Retirement Plans Newsletter

June 9, 2017 logo logo
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Employee Benefits Jobs

Webcasts and Conferences

Multiple Employer Plans (MEPs)

FMLA Compliance Review: Step-by-Step Guidance to Reduce Employee Abuse & Minimize Potential Employer Liability

Medicare and Employer-Sponsored Health Plans: Know the Rules and Avoid Problems
June 13, 2017 WEBCAST

Get Ready: Chicago and Cook County Paid Sick Leave Laws Take Effect on July 1, 2017
June 13, 2017 WEBCAST
Ogletree Deakins

Plan Restatements & Amendments
June 15, 2017 WEBCAST

Roles and Responsibilities in an ESOP Company
June 28, 2017 WEBCAST
Ohio Employee Ownership Center

Policy Forum: HSA-eligible Health Plans and HSAs
July 12, 2017 in DC
EBRI [Employee Benefit Research Institute]

Plan Mergers & Acquisitions
July 20, 2017 WEBCAST

457(b) Plans for Governmental & Tax Exempt Entities
September 14, 2017 WEBCAST

Current Developments (2017)
November 2, 2017 WEBCAST

Ethical Considerations for Employee Benefit Practitioners (2017)
December 7, 2017 WEBCAST

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New Comments and Topics

All Topics, Grouped by Forum

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[Official Guidance]

Text of IRS Notice 2017-34: Weighted Average Interest Rates, Yield Curves, and Segment Rates Applicable for June 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)."
Internal Revenue Service [IRS]


Online Learning Course: Fiduciary Responsibilities for ERISA Plans

Sponsored by International Foundation of Employee Benefit Plans [IFEBP]

Get the information you need to understand the requirements of ERISA, including penalties, vesting requirements, fiduciary responsibilities, plans covered by the PBGC, and the roles of the various enforcement agencies.

[Guidance Overview]

Impact of the DOL Fiduciary Rule on Unregistered Investment Funds
"As a practical matter, fund sponsors marketing to large plans, and IRAs and smaller plans with a professional adviser, will not be impacted by the new Fiduciary Rule by satisfying the [Investment Fund] Exception ... However, fund sponsors that market to IRAs and smaller plans without a professional adviser will need to consider whether they will continue to market to such investors."
Goodwin Procter

House Passes Bill to Replace Dodd-Frank, Repeal DOL Fiduciary Rule
"Legislation replacing much of the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed by the House on [June 8], along party lines by a vote of 233-186. The Financial CHOICE Act makes substantial changes at the [SEC] and other financial regulator ... The bill would also repeal the [DOL's] new fiduciary rule until the SEC produces its own standard[.]"
Pensions & Investments

Highest Court Recognizes Highest Power: Church-Owned Businesses Secure Supreme Court Win (PDF)
"[T]he Supreme Court has overturned decisions at both district and appellate levels and from the Third, Seventh, and Ninth circuits, which had taken a seemingly rogue view that ERISA's plain text required that a church be the sponsor of the plan for the plan to qualify for the church plan exemption.... For churches and their affiliates, this legal victory essentially means things return to the status quo of the past 30 years. But it is important that church plan sponsors do not mistake 'exempt from ERISA' for 'absolved of fiduciary responsibility.' " [Advocate Health Care Network v. Stapleton, No. 16-74 (U.S. June 3, 2017)]

Quantifying the Impartial Conduct Standards Under the DOL Fiduciary Rule
"While the 'misleading statements' standard is self-explanatory, it has been suggested that it will be left to the courts and attorneys to define the meaning of 'best interest' and 'reasonable compensation.' ... [J]ust as the courts look to the Restatement (Third) of Trusts to interpret fiduciary law, advisers and other investment fiduciaries can, and should, look to the Restatement for guidance as the interpretation of both terms."
The Prudent Investment Adviser Rules

DOL Fiduciary Rule Starts to Take Effect Today
"Unless the new fiduciary rule is repealed or replaced, it's critical for 401(k) plan sponsors to take it seriously. They should assess their current relationships and determine the relative risks associated with them in light of the fee provisions that the fiduciary rule addresses. While plan sponsors won't be able to determine the exact nature of their potential liability, they will at least be in a position to take an inventory of their possible exposure."
Society for Human Resource Management [SHRM]

Defining 'Reasonable Comp' Under the DOL Fiduciary Rule
"The best way for financial advisors to think about 'reasonable compensation' in the fiduciary sense is to imagine a scatter graph. And the best place to be on that graph is the dot in the middle of the pack of other dots.... Consulting firms and benchmarking companies have plenty of data that will help guide advisors stay in the middle of the scatter graph pack."


ARA Comments to IRS on Mid-Year Amendments to Safe Harbor 401(k) and 403(b) Plans (PDF)
"ARA recommends the expansion of the guidance contained in IRS Notice 2016-16 to include ... [1] Clarify a plan sponsor involved in a IRC 410(b)(6)(c) transaction may amend a safe harbor 401(k) plan to cover other members of the newly formed group and retain all the protections and benefits of the safe harbor 401(k) plan. [2] Clarify the plan can be amended to increase non-safe harbor contributions, other than matching contributions, at any time during the year. [3] Provide the restrictions in Notice section III.D.4 apply only to the safe harbor matching contributions and not to other matching contributions subject to non-discrimination testing."
American Retirement Association [ARA]


The Disturbing Trend That Will End in a Full-Fledged Pension Crisis
"Though the challenges are well known by now, many believe that public-sector pension funds will be maintained and the gaps filled by strong investment returns, increasing employee contributions, raising taxes, or some combination of the three. They hope with these measures and ongoing strong asset returns, liabilities can be reduced and pensions salvaged. Unfortunately, this is wishful thinking at best."
Olivier Garret, via Forbes


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Benefits in General

[Guidance Overview]

DOL Withdraws Independent Contractor and Joint Employer Guidance
"The rescinded [Administrator's Interpretations (AIs)] -- a 2015 AI addressing the tests for employee/independent contractor classification and a 2016 AI addressing joint employment liability -- deliberately pushed the envelope in favor of expanding liability under the [FLSA]. The DOL's independent contractor AI, for example, concluded that 'most workers are employees' and advocated for a revised 'economic realities test' for employee/contractor status that tipped the scales decidedly in favor of employee status. Later in 2016, the DOL similarly articulated a broad view of joint employer coverage -- even in situations where little or no traditional indicia of control exists between two entities. Both AIs were withdrawn, effective immediately upon the DOL's June 7 announcement."
Morgan Lewis

Executive Compensation
and Nonqualified Plans

How Long Should Former Employees Have to Exercise Stock Options?
"As Uber has recently discovered, having an exercise window that is too brief can leave former employees unable to purchase stock and disincentivize current employees.... Most start-ups provide around 90 days for ex-employees to exercise their options."
Butterfield Schechter LLP

Discussions on
the BenefitsLink Message Boards

Bottom-Up QNECs
"I have a question about bottom-up QNECs. Let's say the employer wants to give a 5% QNEC to the employees because of a failed ADP test. Does the employer have to give the first contribution to the lowest-paid employee, then to the 2nd-lowest-paid employee, etc. until the test is passed, OR is the employer permitted to give the QNEC to anyone?"
BenefitsLink Message Boards

Spousal Benefits Required Under a FICA Replacement Plan?
"Client is a local government entity that has a FICA replacement plan, so employees who participate in the plan don't pay into Social Security OASDI or receive those benefits. The requirements for replacement plans are framed in terms of what an employee must receive. Is there any requirement that a replacement plan provide spousal benefits?"
BenefitsLink Message Boards

Fiduciary Rule as Applied to Rollover IRA Service Providers
"Does the new Fiduciary Rule includes a duty to monitor IRA service providers that might take rollovers from plan participants?"
BenefitsLink Message Boards

Press Releases

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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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