Retirement Plans Newsletter

June 29, 2017 logo logo
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Employee Benefits Jobs

Webcasts and Conferences

Rules for Wellness Plan Incentives
Clear Law Institute

What IT Service Providers Need to Know About HIPAA
June 29, 2017 WEBCAST
Womble Carlyle

Evaluating and Creating Requests for Information and Requests for Proposals (RFP)
July 11, 2017 WEBCAST
Online Compliance Panel

2017 ECFC Annual Symposium
August 2, 2017 in MO
Employers Council on Flexible Compensation

EPCRS Part II - Correction Tips and Tricks
August 3, 2017 WEBCAST

Form 5500 Workshop
September 14, 2017 in WA
FIS Relius Education

ERISA Workshop
September 15, 2017 in WA
FIS Relius Education

36th Annual ISCEBS Employee Benefits Symposium
September 17, 2017 in CO
ISCEBS [International Society of Certified Employee Benefit Specialists]

View All Webcasts and Conferences

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[Guidance Overview]

Interesting Angles on the DOL's Fiduciary Rule, Part 53
"[M]any broker-dealers and RIAs do not understand how the prohibited transaction rules and exemptions (and, particularly, the Best Interest Contract Exemption) apply differently to discretionary accounts and non-discretionary accounts. This article discusses some of those differences.... BICE cannot be used for prohibited transactions that result from discretionary investment management.... As a result, many -- and perhaps most -- financial conflicts (that is, prohibited transactions) that result from discretionary investment management decisions are absolutely prohibited, because there are not exemptions for the conflicted payments."


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Puerto Rico Law Liberalizes Retirement Plan Rules (PDF)
"By providing broader, more flexible options and reducing administrative burdens, the Puerto Rico government hopes to encourage small businesses to offer retirement plans and increase participation in existing retirement plans. The new law includes adjusted contribution and employer deduction limits, a revised definition of highly compensated employee, and a new safe harbor rule. Clarification on beneficiary designations and trusts is also provided."

The QDIA (R)evolution
"New regulations, economic downturns, and an increase in legal action have motivated many plan sponsors and advisors to seek opportunities to increase their fiduciary protection through Qualified Default Investment Alternatives (QDIAs). [This infographic provides] a brief history of the evolution of the [QDIA] as a protection against fiduciary risk, the growth in regulation promoting their use, and the rise in popularity of target date funds as the primary QDIA choice for employer-sponsored retirement plans."
American Century Investments

Outsourced Chief Investment Officers: Challenging Five Common Myths
"For plans that do not have in-house investment capabilities, the ... outsourced chief investment officer (OCIO) is a means of filling the gap between the resources required to run efficient investment strategies and the typically constrained governance budget of a pension plan. The delegated manager implements an investment strategy within boundaries set by the investment or pension committee ... [A] number of myths have arisen around this model... [1] An OCIO leads to loss of control ... [2] An OCIO is a conflicted model ... [3] An OCIO is a new and untested concept ... [4] An OCIO is only for plans of a certain size ... [5] OCIO is expensive."
Willis Towers Watson

Fiduciary Rule May Go Away, but States Are Stepping In
"[S]tates are gearing up to enhance their own investor protections if the DOL fiduciary rule falls through.... Nevada amended its financial planners law to remove an exemption from fiduciary requirements for investment advisers, adviser representatives, broker-dealers, and sales representatives.... New York and California could be next in line to update their fiduciary laws to protect investors from conflicted advice[.]"
Bloomberg BNA


Online Learning Course: 401(k) Plan Administration - BenefitsLink Discount

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Learn more about plan design issues, plan investments, fiduciary responsibility and plan fees, employee communications and investment education, automatic enrollment, participant loans, distributions, and plan amendment and termination. Use code BL2017 for 15% discount - good through July 31.

401(k) Self-Dealing Suit Filed Against Waddell & Reed
"The complaint alleges that, instead of acting for the exclusive benefit of the 401(k) plan and its participants and beneficiaries, the defendants ... [forced] the plan nearly exclusively into investments managed by WR Financial or an affiliated entity, which charged excessive fees ... and which performed worse than comparable available options. The lawsuit says the defendants could have chosen nonproprietary, less costly, better-performing investment options for the plan."

Using Retirement Benefits to Solve the Challenge of Hospital Sector Employment
"[H]ospitals, perhaps more than any other classification of employer in the U.S., have particularly interesting challenges when it comes to attracting and retaining their employees, mostly professionals. And, as hospital organizations have become a primary employer of physicians, the difficulties only increase.... You need a solution that meets all of these criteria: [1] Costs are stable; [2] Ability for very high-paid people to defer significantly is there; [3] Nondiscrimination testing is easy to pass; [4] Benefits are portable; [5] Both lump sums and wholesale priced annuities (annuities from the plan as compared to from a mutual fund provider or insurer) are available."
Benefits and Compensation with John Lowell

Catching Up with Recordkeeper Technology
"[F]or the vast majority of the plan sponsors ... when a participant clicks on the portion of the website that requires salary deferral information, they are directed back to their employer, where they are then requested to complete a paper form.... [A] significant number of participants never bother to follow through with the paperwork when their online enrollment process is disrupted in this fashion. The reason for this technology lag on the part of the plan sponsor is simple: deferral elections require an exchange of data between the recordkeeeper and the plan sponsor, and that data interface has simply not been built.... What can be done to address these and other examples of technology lag (which often involve data interfaces)?"
Cammack Retirement Group

Military Benefit Allows Widows to Put $500K Into Roth IRA at One Time
"Under the Heroes Earning Assistance and Relief Tax Act, which was introduced under President George W. Bush, the entirety of a service member's $400,000 life insurance policy, plus an additional $100,000 for a combat-related fatality, can be rolled directly into a Roth. 'If every potential penny went in, a survivor could contribute $500,000 into a Roth,' [one advisor] said. 'That means, for a young widow, their retirement could be set. But there is obviously some financial advice needed.' "


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How to Protect Your Retirement Savings from a Crash
"[1] Check that your investments are aligned with your risk tolerance ... [2] Don't invest anything you'll need within five years ... [3] Eliminate as much debt as possible ... [4] Prepare for the worst."

Benefits in General

2017 Guide to Reporting and Disclosure for Employee Benefit Plans (PDF)
72 pages. "The Guide is intended to be useful in [1] identifying forms to be filed and distributed annually; [2] developing controls for compliance, including an internal calendar for reporting and disclosure; [3] determining and coordinating reporting and disclosure responsibilities for plan sponsors, their actuaries, attorneys, and accountants; [4] identifying special reporting and disclosure requirements for plan implementation, amendment, termination, etc.; [5] evaluating administrative considerations in establishing a new or supplemental plan; [6] advising on responsibility for compliance with reporting and disclosure rules."

Proving Loss Causation in Breach of Fiduciary Claims: The Circuit Split Widens (PDF)
"[M]ost circuit courts of appeals agree that ERISA requires that causation between the alleged breach and the claimed loss must be established before any liability may be imposed upon a breaching fiduciary. The courts are split, however, as to whether an ERISA plaintiff or the defendant-fiduciary bears the burden of proving the causal link between breach and loss. In other words, does the burden compose an element of the claim and thus fall upon the plaintiff, or does the burden constitute an affirmative defense and thus fall upon the defendant-fiduciary?"
Jackson Lewis P.C., via Bloomberg BNA Pension & Benefits Daily

Understanding How Health Care Costs Can Impact Your Retirement Readiness (PDF)
13 pages. "Medicare data put spending per capita at age 70 at about $7,566, increasing at 80 to $11,618 and more than doubling from ages 70 to 96 to $16,145.... 77 percent of baby boomers and 75 percent of retirees have never estimated the amount of health care expenses they expect to incur throughout retirement.... This lack of preparedness is exacerbated by expectations that national health care spending will grow by 5.8 percent on an average annual rate basis from 2012 to 2022."
Voya Financial

Executive Compensation
and Nonqualified Plans

CEO Pay Packages See Largest Increase Since 2013
"The healthcare sector reported the largest CEO pay packages in 2016 at a median $13.3 million. Median value of stock awards climbed more than 9% between 2015 and 2016, and 43% since 2012. On average, CEOs received about 32% of total reported compensation in cash, 65% in equity and 3% in other compensation in 2016."
Meridian Compensation Partners, LLC

Discussions on
the BenefitsLink Message Boards

295 Free Webcasts on Retirement Plans! Online Directory Upgraded
"The BenefitsLink elves have been busy lately, cobbling together an improved version of our online directory of webcasts and conferences for employee benefits practitioners. The directory shows upcoming webcasts and conferences from many different firms, and shows hundreds of recorded webcasts available for immediate viewing."
BenefitsLink Message Boards

Attorney Demands Full Vesting for Client Despite Terms of Plan Document
"Plan gets letter from disgruntled ex-participant's attorney, demanding that the plan provide full vesting for the employer's matching contribution (not otherwise fully vested under the terms of the plan). Employer replies that it must operate the plan in accordance with the plan document and provides an SPD. Attorney demands proof that the plan can't make an exception. How to reply?"
BenefitsLink Message Boards

Separate Form 945 for Tax Withholdings on Distributions from Separate Plans?
"I have an individual client who maintains two plans for his business, and has had tax withheld due to distributions from each plan. Should these be reported by the plans on one Form 945 (they use the same EIN number), or do we file two separate forms?"
BenefitsLink Message Boards

Press Releases

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David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

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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