Retirement Plans Newsletter

July 20, 2017

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in CA

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Webcasts and Conferences

Beneficiary Administration Training
July 27, 2017 WEBCAST
Wolters Kluwer

Basic IRA Training
August 8, 2017 WEBCAST
Wolters Kluwer

Preparing for the CEO Pay Ratio Disclosure Rule: Overcoming Key Challenges
August 9, 2017 WEBCAST
American Law Institute Continuing Legal Education Group [ALI CLE]

Engaging in Corporate Wellness
August 9, 2017 in TX
Worldwide Employee Benefits Network [WEB] - Houston Chapter

5500 Update
August 17, 2017 WEBCAST
ERISApedia.com

Corporate Role in Community Health
August 22, 2017 WEBCAST
The Alliance

How to Conduct a HIPAA Risk Assessment
September 4, 2017 WEBCAST
MentorHealth

ESOPs and Business Transitions: Structuring a Win-Win-Win Succession Plan
September 13, 2017 WEBCAST
ASPPA [American Society of Pension Professionals & Actuaries]

Breaking Myths in Health Care
September 28, 2017 in WI
The Alliance

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Discussions

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[Guidance Overview]

IRS Updates the Pre-Approved Plan Document Program
"The most significant change outlined in [Rev. Proc. 2017-41] is the restructuring of the M&P and VS programs into a single Opinion Letter program with two types of plan documents: Standardized and Nonstandardized. This change eliminates the distinctions between M&P and VS plans and expands the Nonstandardized Plan program to allow for greater flexibility in plan features and options (in effect, Nonstandardized plans will fill the role traditionally filled by VS documents)."
FIS Relius

[Advert.]

IRS Determination Letter: Recent Changes and New Guidance

Sponsored by Lorman and BenefitsLink

July 27 webinar. Learn how employers can ensure that their individually designed retirement plans, with various amendments and design changes, remain in compliance with the voluminous requirements for tax-qualified status. CE Credits. BenefitsLink discount


IRS Paves the Way for More Preapproved Plans
"A pre-approved plan may have either of two formats: an adoption agreement and basic plan document or a single plan document; a money purchase pension plan can now be combined with either a 401(k) or profit-sharing plan; an ESOP can now include a 401(k) feature, but it must be a nonstandardized plan; a Cash Balance plan may now provide that the rate used to determine an interest credit be based on the actual return on plan assets (not a subset of plan assets), but it must be a nonstandardized plan[.]"
Findley Davies | BPS&M

Audit Survival Tips for Retirement Plans
"Your preparation for an audit and your approach to an audit will save your organization thousands of dollars in productive time, penalties, and interest.... [A]lthough the odds of your plan being audited are low, if the DOL or the IRS perceives some elevated risk of noncompliance, your chances of an audit will go up substantially."
Findley Davies | BPS&M

These Three Firms Own Corporate America
"In the past, individuals and large institutions mostly invested in actively managed mutual funds ... But since the financial crisis of 2008, investors have shifted to index funds ... [F]rom 2007 to 2016, actively managed funds have recorded outflows of roughly $1,200 billion, while index funds had inflows of over $1,400 billion.... This shift, arguably the biggest investment swing in history, is due in large part to index funds' much lower costs.... The fast-growing index sector ... is dominated by just three giant American asset managers: BlackRock, Vanguard and State Street ... [which,] taken together, have become the largest shareholder in 40% of all publicly listed firms in the United States."
The Conversation

Shifting DCIO Distribution Offers Opportunity for 401(k) Advisers
"In the large defined-contribution-plan market -- the realm of plans larger than $1 billion -- the norm is for money managers to sell directly to plan sponsors and work cooperatively with the plan's consultants. For smaller plans, the defined contribution investment-only (DCIO) groups at these asset managers have generally sold only through advisers. But that's about to change."
InvestmentNews

[Advert.]

SPARK Forum - November 5-7, 2017 -- The Breakers, Palm Beach, FL

Sponsored by SPARK

Join us at the retirement services industry's leading event for top marketing, sales, administration and record keeping professionals. Comprehensive agenda to meet the needs of 401(k) Plan Providers, Financial Advisors and Third Party Administrators.


Life with Conflict of Interest Starting to be Implemented
"As the new compensation arrangements available from different vendors settle in under the [Conflict of Interest (COI)] Package, plan sponsors may want to consider surveying what is available in the market for their plan in terms of services and fees. After the landscape settles in the next 12 to 18 months or so, a new request for updated proposals may uncover new alternatives for plan fiduciaries and plan sponsors to consider for complying with the COI Package."
Winstead PC

Committee Approves Legislation to Repeal Fiduciary Rule, Strengthen Protections for Retirement Savers
"[T]he House Committee on Education and the Workforce ... approved the Affordable Retirement Advice for Savers Act (H.R. 2823).... [T]he legislation protects access to affordable retirement advice by overturning the Obama administration's fiduciary rule while requiring retirement advisors to serve the best interests of their clients." Also available: [1] fact sheet, [2] bill summary, and [3] more information on the markup.
Committee on Education and the Workforce, U.S. House of Representatives

DOL Rule Will 'Almost Certainly' Be Delayed
"Phase two of the controversial [DOL] fiduciary rule will almost certainly be delayed beyond Jan. 1, a panel convened by The American College [of Financial Services] agreed ... However, panelists cautioned, that does not mean the fiduciary standard is going away. It does mean that smaller changes could yield big dividends for the industry. For example, the right for clients to class-action lawsuits could be removed."
InsuranceNewsNet.com

A New Strategy for Cash-Strapped Corporate Pensions
"Cash-driven investing involves building a portfolio so it can generate enough cash flows to meet expected liabilities, while also improving the stability of funding levels. The strategy helps declining pension plans better tolerate market downturns by mitigating the risk of having to sell assets at a bad time."
Institutional Investor

Is a 457 Plan Right For You?
"Like a 401(k), a 457 plan allows participants to defer compensation by making contributions to their retirement plan; however, a 457 plan may allow for more flexibility. For instance, early withdrawals from a 401(k) are subject to a 10% penalty but with 457 plans, there is no early withdrawal penalty, although withdrawals are subject to ordinary income tax. A 457 plan may also be available to certain independent contractors who work with governmental agencies and eligible non-profits, while 401(k) and 403(b) accounts are not likewise available to independent contractors."
Butterfield Schechter LLP

Newborns Would Save $2.2 Million for Retirement with This Idea
"Any adult would be permitted to make tax-deductible contributions to any child's account, whether family, friend or stranger. Each minor would be able to receive a maximum $1,000 yearly, but contributors could spread a greater amount across multiple accounts. [The] idea also calls for the Child IRA converting to a traditional one at age 19, subject to current law. This means that additional contributions -- 2017's limit is $5,500 for people under age 50 -- would lead to even higher account balances in retirement."
CNBC

Benefits in General

[Guidance Overview]

The Case for Tackling the New Disability Claims Procedures Before Year-End
"[K]ey changes implemented by the new rule are ... [1] New independence and impartiality provisions.... [2] Enhanced review rights.... [3] New deemed exhausted provisions.... [4] Expanded definition of adverse benefit determination.... [5] New culturally and linguistically appropriate standards.... [6] New disclosure requirements."
Benefits Bryan Cave

Pension/OPEB 2017 Assumption and Disclosure Study (PDF)
23 pages. "The 2016 median discount rate for pension plans in the study decreased 20 basis points since 2015 and has decreased more than two full percentage since 2007 ... Median plan funding levels remained unchanged from 2015, with pension plan assets equal to approximately 82% of the projected benefit obligation (PBO) in 2016 and 2015.... The 2016 median discount rate for OPEB plans in the study decreased 25 basis points since 2015 and has decreased by more than two full percentage points since 2007 ... For OPEB plans that are funded, the median plan funding level has remained essentially unchanged, with OPEB plan assets equal to approximately 53% of the accumulated postretirement obligation (APBO) in 2016 compared with 54% in 2015."
PricewaterhouseCoopers

Discussions on
the BenefitsLink Message Boards

Family Attribution Rules When Son Takes Over Business
"A dentist had his son working for him as a 1099 independent contractor. The dentist's retirement plan covered the dentist's employees. The son now wants to take over the practice and start his own retirement plan. He wants dad's employees to wait until they satisfy the service requirement for him before entering his plan, but he wants to count his service as an independent contractor so that he will be immediately eligible under his plan. Possible?"
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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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