Retirement Plans Newsletter

July 6, 2017

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Enrolled Actuary Remote
Expanding Nationwide TPA Firm
in CA, Telecommute

Retirement Plan Administrator
Guidant Financial
in WA, Telecommute

Retirement Plan Administrator
Benetrends, Inc.
in PA

Counsel, Employee Benefits
Discover Financial Services
in IL

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Webcasts and Conferences

ASB Exposure Draft on EBP Reporting
July 10, 2017 WEBCAST
AICPA

IRA Update 2017
July 18, 2017 WEBCAST
Collin W. Fritz & Associates, Ltd.

ERISA Basics Part I: For Employees ERISA Plans - Advising Participants and Beneficiaries About Their Rights and Responsibilities
July 18, 2017 WEBCAST
American Bar Association Section of Real Property, Trust and Estate Law

Paid Family Leave Benefits Are Coming to New York: What Employers Need to Know Now
July 19, 2017 in NY
Nixon Peabody LLP

Strategies For Managing FMLA Abuse & Catching The 'FMLA Gamers' Who Are Manipulating The System
July 25, 2017 WEBCAST
HRTrainingCenter.com

GASB No. 74 & 75: Best Practices in OPEB Accounting & Auditing
July 27, 2017 WEBCAST
AICPA

ERISA Reporting and Disclosure Requirements
July 27, 2017 WEBCAST
Cowden Associates, Inc.

EPCRS Part II - Correction Tips and Tricks
August 15, 2017 WEBCAST
ERISApedia.com

S Corporation ESOPs: Administrative Issues
September 5, 2017 WEBCAST
National Center for Employee Ownership [NCEO]

S Corporation ESOPs: Valuation Issues
September 12, 2017 WEBCAST
National Center for Employee Ownership [NCEO]

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[Guidance Overview]

IRS Form 14581-E: Retirement Plan Coverage Compliance Self-Assessment for State and Local Government Entities (PDF)
"The self-assessment tools are designed to help public employers identify areas that indicate potential compliance issues. They are intended to be completed by those responsible for withholding and paying employment taxes and filing required information returns. Each topic contains brief information on the law with links to IRS publications and other authoritative resources that provide more information." [June 2017]
Internal Revenue Service [IRS]

[Advert.]

Join ASC's New CE Webcast: Plan Mergers & Acquisitions

Sponsored by ASC

Mergers and acquisitions are among the most confusing areas for qualified plans. Join ERISA Expert John Griffin, J.D., LL.M to learn how to deal with plan mergers and acquisitions methodically and thoroughly. Click here to register!


Hospitals' Supreme Court Victory Leaves Unresolved Questions for Church Plan Sponsors
"The Supreme Court did not address two important additional questions related to the church plan analysis. These questions will almost certainly be litigated by future plaintiffs against church-related organizations that establish and maintain church plans. The Court also did not decide the case on constitutional grounds, leaving open the opportunity for plaintiffs' counsel to continue to make the argument that the church plan exemption from ERISA is itself unconstitutional under the First Amendment's Establishment Clause." [Advocate Health Care Network v. Stapleton, No. 16-74 (U.S. June 3, 2017)]
Ice Miller LLP

The Top Five Mistakes Made by 401(k) Plan Sponsors
"[T]he most common mistakes ... as well as ways for plan advisers to guide their clients away from those mistakes.... [1] Not remitting payroll in a timely manner ... [2] Not following the plan document correctly ... [3] Not benchmarking plan fees ... [4] Not selecting a quality auditor ... [5] Not documenting the reason for changes."
InvestmentNews

Pioneer Natural Resources Participant Suit Alleges Unreasonably Expensive Investment Options in 401(k) Plan
" 'Instead of leveraging the plan's bargaining power to benefit participants and beneficiaries, the Pioneer defendants chose inappropriate, higher-cost mutual fund shares classes,' said the June 28 complaint filed in U.S. District Court in Denver ... These actions 'caused the plan to pay unreasonable and excessive fees for record keeping and other administrative services.' The complaint said the Pioneer Natural Resources USA Inc. 401(k) and Matching Plan had $500.2 million in assets as of Dec. 31, 2015."
Pensions & Investments

Fidelity, American Century Adopting New Target Date Fee Tactic as Cost Pressures Grow
"The two asset managers are the first among their peers to switch to a 'single fee' management structure in their target-date mutual funds, analysts said. This structure allows the firms to charge a fixed fee for their funds, irrespective of the underlying funds that make up the portfolios. Target-date managers have historically used an 'acquired fee' model, whereby firms determine the cost of the overall portfolio based on the asset-weighed cost of the underlying funds."
Pensions & Investments

[Advert.]

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

Sponsored by International Foundation of Employee Benefit Plans [IFEBP]

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.


Making Sure 401(k) and 403(b) Fees Are 'Necessary' and 'Reasonable'
"You should create a master list of items you want to see addressed by each respondent. This can, essentially, be the items in your RFP. You'll want to create a fairly detailed spreadsheet to analyze the fee component of the proposals." [The authors provide a list of items to consider.]
Fiduciary Plan Governance, LLC

Trump's DOL Backs Fiduciary Rule in Legal Brief
"Acosta's DOL defended the Best Interest Contract Exemption in its entirety.... The DOL brief deviated in one respect from the Obama administration: The BIC exemption's condition restricting class action waivers should be vacated as it applies to arbitration clauses ... There was some speculation, with the Donald J. Trump administration's anti-regulation push, that the DOL would simply decline to defend the fiduciary rule. With Monday's brief, Acosta squashed that notion. The brief maintained the DOL stance that variable and fixed indexed annuities are too complicated to be sold without investor protections."
InsuranceNewsNet.com

LPL Financial's Fiduciary Rule Memo to Reps Implies Deeper Message: Become an RIA or Stand Down on Giving Rollover Advice
"LPL Financial is taking steps to avoid accusations of placing big DOL pitfalls in the path of its brokers -- but in doing so could also be creating two categories under its roof: haves and have-nots.... [The] firm last week sent a memo to its 14,000 advisors with a bare-bones directive regarding the [DOL's] dictates about brokers recommending 401(k) rollovers to clients. The move comes as the IBD announces a massive structural change that brings its 401(k) business more under the purview of its main retail business."
RIABiz

IRS Delay in Implementing New Mortality Tables Affects Pension Liability Valuation
"Sponsors should expect to see their IRS funded status decline in 2018 to roughly the same amount as they saw their accounting funded status decline when RP-2014 was first used on their financial statements ... [P]lan sponsors can expect a 'double whammy' in 2018 as a result of variable-rate PBGC premiums. They will face both higher rates per $1,000 of underfunding from the previous legislation and new, greater levels of underfunding due to the IRS adopting the new mortality tables ... [T]he reality of increased longevity and longer-term retirements may lead some employees to work beyond a pension plan's 'normal retirement age,' offsetting somewhat the increased liabilities brought about by the latest mortality assumptions."
HRDailyAdvisor

The Importance of Retirement Investing Over Saving for Older Employees
"Let's say I am a mid-to-late career employee who has a $1 million account balance.... If my $1 million has a modest annual return rate of 5%, I will earn $50,000 on it in the coming year. That greatly exceeds the maximum annual amount of $24,000 (presuming I am over age 50) that I can save in my 401(k)/403(b). In addition, due to the time-value of money, that $24,000 maximum contribution has less time to compound, and becomes an even smaller portion of my $1 million+ account balance in future years. At this point, therefore, how I invest becomes far more critical than how much I save."
Cammack Retirement Group

ERISA Bond: What Is It and Do I Need One?
"Although the bonding requirements generally apply to most ERISA retirement plans (and many funded welfare benefit plans), the ERISA bonding requirements do not apply to plans ... which are owner only, 'solo k', plans or to employee benefit plans that are completely unfunded ... [E]very person who 'handles funds or other property' of an employee benefit plan is required to be bonded unless covered by an ERISA exemption.... A person is deemed to be 'handling' funds or other property of a plan whenever his or her duties or activities could cause a loss of plan funds or property due to fraud or dishonesty, whether acting alone or in collusion with others.... [T]here is no conflict created if the plan pays for the ERISA Bond."
Legacy Retirement Solutions

[Opinion]

Raising the Cap on 401(k)s Won't Solve Retirement Crisis
"Certainly, some people would contribute more to their 401(k)s or IRAs if they were able, but the evidence suggests that the people who would do that are those with incomes above $100,000 per year. Very few people with incomes below that level are contributing the maximum amount at the current levels. It seems very unlikely that they would suddenly increase their contributions above the current levels just because they would be able to."
National Public Pension Coalition

Benefits in General

Dive in Plaintiff Victories Not Seen in ERISA Cases
"The number of ERISA cases studied -- which included only those resolved by judicial action and not through settlement or voluntary dismissal -- jumped from 1,477 cases terminated in 1985 to 3,019 cases terminated in 2009.... [A] 2012 research paper found that just over half the ERISA cases filed between 2006 and 2010 involved claims for multiemployer benefit fund contributions."
Bloomberg BNA

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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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