Retirement Plans Newsletter

July 12, 2017

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Client Services Manager
Alerus Financial
in MN

New Business Onboarding Coordinator
Retirement Plan Consultants LLC
in CO, IA, IL, IN, KS, MN, MO, ND, NE, OH, OK, SD, WI, WY, Telecommute

1099 Contract Relius Product Support Technician
Retirement Plan Consultants LLC
Telecommute

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Webcasts and Conferences

Affordable Healthcare – Redesign Your Plan for Cost Savings
RECORDED
ConnectYourCare

Intermediate IRA Training Part 1
July 18, 2017 WEBCAST
Wolters Kluwer

ACA Repeal / Replace: Congressional Actions and Your Business
July 20, 2017 WEBCAST
Alegeus

Intermediate IRA Training Part 2
July 20, 2017 WEBCAST
Wolters Kluwer

New York Paid Family Leave - What You Should Know and What You Should Be Doing Now
July 25, 2017 WEBCAST
Bond, Schoeneck & King, PLLC

Employee Benefit Plans Virtual Conference
August 2, 2017 WEBCAST
Thomson Reuters

HSAs and Consumer-Driven Health Care: What’s New & What’s Next?
August 16, 2017 WEBCAST
Thomson Reuters / EBIA

Practical Plan-Sponsor's View of the Final Fiduciary Rule
August 31, 2017 WEBCAST
American Bar Association Joint Committee on Employee Benefits [JCEB]

ERISA Summary Plan Descriptions
September 14, 2017 WEBCAST
Clear Law Institute

2017 CCA Annual Meeting
October 22, 2017 in FL
Conference of Consulting Actuaries

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Discussions

New Topics on the BenefitsLink Message Boards

New Comments and Topics

All Topics, Grouped by Forum


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[Guidance Overview]

IRS Makes Major Changes to Qualified Pre-Approved Plan Program
"Nonstandardized plans may be customized, within IRS limits, without becoming individually designed plans.... The program now includes nonelecting church plans. A nonstandardized plan may allow hardship distributions of elective deferrals for non-safe harbor reasons. The IRS will no longer review and approve a plan's trust or custodial agreement and will require that the trust agreement or custodial account agreement be in a document separate from the plan."
Ascensus

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[Guidance Overview]

IRS Revises Opinion Letter Procedures for Pre-Approved Plans, Issues 2017 Cumulative List
"The M&P Plan and VS Plan programs are combined and replaced by a single opinion letter program for standardized plans and nonstandardized plans ... A pre-approved plan may have one of two formats: as an adoption agreement plan or a single document plan ... An adopting employer of a nonstandardized plan may adopt minor modifications to the plan ... A money purchase plan may be combined with a 401(k) plan or a profit-sharing plan in the same pre-approved plan document.... A nonstandardized plan that contains an employee stock ownership plan (ESOP) may include a 401(k) plan ... A cash balance plan may now permit the rate used to determine an interest credit to be based on the actual return on plan assets."
Thomson Reuters Practical Law

Fiduciary Responsibilities: Wanted, Dead or Alive (PDF)
"Keeping track of retirees may seem like a simple process because they are receiving pension payments. However, if a family member neglects to report the death of a retiree or beneficiary to the plan administrator, payments could continue for years after the death. Even though electronic fund transfer is promoted as the most convenient way to receive payments in this modern era, it can complicate the issue if the death of a retiree is not reported and payments continue to be deposited to the retiree's account.... Here are a few strategies for verifying a retiree's life status[.]"
Milliman

Who Are the Right People to Sit on Your Investment Committee?
"Before we start looking for members to serve on the committee, it's important to find the right person to lead it.... [T]he best person to lead the committee may not even hold a formal leadership position in the organization.... [Members of your investment committee shouldn't be chosen solely based on title, but rather the skills they bring to the group. It's also important to consider the mix of members and their various skills, so that the strengths of your committee members complement each other."
Vanguard

House Republican Drafts Bill to Kill DOL Fiduciary Rule
"House lawmakers plan to convene a hearing [July 13] to discuss the impact of the [DOL] fiduciary rule on the capital markets. The hearing will focus on a draft bill put forth by Rep. Ann Wagner, R.-Mo., that seeks to kill the fiduciary rule and instead impose a best interest standard on broker-dealers' investment recommendations."
ThinkAdvisor

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More Court Victories for 401(k) and 403(b) Fiduciaries
"One of the trendy current claims is that it is always a fiduciary breach to have a money market fund as the cash equivalent investment rather than a stable value fund, though stable value funds can have transfer and withdrawal restrictions. And some of the basics of litigation -- such as standing and causation -- have also been found to be missing in these suits. The complaints put forth an oversimplified view of the law, and some judges have seen through it."
Cohen & Buckmann, P.C.

The Current State of State Retirement Plan Initiatives
"Three states -- Oregon, California and Illinois -- have made considerable progress in designing mandatory auto-IRA programs. The CRA/voiding of DOL's regulation presents two substantive problems for these states: First, if the auto-IRA program is determined to be an ERISA plan, then it (and the employers covered by it and, even, conceivably the state itself) will be subject to, e.g., ERISA reporting and fiduciary rules. Second, the program may be subject to a preemption challenge ... These states also have a formal problem -- the laws authorizing these programs generally require that the mandatory auto-IRA not be subject to ERISA."
October Three Consulting

How ETFs Might Help Retirees Better Manage Distributions
"Although many legal boundaries stand in the way, instead of receiving a cash lump sum, retirees could instead receive a balanced portfolio of ETFs allocated based on a specific risk profile. With the onset of digital advice from independent platforms as well as from traditional brokerage firms and wealth managers, the barriers to integrating an ETF portfolio into a beneficiary's new or existing account are falling."
Pensions & Investments

Nine Ways to Retire on Social Security Alone
"Delay Social Security ... Do a Social Security do-over ... Maximize Social Security survivor benefits ... Eliminate debt ... Move to a less expensive locale ... Don't forget taxes ... Buddy up ... Take advantage of benefit programs ... Utilize freebies."
AARP

Executive Compensation
and Nonqualified Plans

Does a High CEO Pay Ratio Harm Company Value?
"[E]ven when controlling for the portion of pay linked to stock performance, the relationship between CEO pay ratio and stock price remains strong.... [On] average, a company with a CEO-worker pay ratio at the 85th percentile has a return on assets 13% higher than that of a firm at the median."
CFO

Discussions on
the BenefitsLink Message Boards

Government DB Plan Wants to Extend DROP Period
"Governmental defined benefit plan contains a provision that allows certain employees to extend their DROP periods using accrued annual leave. Employees have the option to cash out leave or use the hours to extend their DROP period. This looks like a CODA to me because the employees have the option to cash out or us leave hours to extend DROP. Am I wrong on this?"
BenefitsLink Message Boards

Aggregation Issues for Governmental 403(b) Plan Sponsor with Subsidiary That Sponsors 401(k) Plan
"Employer sponsors a governmental 403(b) plan, and recently bought a company (i.e., it's now in a parent-subsidiary relationship) in the process of establishing a 401(k) safe harbor plan. For testing purposes, will the 403(b) plan become subject to 410(b) and 411 testing? Any other testing issues or coverage issues that need to be addressed?"
BenefitsLink Message Boards

Coverage Testing Fails Minimum Coverage Test Because of Religious Objection by Some Employees
"I have a plan that does not pass coverage due to the Amish being eligible but who decline to receive a benefit due to religious and moral beliefs. How can the plan sponsor provide a contribution for an Amish employee when he will not accept participation? Will the plan, if audited, be safe?"
BenefitsLink Message Boards

What Statute of Limitations Period Applies for Former Employee's Claim? Plan Terminated 18 Years Ago
"DB Plan terminated and final distribution of assets made in 1999 (!) -- smooth sailing through PBGC. Now, in July 2017, a former employee receives notice from SSA saying he might have a benefit under the DB plan. That notice could very well be wrong due to an SSA error or the plan sponsor having failed to list this individual in a Schedule SSA long ago as having received his benefit. On the other hand, it's possible that the individual is entitled to a benefit if he fell through the cracks during the termination process, never received his benefits in cash, and was never included on the annuity purchase list. What is the limitations period for this individual to bring a claim?"
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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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