Senior Benefits Analyst
Growing Benefits Consulting Firm
in PA

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Principal Financial Group
in AZ, CA, CO, DC, GA, IA, IL, IN, MA, MN, MO, NC, OH, OR, PA, TN, TX, UT

Pension Research Clerk
IUPAT Industry Pension Fund
in MD

Retirement Operations Specialist
Fringe Benefit Group
in TX

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Voluntary Fiduciary Correction Program
April 25, 2017 WEBCAST
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Employment, Benefits and Financial Planning for Transitioning Service Members – Important Information for Your Financial Security Now and in the Future
April 26, 2017 WEBCAST
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

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[Official Guidance]

Text of IRS Notice 2017-27: Weighted Average Interest Rates, Yield Curves, and Segment Rates Applicable for April 2017 (PDF)
"This notice provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under Section 417(e)(3), and the 24-month average segment rates under Section 430(h)(2) ... In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under Section 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under Section 431(c)(6)(E)(ii)(I). The rates in this notice reflect the application of Section 430(h)(2)(C)(iv), which was added by [MAP-21] and amended by section 2003 of [HATFA]."
Internal Revenue Service [IRS]

[Advert.]

Trustees and Administrators Institutes

Register by May 15 to save $300. Attend the Trustees and Administrators Institutes to receive timely, relevant and balanced education on the issues that face the benefits industry including the opioid crisis, the future of ACA and DOL audits.

[Official Guidance]

Text of PBGC Interest Rate Update for Benefits Payable in Terminated Single-Employer Plans, May 2017
"The May 2017 interest assumptions under the benefit payments regulation will be 1.00 percent for the period during which a benefit is in pay status and 4.00 percent during any years preceding the benefit's placement in pay status. In comparison with the interest assumptions in effect for April 2017, these interest assumptions are unchanged."
Pension Benefit Guaranty Corporation [PBGC]

[Guidance Overview]

New IRS TE/GE Audit Information Document Request Procedures
"The new process will involve more direct communication between the taxpayer and the IRS and, hopefully, more targeted document production requests. The new enforcement procedures, however, will require taxpayers to fully respond to an [information document requests (IDR)] within the stated timeframe or face specific follow-up actions--including proposed adjustments (i.e., taxes), issuance of a summons, or proposed revocation of tax-exempt status."
Morgan Lewis

[Guidance Overview]

Interesting Angles on the DOL's Fiduciary Rule, Part 42
"The only clear guidance from the DOL about what information needs to be gathered and evaluated is found in Q14 in the DOL's Conflict of Interest FAQs ... Basically, the information includes the investments, expenses and services in the plan and the proposed IRA. But at the end of the FAQ, the DOL explains that those considerations must be evaluated even if the adviser is using regular BIC (as opposed to the Level Fee Fiduciary provision). Accordingly, any fiduciary seeking to meet the best interest standard (in order to satisfy transition BIC) would engage in a prudent analysis of this information before recommending that an investor roll over plan assets to an IRA, regardless of whether the fiduciary was a 'level fee' fiduciary or a fiduciary complying with BIC."
FredReish.com

[Guidance Overview]

Puerto Rico Legislation May Require Changes to Retirement Plans
"Act No. 9-2017 revises a number of Puerto Rico qualified retirement plan rules including contribution limits, rules related to nondiscrimination testing and employer deductions for retirement plan contributions. Questions remain about how and when to implement these changes, but the 2017 Act became effective immediate upon enactment, so plan sponsors should be prepared for the possibility of mid-year 2017 changes to their retirement plans."
National Law Review

[Advert.]

A simple, illustrative guide for pension plan sponsors.

This practical overview for corporate plan fiduciaries is not only a great reference work – it's a high level guide that makes an excellent training tool for new board and investment committee members.

You Are (or Are Not) a Professional -- and You Are (or Are Not) Covered by the PBGC
"[D]eduction rules for PBGC-covered and non-covered plans are different.... The IRS averred in our client's situation that a financial advisor is a professional, so his plan is exempt from PBGC coverage.... A coverage ruling was requested and ... the PBGC ruled that the financial advisor was a professional.... [T]he PBGC considered significant objective and subjective elements.... [A] search of a Form 5500 database ... found that 68% of the 650 plans in that category had been coded as being PBGC-covered. That is a lot of surprised folks who have been paying premiums, calculating contributions, and operating as if they were PBGC-covered."
Ferenczy Benefits Law Center LLP

Quantitative Methods Identify Significant Fee Waste in Retirement Plans (PDF)
15 pages. "[This study] analyzed 52,529 retirement plans from the DOL EFAST database. Using quantitative methods [the authors] estimate that participants could save .25% a year on a weighted average basis by switching into lower cost investments that are quantitatively very similar to those they already hold.... As of March 2015 total defined contribution plan assets stood at $6.8 trillion. This means that savings of approximately $17.07 billion annually are being wasted in the retirement industry."
RiXtrema Research

2016 NAPA Black Book
"A TPA can be a plan advisor's best friend. But it's important to understand the various types of TPAs and how to best leverage them depending on the plan profile and size." [Chart lists 36 TPAs, with number of plans and participants, total assets, and other metrics.]
National Association of Plan Advisors [NAPA]

Fintech Firms Still See a Future for Fiduciary Compliance Tools
"[A] portfolio construction platform, is just one of dozens of fintech firms that began promoting their tools to advisers last summer, aiming to capitalize on compliance requirements the rule would demand.... [F]intech heads defend their strategy, arguing that just because the rule may end up derailed, the need for advisers to upgrade their technology and be open with clients doesn't go away.... [W]hile firms may have to tweak their messaging, the DOL rule has created client awareness and demand."
Financial Planning

Puerto Rico Pension Participants Sue to Stop Cuts
"Public sector employees and retirees in Puerto Rico filed suit [on April 12] to prevent the governor and oversight board from implementing a fiscal plan that calls for 10% reductions in benefits paid by the Puerto Rico Government Employees' Retirement System, Hato Rey, beginning in 2020."
Pensions & Investments

Looking for a Retirement Lifeline in Puerto Rico
"Out of every three workers ages 35 to 64 in Puerto Rico, one is saving for retirement and two are not. One in five (19%) workers in this age group is contributing to a retirement savings plan. Forty-four percent (44%) of workers have no access to a retirement plan through their employer. Defined benefit plans are offered to thirty-six percent (36%) of workers surveyed and a similar share (38%) has access to a defined contribution plan. Nineteen percent (19%) have access to both types."
AARP

Another Question is Answered in the Who's the Employer Q&A Column
"What are the implications of being a statutory employee for unemployment benefit purposes, since the employer is not required to pay into the unemployment fund for these employees?"
S. Derrin Watson, on BenefitsLink

[Opinion]

Laws of Unintended Consequences: Pension Reform Gone Awry (PDF)
"The Public Employees' Pension Reform Act (PEPRA), effective January 1, 2013, was passed to rein in [California] pension costs that were viewed as unsustainable.... Similar to how the Legislature took a blunderbuss rather than a surgical approach to pension reform in PEPRA, some courts have launched comprehensive, rather than targeted, attacks on the 'vested rights' doctrine. In recent months, their rulings have started to gain momentum."
Jeffrey R. Rieger, of Reed Smith LLP

ERISA Preempts Common-Law Fraud Claims Against Employer for Enrollment Dispute
"Plaintiff's wife died in 2014, and the insurer denied benefits, asserting that no evidence of insurability questionnaire had been submitted for her.... Plaintiff sued Sears, alleging constructive fraud, negligent misrepresentation, and intentional infliction of emotional distress.... The court noted that plaintiff was entitled to life insurance benefits 'only if the ERISA plan provided them.' Because plaintiff's entitlement to coverage would exist only because of the plan, and because Sears had no independent duty to him, ERISA preempted his claims." [Prince v. Sears Holdings Corp., No. 16-1075 (4th Cir. Jan. 27, 2017)]
Robinson & Cole LLP

Avoiding Beneficiary Befuddlement
"The 11th Circuit decision should be helpful to plan administrators ... [who] may wish to consider some of the following practices and additions to plan language in anticipation of these situations: [1] Giving frequent written reminders to participants about their beneficiary designations; [2] Resoliciting updated beneficiary designations from participants on a periodic basis; [3] Adopting a rule providing for the revocation of spousal designations upon divorce; [4] Adopting a rule specifying a presumption of survival in the event of the simultaneous death of a participant and beneficiary; [5] Adopting a rule that voids a beneficiary designation naming a person who is convicted of the murder of the participant." [Ruiz v. Publix Super Markets, Inc., No. 16-735 (M.D. Fla. Mar. 30, 2017)]
Benefits Bryan Cave

A Few Considerations During Form 5500 Season (PDF)
"Both the IRS and DOL comment that improperly completed Form 5500s will increase the probability that they may take a closer look at plan matters. [This article includes] a short list of considerations and questions aimed at helping plan sponsor employers avoid government investigation otherwise prompted by a 'wrong' answer on the Form 5500."
The ERISA Law Group

INTAC Expands Its Team of Specialized Pension Consultants
Intac Actuarial Services, Inc.

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