Retirement Plans Newsletter

June 22, 2017

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Employee Benefits Jobs

Consultant / Client Service Representative
Associated Pension Consultants
in CA

Regional Client Manager
Ameritas Life Insurance Company
in TX, Telecommute

Client Services Manager - Retirement Plans
Ameritas Life Insurance Company
in NE, OH

Research and Business Development Associate
The Segal Group
in MA

Actuary
Summit Benefit & Actuarial Services, Inc.
Telecommute

DB Administrator
Summit Benefit & Actuarial Services, Inc.
Telecommute

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Webcasts and Conferences

Out-of-Network ERISA Claims after North Cypress Medical: Identifying Provisions Subject to Provider Challenge
RECORDED
Strafford

Coverage in an Evolving Market The Future of Health Insurance
RECORDED
Alliance for Health Reform

Sun Life Summit 2017 - How To Reach An Ever-More-Diverse Workforce
RECORDED
Sun Life Financial

How to Avoid Claims of Disability Discrimination: The Road to Reasonable Accommodation
July 11, 2017 in CA
Liebert Cassidy Whitmore

Cutback the Complexity! Making Sense of the Anti-Cutback Rules
July 19, 2017 WEBCAST
ASPPA [American Society of Pension Professionals & Actuaries]

Top 10 FMLA / CFRA Policy Mistakes: How To Avoid The Most Hazardous Compliance Tripwires
July 19, 2017 WEBCAST
HRTrainingCenter.com

Basics of Traditional IRAs - Distributions
July 25, 2017 WEBCAST
Collin W. Fritz & Associates, Ltd.

ERISA's Latest Developments
July 25, 2017 WEBCAST
ftwilliam.com

Structuring Executive Compensation Clawback Policies: Trends, Regulatory Developments and Tax Ramifications
August 2, 2017 WEBCAST
Strafford

401k / 403b Retirement Plans Boot Camp
August 16, 2017 WEBCAST
ISCEBS - North California Chapter

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Discussions

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New Comments and Topics

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[Advert.]

Online Learning Course: 401(k) Plan Structure

Sponsored by International Foundation of Employee Benefit Plans [IFEBP]

This course looks at the many aspects to consider when structuring a 401(k) plan. Topics include salary deferral limits and catch-up contributions, matching and profit-sharing contributions, nondiscrimination testing and safe harbors.


DOL Advisory Opinion Demonstrates Structure for Bundling Plans
"[Although DOL Advisory Opinion AO 2017-01A] specifically opines on health plans, ... [it] matters much in the retirement market: it demonstrates that the scale we seek is not exclusively the purview of the MEP. Vendors have the ability to safely 'bundle administrative services' to the same effect of a MEP, provided that they have enough scale on their own to negotiate the sort of investment pricing and expert services which the market seeks. There are product designs which can facilitate these types of arrangements as well, such as insurance company pooled separate accounts and collective trust arrangements, if they are properly priced."
Business of Benefits

Voya Scores Win in ERISA Suit Over Robo-Adviser Fees
"The investor, a participant in Nestle USA Inc.'s 401(k) plan who filed a proposed class action, can't use [ERISA] to challenge Voya's fees, a federal judge ruled June 20. That's because Voya wasn't acting as an ERISA fiduciary when it negotiated the fees for Financial Engines' advisory services, the judge said." [Patrico v. Voya Financial, Inc., No. 16-7070 (S.D.N.Y. June 20, 2017 ]
Bloomberg BNA

The Search for a Long Term Investment Premium
16 pages. "[This paper identifies] eight building blocks of value creation via long-horizon investing.... [A]smaller asset owner focusing its long-horizon efforts on avoiding costs and mistakes can see an increase in investment returns of about 0.5% a year. A larger fund with the governance and financial resources to consider all available options for capturing premia could see a net uplift to returns of around 1.5% a year."
Willis Towers Watson

Potential Impact of Tax Reform on Employees' Retirement Savings
"Three-fourths of [the 443 defined contribution plans represented in this recent survey of plan sponsors] currently offer a Roth feature to employees with thirty percent reporting 10-20 percent of eligible employees making Roth contributions ... Sixty percent of employers who don't currently offer a Roth feature have evaluated offering it and chose not to. Of those not offering Roth, 80 percent are concerned with the cost and administrative complexity of adding Roth.... Eighty-five percent of plans are likely to, or would definitely continue offering a plan if Congress decreases pre-tax savings limits. This drops to 70 percent of plans if Congress changes the laws to Roth only."
Plan Sponsor Council of America [PSCA]

[Advert.]

The WBC - Regulatory Rollercoaster: Are You Ready for the Ride?

Sponsored by ASPPA and WP&BC

The Western Benefits Conference is the only Annual, Multi-day, Comprehensive Employee Benefits Conference west of the Rockies. Highly interactive sessions, Thought leaders, Practical industry leading ideas, Networking, Valuable CE credits and more!


Making ESG a Part of Your DC Plans: Sustainability Could Help Plan Participants Reach Their Goals (PDF)
"[Environmental, social, and corporate governance (ESG)] options in a DC plan could make plan participants more successful investors by getting them to contribute earlier or contribute more to their retirement plan.... Just as they do as consumers, plan participants may also want to express their values through their investments and receive the emotional benefits they get from feeling like they are doing something good and impactful with their money.... Rather than discourage normal behavior, therefore, DC plans should encourage it by adding ESG options to their lineups."
Morningstar

Retirement Assets Total $26.1 Trillion in First Quarter 2017
"Assets in [IRAs] totaled $8.2 trillion at the end of the first quarter of 2017, an increase of 4.1 percent from the end of the fourth quarter of 2016. [DC] plan assets were $7.3 trillion at the end of the first quarter, up 3.7 percent from year-end 2016. Government [DB] plans ... held $5.5 trillion in assets as of the end of March, a 2.1 percent increase from the end of December. Private-sector DB plans held $3.0 trillion in assets at the end of the first quarter of 2017, and annuity reserves outside of retirement accounts accounted for another $2.1 trillion."
Investment Company Institute [ICI]

The $4 Trillion Pension Problem
"Earlier this month, the $20.2 billion Los Angeles Fire and Police Pension System lowered its assumed rate of return by a quarter of a percentage point to 7.25 percent. This seems like a fairly minor and obvious move.... But the fund's relatively minor adjustment will probably cost taxpayers $27 million in additional contributions to help make up the shortfall in fiscal year 2018 alone."
Bloomberg

Pension Plan Procrastination Perils Proper Personal Planning
"The conventional wisdom is that you can wait until the end of the year to put a retirement plan in place since you can still get the tax benefits for the whole year.... Let's say you're a shareholder-employee of an S-corporation; and you're one of those shareholder-employees who minimizes W-2 compensation for payroll tax reasons. The remaining available dollars ... are not subject to FICA tax and are not considered self-employment income subject to self-employment tax. Thus, minimizing W-2 income also minimizes the basis upon which retirement benefits can be provided."
The Retirement Plan Blog

Retirement Security is Particularly Challenging for Latino Workers
"[O]nly a third of Latino workers have access to a retirement savings plan through their employer, lower than for any other demographic group.... Latino retirees, both men and women, live longer than any other demographic group.... When long lifespans are combined with low savings rates, it makes retirement security particularly difficult to achieve."
National Public Pension Coalition

Benefits in General

[Official Guidance]

IRS Now Accepting Renewal Applications for ITINs Set to Expire by End of 2017
"The agency urges taxpayers affected by changes to the [Individual Taxpayer Identification Number (ITIN)] program to submit their renewal applications as soon as possible to avoid the rush. In the second year of the renewal program, the IRS has made changes to make the process smoother for taxpayers. The renewal process for 2018 is beginning now, more than three months earlier than last year." [Also available: 2017 Form W-12, Preparer Tax Identification Number (PTIN) Application and Renewal]
Internal Revenue Service [IRS]

Executive Compensation
and Nonqualified Plans

Intricate Mix of Restricted Stock, Performance Shares, and Stock Options in LTI Vehicles
"While the rise of restricted stock/RSUs and performance shares, along with the relative decline of stock options, has been well documented for many years, ... stock options have not disappeared but are often being granted to supplement full-value awards such as restricted stock and performance shares, especially in long-term incentives (LTIs) designed for executives."
myStockOptions.com

Discussions on
the BenefitsLink Message Boards

Fixing a Failure to Issue Form 1099 Due to Defaulted Loan
"Employee defaults on loan in 2016. No Form 1099 was issued for the resulting deemed distribution. Participant didn't realize the default caused a deemed distribution for income tax purposes, so his 2016 tax return was filed incorrectly. Should the employer/plan administrator/TPA/guilty party pony up the expense of refiling the 2016 return and reimburse the employee for any interest or penalty charges?"
BenefitsLink Message Boards

Adding Auto-Enrollment to a 403(b) Plan
"A 150-employee not-for-profit org with a ERISA-governed 403(b) plan wants to add auto-enrollment. I figure the employer will want to go the EACA route because it's not going to want to do the required QACA contribution. Also sounds like it wants to allow participants make 90-day withdrawals. There doesn't seem to be anything else that would pose an issue in this situation. Anything I'm missing?"
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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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