Retirement Plans Newsletter

March 24, 2017

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Webcasts and Conferences

Best Practices for Retirement Plan Fiduciaries to Mitigate the Risk of Litigation
April 4, 2017 WEBCAST
Multnomah Group

Specialty Drugs: What You Must Know to Manage the Growing Spend
April 5, 2017 WEBCAST
Worldwide Employee Benefits Network [WEB]

Regulatory and Legislative Benefit Update
April 27, 2017 in CT
Worldwide Employee Benefits Network [WEB] - Hartford Chapter

401(k) / 403(b) Investment Lineup
May 11, 2017 in TX
Pensions & Investments

Benefit Plan Voluntary Correction Programs: Properly Correct Errors and Minimize Penalties
May 31, 2017 WEBCAST
Lorman Education Services

How to Survive an ACA Audit
June 6, 2017 WEBCAST
Lorman Education Services

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[Guidance Overview]

IRS Issues Guidance to Correct Defective 403(b) Plans
"[A]mendments must be retroactive to January 1, 2010, so a correction could cover a lot of years. If a plan was administered based on a defective plan document, that failure would also need to be corrected retroactively using EPCRS. Employers will need to collect information from 2010 forward as to what amendments have been made to the 403(b) plan and when, as well as to whether operation was consistent with those plan terms."
Ice Miller LLP

[Advert.]

SALGBA 2017 National Conference

Sponsored by SALGBA [State and Local Government Benefits Association]

Join SALGBA, the premier organization for public sector benefits professionals in Anaheim, CA for the 2017 National Conference at the Hyatt Regency Orange County. Visit www.salgba.org for details.


[Guidance Overview]

MPRA Benefit Suspension Applications: Notes from Meeting of Actuaries and Treasury, PBGC and DOL (PDF)
"The application for benefits suspensions under MPRA represent a significant time and expense for all parties involved. Thus, it is in the best interest of plan sponsors, actuaries, Treasury, and PBGC that there is a high success rate with respect to future MPRA applications. The discussion in this exchange was intended to provide plan sponsors and actuaries with insights about the MPRA application review process with a goal to help plan sponsors make decisions about applying and to increase the acceptance rate for those who do apply." [Editor's note: the meeting was held on Feb. 22, 2017.]
Multiemployer Plans Subcommittee, American Academy of Actuaries

[Guidance Overview]

Deadline for Plan Sponsors to Submit Qualification Amendments with the Puerto Rico Treasury Is Fast Approaching
"[P]lan sponsors or participating employers using the calendar year as the tax year that have adopted 'qualification amendments' during 2016, must submit such amendments with the Puerto Rico Treasury on or before April 15, 2017 ... The term 'qualification amendment' is limited to the [certain] modifications[.]"
Littler

Bill to Help Small Business Retirement Plans Introduced in House, Senate
"Bipartisan legislation has been introduced in both the House and the Senate to make it easier for small businesses to offer retirement plans -- or at least easier to file Form 5500. The bill directs the [DOL] and the Treasury Department to allow employers and sole-proprietors participating in retirement plans administered in the same way to file a single aggregated Form 5500."
American Society of Pension Professionals & Actuaries [ASPPA]

DOL Fiduciary Rule Status Update
"The [DOL] received 900 comment letters, along with several petitions, in respect of its proposed 60-day delay of the fiduciary rule. As expected, there was a split in support/opposition of the proposed delay.... The DOL is confident it will be able to make a final decision on whether to delay the rule before the April 10 applicability date.... April 17 is the deadline to submit comment letters addressing both the questions raised in the President's Memorandum, as well as the litany of questions posed by the DOL in its proposed delay."
Stradley Ronon

[Advert.]

Frozen plans are different, and need to be managed differently.

Sponsored by Russell Investments

Thousands of pensions have frozen benefit accruals on the path to plan termination. Many more are considering such a step. The Frozen Plan Handbook is an illustrative guide for sponsors who have frozen—or are considering freezing—their pension plan.


How Skillful RMD Planning Can Sustain Retirement Portfolios
"[T]he mathematics of the RMD virtually guarantee that a portfolio cannot be liquidated within 45 years. The required minimum withdrawal may be inadequate to meet the needs of the retiree in the later years, but that is a different matter. On the other hand, the stipulated RMD may be more than the retiree needs to spend that year, so the excess above their needs can be reinvested into a taxable investment account -- or simply stuffed in a mattress!"
Financial Planning

Benefits in General

Court Rules No Deferential Review Where Discretionary Authority Was Addressed in SPD But Not in Plan
"Including discretionary language only in the SPD may not ensure deferential review of plan decisions -- particularly in light of cases emphasizing the supremacy of the formal plan document under ... While it is impossible to gauge whether this denial would have survived deferential review, this decision illustrates some potential pitfalls that can arise from common practices." [Nieves v. Prudential Ins. Co. of America, No. 16-768 (D. Ariz. Jan. 17, 2017)]
Thomson Reuters / EBIA

Use of Electronic Medium to Furnish Participant Notices, Documents and Elections (PDF)
"In this age of electronic communication the ability to deliver participant documents, notices, consents and election options through electronic medium can be a great convenience and cost savings to plan sponsors. Both the Treasury and the DOL recognize this and each has its own regulation for use of electronic media.... The document, notice, election or consent will be treated as provided in writing if all the requirements of the appropriate regulation are met."
VOYA Financial

Executive Compensation and Nonqualified Plans

[Opinion]

Calculation of the CEO Pay Ratio Can Be Greatly Simplified
"Narrow the definition of 'employee' and 'employee of the registrant.' ... Clarify that prior-year data can be used to identify the median employee.... Clarify that companies can use base pay as a consistently applied compensation measure (CACM).... Make clear that the disclosure can be a 'reasonable estimate.' ... Allow registrants to use readily accessible records to determine employee classifications.... Permit broader use of 'reasonable estimates' as part of statistical sampling to greatly reduce the effort required for companies with global workforces."
Willis Towers Watson

[Opinion]

Business Roundtable Comment Letter to SEC on Implementation of Pay Ratio Rule
"[C]omplying with the CEO pay ratio rule is costly and burdensome for U.S. public companies of all sizes.... [T]his is particularly complicated and costly for a company with employees located in different jurisdictions throughout the world.... Despite the significant compliance costs, the CEO pay ratio fails to provide material information to investors about a company's compensation of its CEO or its employees and will not enhance investors' understanding of a company's compensation practices."
Business Roundtable [BRT]

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Lois Baker, J.D., President  loisbaker@benefitslink.com
David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
Holly Horton, Business Manager  hollyhorton@benefitslink.com

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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