Retirement Plans Newsletter

May 2, 2017 logo logo
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CRM Associate
Fi401k Advisors, LLC
in CO

Retirement Plan Coordinator
Woodbury Financial Planning Firm
in NY

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Webcasts and Conferences

Multiple Employer Plans (MEPs) Webcast
May 18, 2017 WEBCAST

Form 5500 For Welfare Plans: Part 1
May 23, 2017 WEBCAST
FIS Relius Education

Form 5500 For Welfare Plans: Part 2
May 24, 2017 WEBCAST
FIS Relius Education

Make the Most of Your Mental Health and Substance Use Disorder Benefits
May 24, 2017 WEBCAST
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

2017 Western Benefits Conference
July 9, 2017 in CA
ASPPA [American Society of Pension Professionals & Actuaries]

Employer-Health System Direct Contracting and Partnerships Strategies Summit
July 25, 2017 in MA
World Congress

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[Guidance Overview]

Interesting Angles on the DOL's Fiduciary Rule, Part 45
"Financial Institutions (such as broker-dealers and IRA firms) should, between now and June 9, focus on the fiduciary processes that will be implemented by the home offices ... In a sense, the Financial Institutions will be co-fiduciaries with the advisers and, therefore, share responsibility for the recommendations that are made to the qualified accounts. As a result, Financial Institutions need to have protective policies, procedures and practices in place."


70-1/2 Year Olds NOT in Pay Status?

Sponsored by Pension Benefit Information, Inc.

Don't risk plan disqualification. Both the DOL and IRS are focused on RMD. Proactively address your deferred vested population with PBI's compliance based solutions. Give yourself peace-of-mind through a PBI auditable trail.

Despite Fiduciary Rule's Delay, DOL's Measure Has Spurred Changes
"More than six years have passed since the [DOL] first rolled out its fiduciary rule for the retirement industry ... [T]he mere threat of the federal rule going live -- along with a decade of class action litigation -- already has wrought changes to an industry more in the public view than ever before.... [S]ome observers predict many companies will adopt stricter standards for a simpler reason: good business."
Victoria Finkle, in The National Law Journal; free registration required

Five Things People Get Wrong About ERISA Fidelity Bonds
"An ERISA fidelity bond is not the same thing as fiduciary liability insurance.... You can't get an ERISA bond from just anybody.... Not every fiduciary needs to be bonded.... The plan can pay for the bond out of plan assets.... You can purchase a fidelity bond for more than the legally required amount."
National Association of Plan Advisors [NAPA]

Administrative Check-Up on Participant Plan Loans
"Make sure you understand whether certain documents, such as amortization schedules, remain available only for a short period of time on the recordkeeping platform, and if so, consider printing those out on a routine basis to keep in your plan records.... Check a sample or all of your plan loans to confirm that the terms are consistent with the plan's loan policy, that payment history tracks your plan loan remittance records, and that the year-end plan loan balance can be reconciled to the amortization schedule for that plan loan.... [V]erify that your recordkeeper is applying one of the two [permitted] calculations in determining the maximum available loan amount."
Poyner Spruill LLP

Are 401(k) Loans the Worst Possible Investment?
"Borrowers often lose the company match ... Job changes can force defaults ... Opportunity costs can be substantial ... Interest on a 401k loan is not tax-deductible ... Paying interest to yourself is not such a good idea ... Bad loans end up being made."
Lawton Retirement Plan Consultants


EPCRS: Correct Plan Errors and Minimize Penalties

Sponsored by Lorman and BenefitsLink

May 31 webinar will discuss common retirement plan errors and pre-approved methods of correction, as well as tips and practices that can help avoid future problems. Presented by Blake C. MacKay, of Alston & Bird LLP. BenefitsLink discount

Which 401(k) Strategies Work Best?
"The most effective tools in retirement savings are not bells and whistles. They are simple, quiet and consistent.... [1] Putting savings on auto-pilot.... [2] Higher savings rates.... [3] Keeping costs low."

Helping Small Businesses and Their Workers Save for the Future
"2 million small businesses with fewer than 100 employees already sponsor retirement plans for their employees. And among those that do, 70 percent of eligible employees choose to participate. A workplace retirement savings plan is an effective and easy way for a small business owner and his or her employees to save for a secure retirement. And there are many retirement savings options available for small business owners to choose from."
U.S. Department of Labor [DOL] Blog

Social Security Retirement Benefits and Private Annuities: A Comparative Analysis
"This issue paper explains some key features of Social Security retirement benefits, focusing on program funding; benefit payments to retired workers, their spouses, and survivors; and benefit taxation. It then discusses key features of private annuities, including funding and payments, types and features, and taxation. In addition, this paper gives examples of the premiums needed to replicate Social Security retirement benefits and discusses the variables that affect the amount of annuity income. Lastly, this issue paper explains some of the risks of both the Social Security program and the private annuity industry."
U.S. Social Security Administration [SSA]

Rime of the Dynamic Asset Allocation Mariner
"[DB plan] funding ratios are often 'as idle as a painted ship upon a painted ocean.' ... There are only three ways that the captain can work toward the comfort of full funding: [1] Return-seeking assets (wind) ... [2] Interest rate leveraging (tides) ... [3] Cash funding (rowing) ... The closer the plan gets to full funding, the more a duration matched bond strategy under LDI makes sense."
The Principal Blog

Illiquids: Many See Potential, But Few Take Action
"Illiquid investments are getting a closer look from some defined contribution executives seeking plan diversification as well as higher potential long-term returns. However, few DC asset owners are dipping their toes in the water, let alone diving in."
Pensions & Investments

Texas Senate Passes Bill Overhauling Houston's Troubled Pension Systems
"[The legislation provides that,] if the police or fire systems have less than 65 percent of the money they will need to cover future retirement costs after 2021, new employees will have to ... [enter] a cash balance plan.... Currently, the city's police system is funded at 62 percent, the firefighter fund at 81 percent and the municipal fund at 48 percent[.]"
The Texas Tribune

Why the Fiduciary Rule Applies to IRAs but Not Non-ERISA 403(b)s
"IRAs are subject to the Tax Code; and Section 4975 of the Internal Revenue Code address prohibited transactions between IRAs an 'disqualified persons' including fiduciaries. The section then goes on to define to define a fiduciary to include any person designated as a fiduciary under ERISA. It is this basis that the DOL is using to affirm that its definition of what constitutes a fiduciary applies to Section 4975 of the Code as well."

The Aftermath of DOL's Assessment on the Quality of Financial Statement Audits
"6,806 of the 7,330 firms (93% of the audit firms) that audit retirement plans audit fewer than 25 plans. If your auditor falls in these categories, there is approximately a 70% chance that your plan audit is in some way deficient.... The question becomes how does a plan sponsor find an auditor that provides the most value for every unsatisfying audit dollar expended?"
Belfint Lyons & Shuman, CPAs

Benefits in General

Five Ways to Motivate Millennials Through Employee Communication
Infographic. "Millennials make up close to 40% of the United States workforce. However, less than one-third of them are engaged at work. Encouraging Millennials to take action concerning their employee benefits can be a difficult task. Fortunately, there are several communication tactics organizations can use to motivate even the most uninterested Millennial."
Milliman Retirement Town Hall

When All Is Said and Done, Will Tax Reform Spare Employee Benefits?
"While the president's plan is silent on the tax treatment of health care premiums, it does call for ... the elimination of the ACA's 3.8 percent net income investment tax, which applies to taxpayers with a modified adjusted gross income of more than $200,000 for single filers and $250,000 for married couples filing jointly.... [That] tax hits small business owners hard, since their business earnings are often treated as personal income, and is a drag on economic growth."
Society for Human Resource Management [SHRM]

Discussions on
the BenefitsLink Message Boards

FAS87 ASC715 Discount Rates and Moody's Rates
This message thread includes an unofficial monthly report of Moody's Daily Long-term Corporate Bond Yield Averages and Moody's Daily Treasury Yield Averages, used for benchmarking by some corporate pension plans. The most recent entry reports data as of April 28, 2017. [BenefitsLink hat tip to David Rigby, who has provided this update every month since January, 2005.]
BenefitsLink Message Boards

Press Releases

Kenneth Raskin Elected to Chair the PSCA Board
PSCA [Plan Sponsor Council of America]

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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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