Retirement Plans Newsletter

April 24, 2017

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Employee Benefits Jobs

Manager - Retirement Services
Lockton Insurance Brokers - Pacific Series
in CA

Defined Benefit Administrator
Growing TPA firm
in AZ

External Sales Consultant
Ascensus
in CA

Retirement Service Consultant
Valley Forge Financial Group, Inc.
in PA

Defined Benefit Client Relationship Manager
Goldleaf Partners
in MN

Defined Contribution Consultant
CBIZ - Savitz
in PA

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Webcasts and Conferences

Voluntary Fiduciary Correction Program Workshop
May 17, 2017 WEBCAST
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

Capital Forum on Pensions 2017
May 24, 2017 in CA
Western Pension & Benefits Conference - Sacramento Chapter

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[Official Guidance]

Text of IRS Memo for EP Employees on Computation of Maximum Loan Amount Under Section 72(p)(2)(A) (PDF)
"If during an examination you determine that a qualified plan made two or more loans to the same participant during a 1-year period ... Determine if the plan has computed 'the highest outstanding balance' in one of the two ways described in [this memo]. If it has, the requirement under section IRC Section 72(p)(2)(A) is met and no further inquiry need be done." [TE/GE-04-0417-0016, Apr. 20, 2017]
Internal Revenue Service [IRS]

[Advert.]

Certificate in Strategic Benefits Management

Sponsored by International Foundation of Employee Benefit Plans [IFEBP]

This certificate will help you define your objectives for attracting and retaining talent in your organization. Receive tools to measure the effectiveness of your programs -- in both return on investment and the impact to your company culture.


The Annual Retirement Plan Checkup: An Exercise in Preventive Medicine (PDF)
"An annual review may be performed by internal resources, by engaging an independent third party, with the help of your current vendor(s), or by some combination of the three.... [A] thorough plan checkup should include ... [1] Plan design; [2] Plan documentation and operations; [3] Fiduciary appointments and procedures; [4] Investment menu; [5] Participant services; [6] Plan fees."
The PNC Financial Services Group, Inc.

Considering Roth Elective Deferrals for Your Company's 401(k) Plan?
"Before an employer decides to offer Roth deferrals in their 401(k) or 403(b) plan, careful consideration should be given to what is needed to properly administer the participant accounts.... Who should make Roth 401(k) contributions? ... How does a plan implement Roth elective deferrals?"
Retirement Management Services

Withholding Requirements for 401(k) Plan Distributions
"Normally, any taxable distribution is subject to a mandatory federal income tax withholding of 20%. However, there are certain circumstances when a participant can choose not to have the 20% federal income tax withholding from their distribution.... Periodic payments ... Nonperiodic payments ... Distributions sent outside the United States to nonresident aliens ... Eligible rollover distributions."
WithumSmith+Brown, PC

Judge Dismisses Fiduciary Breach Lawsuit Against CVS and Stable Value Fund Manager
"The lawsuit, originally filed in February 2016 by three plan participants, charged that CVS breached its fiduciary duties because the plan's stable value fund ... imprudently invested 'too much of the plan's stable value fund assets in ultra-short-term cash management funds that provided extremely low investment returns' ... Judge Mary M. Lisi dismissed the suit, citing that the 'fund was invested in conformance with its stated objective and whether that strategy was prudent cannot be measured in hindsight.' " [Barchock v. CVS Health Corp., No. 16-061 (D.R.I. Apr. 18, 2017)]
Pensions & Investments

[Advert.]

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.


As DOL Fiduciary Rule Stalls, Acting SEC Chairman Seeks to Have Agency Step In
"An outspoken critic of the [DOL's] fiduciary duty rule, [acting SEC Chairman Michael Piwowar] expressed support for the implementation delay that recently went into effect while the DOL re-evaluates the regulation ... Mr. Piwowar said that determining advice requirements is the SEC's job, the same point made by financial industry opponents of the DOL rule."
Pensions & Investments

Financial Adviser Alert: Pension Insurer Wants Your Expertise (PDF)
"[PBGC] says it's likely to need outside help to tackle large and complex cases, and it's looking for financial advisers to step up. To find qualified advisory firms -- those with specialized knowledge but without conflicts of interest -- the federal pension insurer says it's renewing a program in which it constructs a list of pre-vetted, go-to financial firms for bids on future contracts."
Bloomberg BNA Pension & Benefits Daily

Comparing the Best Portfolio Rebalancing Software Tools
"[In] today's environment, the need for rebalancing software is even more urgent to stay competitive, with the rise of 'robo-advisors' that can already automate rebalancing, along with tax loss harvesting. The good news, though, is that as the original 'robo' solution for portfolio automation, all the major rebalancing software platforms can handle this... and more! But only for advisors who are willing to move away from portfolio rebalancing Excel spreadsheets!"
Craig Iskowitz, in Nerd's Eye View

In K-12 403(b) Plans, Employees and Their Unions Can Be Their Own Worst Enemy
"Employee groups sometimes balk at reducing investment choice when school districts attempt to make changes, given the history of such retirement plans placing importance on an abundance of choice ... There may also be a degree of distrust between school boards and teachers that freezes progress ... Some unions distributing their own retirement products may also have financial incentives to keep their current plans intact[.]"
InvestmentNews

Understanding Public Pensions: A Guide for Elected Officials
"Since 2009, all states have made modifications to their retirement plans to help ensure their long-term sustainability.... [T]here are no one-size-fits-all solutions from state to state or even from plan to plan to ensure that pension plans are properly financed and effectively managed to pay benefits for the long-term.... Any modifications should be carefully considered to avoid unintended consequences or costs."
Center for State & Local Government Excellence

The Effects of Means-Tested Noncontributory Pensions on Poverty and Well-Being: Evidence from the Chilean Pension Reforms
"This paper examines the impact of the 2008 Chilean pension on labor supply and well-being... [P]reliminary estimates suggest that the pension reforms induced an increase in the probability of working formally, but at least among females, they reduced labor market participation.... Besides some improvements in aggregate household expenditures and in measures of subjective well-being measures among males, [the authors] do not detect robust changes in health and well-being among individuals near retirement."
Michigan Retirement Research Center [MRRC]

[Opinion]

Joint Trade Association Letter to House Speaker Paul Ryan, Opposing Increases in PBGC Premiums
"Congress has increased premiums four times over the past decade, going from $30/person in 2006 to a scheduled $80/person in 2019. The decision to increase these premiums has not been driven from sound pension policy, but rather a need for additional revenue to pay for other, unrelated government programs."
American Benefits Council and seven other employer and professional organizations

Benefits in General

[Official Guidance]

Text of IRS Notice 2017-28: Public Comment Invited on Recommendations for 2017-2018 Priority Guidance Plan (PDF)
"The Treasury Department's Office of Tax Policy and the [IRS] use the Priority Guidance Plan each year to identify and prioritize the tax issues that should be addressed through regulations, revenue rulings, revenue procedures, notices, and other published administrative guidance. The 2017-2018 Priority Guidance Plan will identify guidance projects that the Treasury Department and the Service intend to work on as priorities during the period from July 1, 2017, through June 30, 2018.... Please submit recommendations by June 1, 2017, for possible inclusion on the original 2017-2018 Priority Guidance Plan."
Internal Revenue Service [IRS]

Electronic Distribution Rules for Benefit Plan Notices (PDF)
"The government does not have one set of electronic delivery rules for all required benefit plan notices.... For some notices, it is fairly easy to meet the electronic delivery requirements. For others, it is easier to just send paper copies. This [article] will recap various required notices. It details the general delivery requirements and spells out electronic delivery rules."
Marsh & McLennan Agency LLC

Why Would Congress Bail Out Miners' Pensions?
"If legislators don't act by the end of April, miners will lose their health-care benefits. They may soon lose their retirement benefits, too.... The miners argue that Congress has an obligation to step in because of a deal signed between the federal government and the United Mine Workers in 1946 to end a nationwide strike.... But Congress is in a tight spot. If it bails out the miners, why stop there? Why not bail out all of the other pension funds, private and public, that are on the brink of insolvency?"
The Atlantic

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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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