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April 10, 2017 logo logo
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Webcasts and Conferences

Assessing and Improving Practices Regarding Investment of Retirement Plan Assets
Verrill Dana LLP

Health Care Reform Update: The AHCA and its Demise
April 27, 2017 in DC
Worldwide Employee Benefits Network [WEB] - Washington Metropolitan Chapter

HIPAA Breaches: Preparation and Response
May 24, 2017 WEBCAST
Thomson Reuters / EBIA

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[Official Guidance]

Text of IRS Memo for EP Employees: Definitely Determinable Cash Balance Plan Benefit Formulas (PDF)
"A Determinations specialist reviewing a determination letter request, or an Exam agent auditing a plan in which the benefit formula is not the subject of a determination letter, should follow the analysis (including examples) in the attached Issue Snapshot for determining whether a benefit formula based on only a portion of annual compensation, a special bonus, or other measure not based on annual compensation, is 'definitely determinable.' " [TE/GE-04-0417-0014, Apr. 7, 2017]
Internal Revenue Service [IRS]


Just Launched! What's Market, Equity Plans Database -- FREE TRIAL

Sponsored by Thomson Reuters Practical Law

For help drafting equity plans for clients and answering questions about what is market practice, Practical Law has launched its new What's Market, Equity Plans database. Access a free, no-obligation trial today!

[Guidance Overview]

DOL Delays Fiduciary Rule and Eases Compliance
"Compliance with certain contentious provisions of the PTEs will be delayed until January 1, 2018.... During this grace period, investment advice fiduciaries will be required only to adhere to what the DOL guidance defines as the 'impartial conduct standard.' This standard requires investment advice fiduciaries to interact with retirement savers by making only recommendations that are in the retirement investor's best interest, avoiding misleading statements, and charging no more than reasonable amounts for investment advisory services."

What Retirement Plan Sponsors, Fiduciaries and Service-Providers Need to Know About Cybersecurity Risk and Liabilities (PDF)
13 pages. "Retirement plan sponsors and plan fiduciaries should consider cybersecurity with respect to their own systems and those of their retirement plan service providers. While there is no overriding federal law dictating security or privacy standards directed at retirement plans or the service providers to such plan, the retirement plan's data may remain largely unprotected unless the plan administrator requires that the plan's data be protected. Failure to take proactive steps to protect a retirement plan and its participants' data, may have undesirable consequences for the plan administrator and employer."
Winstead PC, Via Bloomberg BNA Tax Management Compensation Planning Journal

PBGC Premiums Are Soaring but Tamable
"One way that some underfunded plans can make those costs more manageable is to make contributions after the plan year ends but within an 8 1/2-month grace period extending from the close of the plan year ... Underfunded plans can also reduce PBGC premiums by making contributions in excess of minimum funding contribution requirements to improve the plan's funding level.... Other options for reducing PBGC premiums include using push back strategies to modestly accelerate plan contributions, selecting an appropriate interest rate for calculating PBGC vested liability and using risk transfer strategies[.]"
Bloomberg BNA

Why Employers Should Care About the Cost of Delayed Retirement
"[A] one-year increase in average retirement age results in: [1] Incremental annual workforce costs of about 1.0%-1.5% for an entire workforce.... [2] An incremental cost of over $50,000 for an individual whose retirement is delayed. This represents the cost differential between the retiring employee and a newly hired employee."


2017 SPARK National Conference -- June 1-2, National Harbor, MD

Sponsored by SPARK

The retirement services industry's leading event for top marketing, sales, administration and record keeping professionals. Comprehensive agenda is designed to meet the needs of 401(k) Plan Providers, Financial Advisors and Third Party Administrators.

Cliffs Natural Resources Beats ERISA Challenge to Stock Drop
"The lawsuit against Cliffs involved two scenarios ... The first is when stock price plummets and investors claim that public information about the company's struggles demonstrated that the stock was a bad investment. The second is when investors learn that the company's stock was artificially inflated and corporate executives had inside knowledge of corporate fraud that caused the inflation.... The Cliffs employees raised claims based on both public and inside information. The Sixth Circuit rejected both under Dudenhoeffer." [Saumer v. Cliffs Natural Resources, No. 16-3449 (6th Cir. Apr. 7, 2017)]
Bloomberg BNA

Expanding Multiple Employer Plans: A Bipartisan Idea to Narrow the Coverage Gap
"If enacted, [the Retirement Security for American Workers Act] ... would fix the one-bad-apple rule by requiring that the assets of a non-compliant employer be transferred out of the MEP, either to a separate plan for that employer or to other retirement plans for employees, such as IRAs. Second, it would permit open MEPs by eliminating the requirement of a nexus among participating employers for MEPs sponsored by a 'pooled plan provider.' "
J.P. Morgan Asset Management

Retirement Plan Changes Possible with Tax Reform
"House Republican leadership did reference generally ... a proposal to consolidate and reform the multiple different retirement savings provisions and consider the creation of Universal Savings Accounts. And House Ways and Means members are reportedly considering possible changes that would move IRAs and defined contribution plans to a Roth system, with after-tax contributions and tax-free distributions, as a possible revenue raiser."
Plan Sponsor Council of America [PSCA]

Twelfth Union Plan Files for Benefit Reductions Under MPRA
"The [International Association] of Machinists Motor City Pension Fund out of Troy, MI ... became the twelfth multiemployer plan to file for benefit cuts under MPRA in an attempt to avoid insolvency."

Potential Pension Cuts for 5,200 Teamsters Delayed
"The New York State Teamsters Conference Pension and Retirement Fund, which has about 34,000 participants statewide, had submitted a plan to the U.S. Treasury Department, seeking permission to impose the cuts.... Now the fund's board of trustees has withdrawn its application, putting off potential cuts until later this year."
Buffalo News

South Carolina Legislature Passes Pension Reform Bill
"[T]he new law ... would increase the employer contributions to the state pension fund 2 percentage points to 13.56%. For employers contributing to the Police Officers Retirement System, the 2 percentage point increase will raise the contribution rate to 16.24%. Both employer contribution rates will increase after fiscal year 2018 by an additional 1 percentage point per year through the end of the 2023 fiscal year."
Pensions & Investments

How to Invest in Private Equity with a Self-Directed IRA
"[1] Get familiar with the self-directed IRA guidelines.... [2] Understand the risks associated with private equity investments.... [3] Compare the costs to any potential upside of investing in private equity."
U.S. News & World Report

Because the Whole is Greater than the Sum of its Parts: Using the Actuarial Approach to Determine Spending During Retirement
"When comparing spending strategies, many retirement researchers make simplifying assumptions that individuals have Social Security and maybe one or two other lifetime income sources that are not deferred and, in total, are expected to be received linearly in constant real dollars over a retiree's lifetime planning period. They also assume that individuals will determine their annual spending by summing these individual sources of income and will spend exactly this amount each year.... The primary problem with summing individual sources of income to determine how much one can spend in a year is that it increases the odds that a retiree's spending strategy will be inconsistent with the retiree's spending goals."
Ken Steiner, FSA Retired


Many IRA Contracts Include Impartial Conduct Standards as an 'Implied Term'
"[T]he absence of a express term in the contract that the Impartial Conduct Standards are to be adhered to does not means that the parties to the contract cannot enforce the Impartial Conduct Standards. Rather, the Impartial Conduct Standards become implied terms of every new IRA account agreement (or IRA annuity contract) entered into on or after June 9, 2017, and become applicable to existing IRA account agreements when transactions are undertaken that remove the arrangement from grandfathered status."
Ron A. Rhoades, JD, CFP

Executive Compensation
and Nonqualified Plans

Exempt Stock Compensation Limits May Increase
"Rule 701 under the Securities Act of 1933 currently provides a mechanism for non-public companies to offer and sell their securities for the purpose of providing compensation to their own employees without the need to register those securities.... [If] the company believes sales under the plan will exceed $5,000,000 in a coming 12-month period, the company must disclose risk factors and certain financial statements to the employee investors. The new legislation would double the $5,000,000 figure to $10,000,000 before a company would have to reveal financial information."
Seyfarth Shaw LLP

Discussions on
the BenefitsLink Message Boards

401(k) Safe Harbor Match Fails 414(s): How to Handle?
"I have a 401(k) Safe Harbor Match Plan that excludes bonuses. It fails 414(s) for 2016. The plan document allows for exclusion of bonuses as long as compensation is tested under 414(s), but I can't find where it addresses what to do if 414(s) fails. Can I amend the plan, or is it just no longer a Safe Harbor Plan?"
BenefitsLink Message Boards

Press Releases

Amy Cavanaugh Joins DATAIR as an ERISA Consultant
DATAIR Employee Benefit Systems, Inc.

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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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