target-date fund's underlying investments, the rate at which the fund grows more conservative and the fees charged suit your risk tolerance and investment needs."
U.S. News & World Report

Benefits in General

[Guidance Overview]

GASB Omnibus Statement Addresses Pension and OPEB Issues
"The issues covered by GASB Statement No. 85, Omnibus 2017, include: ...Timing of the measurement of pension and other postemployment benefits (OPEB) liabilities and related expenditures recognized in financial statements prepared using the current financial resources measurement focus ... Recognizing on-behalf payments for pensions or OPEB in employer financial statements ... Simplifying certain aspects of the alternative measurement method for OPEB."
Governmental Accounting Standards Board [GASB]

ERISA Attorney Fee Awards: What Are 'Reasonable Hours' for a Plaintiff's Attorney to Spend on a Summary Judgment Motion?
"The Court reduced the hourly rates and approved the following rates: lead attorney -- $300; associate attorney $175; paralegal $90 per hour.... For the summary judgment motion and related pleadings alone, Plaintiff's attorney billed a total of 163.2 combined hours ... 'The Court finds that this is excessive in light of what other district courts have found reasonable for litigating a case through summary judgment.' ... The Court allowed only 85 hours for the lead attorney's time spent on the summary judgment, and excluded time spent by the associate and paralegal as duplicative. " [Standish v. Federal Express Corp. LTD Plan and Aetna Life Ins. Co., No. 15-6226 (W.D.N.Y. Mar. 6, 2017)]
Lane Powell PC

Executive Compensation and Nonqualified Plans


Text of IRS Rev. Proc. 2017-28: Credit or Refund of FICA or Railroad Retirement Tax -- Employee Consents (PDF)
16 pages. "The purpose of this revenue procedure is to provide guidance to employers on the requirements for employee consent used by an employer to support a claim for credit or refund of overpaid taxes under the Federal Insurance Contributions Act (FICA) and the Railroad Retirement Tax Act (RRTA) ... This revenue procedure clarifies the basic requirements for both a request for employee consent and for the employee consent, including the requirement that an employee consent must include the basis for the claim for refund and be signed by the employee under penalties of perjury. In addition, this revenue procedure permits, but does not require, employee consent to be requested, furnished, and retained in an electronic format as an alternative to a paper format. It also contains guidance concerning what constitutes 'reasonable efforts' if employee consent is not secured in order to permit the employer to claim a refund of the employer share of overpaid FICA or RRTA taxes."
Internal Revenue Service [IRS]

Press Releases

National Employee Benefits Day is April 3, 2017
International Foundation of Employee Benefit Plans [IFEBP]

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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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