Retirement Plans Newsletter

July 25, 2017

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Retirement Plan Compliance Director
Newport Group
in IL

Pension Administrative Consultant
Polycomp Administrative Services, Inc.
in CA

Sales Account Executive - Employee Benefit Services
Healthcare Association of New York State
in NY

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Webcasts and Conferences

HIPAA Comes of Age: 21 Years of Privacy and Security
August 17, 2017 WEBCAST
Bradley Arant Boult Cummings LLP

Developing HIPAA Policies and Procedures
September 8, 2017 WEBCAST
MentorHealth

Employee Benefit Plans of Tax-Exempt and Governmental Employers 2017
October 5, 2017 in DC
American Law Institute Continuing Legal Education Group [ALI CLE]

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Discussions

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New Comments and Topics

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[Official Guidance]

Text of PBGC Request for Information: Regulatory Planning and Review of Existing Regulations
"With an eye toward the Fall iteration of the semi-annual regulatory agenda, PBGC is requesting information, suggestions, and comment from the public -- including from plan sponsors, participants, practitioners, organizations representing retirees and plan participants, and other parties participating in or affected by PBGC's programs -- on regulatory and deregulatory actions PBGC should take. To facilitate this request for information, PBGC developed [13] questions ... the answers to which will help determine whether there are gaps in regulatory guidance where the public believes rulemaking would be beneficial, and help PBGC evaluate the continued effectiveness and usefulness of existing regulations."
Pension Benefit Guaranty Corporation [PBGC]

[Advert.]

ftwilliam.com's Philadelphia Regional One-Day Conference

Sponsored by Wolters Kluwer

Join us for a review of the various EPCRS programs and walk through real world correction situations we have encountered at Technical Answer Group. Register here for this FREE webinar and earn 1 hr CE credit. Date: Thurs. Aug. 3, 2017 Time: 1 pm (CT)


Guide to Retirement Plan Fees and Expenses
11 pages. "[R]etirement plan fees can be classified into three main categories: [1] Asset-based fees and expenses are calculated as a percentage of plan assets and can be based on a portion or all assets of the Plan. [2] Participant-based fees and expenses are calculated based on the number of participants in the Plan, or eligible for the Plan. [3] Itemized service fees and expenses are typically applied as a fixed charge for a specific service provided to the Plan or a specific participant."
Multnomah Group; free registration required

The Influence of DC Plan Design on Retirement Outcomes (PDF)
16 pages. "Using actual incomes, savings rates, account balances and asset allocations, DCIIA's project seeks to project how different groups of participants may fare in achieving the means to generate or finance an adequate retirement income.... [1] Automatic plan features work ... [2] The current system can do better, even without additional legislative or regulatory action ... [3] Limiting asset 'leakage' works.... [4] Today's older workers are especially vulnerable."
Defined Contribution Institutional Investment Association [DCIIA]

Father of the 401(k) Designs Cheaper Retirement Plan
"Employees covered by small-business retirement plans typically pay between 1.5 percent and 2.75 percent annually in fees -- many of which are hidden and hard to understand.... [Ted Benna] has drawn up three new retirement-savings models that he contends offer the same benefits as a traditional 401(k). One is best suited for married employees with less than $100,000 of adjusted gross income and single employees with less than $62,000 of adjusted gross income. Another avoids the payroll taxes applicable to employer contributions. The third model allows employees to sock away pretax contributions of up to $12,500 under age 50 and $15,500 over age 50, compared with only $5,500 and $6,500 for some other models."
The Gazette

2017 Defined Contribution Plan Sponsor Survey Findings
"A shift is taking place among plan sponsors in their view point on driving participant decisions. Now, more say they focus on proactively placing participants on a solid saving and investing path (vs. having participants make their own choices).... Despite many positive trends identified in this year's survey, one measure remains unchanged from 2015 -- many plan sponsors are not aware of their fiduciary status."
J.P. Morgan Asset Management

[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.


Switching from a SEP to a 401(k)
"While a SEP may be the perfect plan type for some situations, many employers who start with a SEP later realize that a 401(k) plan may actually help the owners better meet their objective of maximizing contributions to themselves at a lower contribution obligation for the employees.... A SEP may be terminated at any time and all funding can stop once the plan is terminated.... No notice has to be provided to the IRS about the SEP termination. Employees may take a distribution from the SEP or may roll their SEP account into the new 401(k) plan or into an IRA."
Retirement Management Services

DOL May Be Saying 'Au Revoir' to BIC Exemptions Restrictions on Arbitration (PDF)
"The Government's announcement in its Fifth Circuit brief that it will no longer defend the BIC Exemption's anti-arbitration conditions demonstrates a significant shift by the Trump Administration toward favoring arbitration and limiting class action litigation. In its brief, the Government justified its new position as being based on a similar position reversal in a case before the Supreme Court, NLRB v. Murphy Oil USA, Inc."
Groom Law Group

Value of Advisors Underscored by Annuity Program Pilot
"Early responses to a new direct-to-consumer (D2C) annuity pilot program in Arizona reveal that buyers want to talk to someone -- or something -- before committing to a long-term retirement investment. The early findings in Nationwide's Guarantees Retirement Income program raise new questions for insurance companies serious about expanding through the growing D2C channel to reach middle-income consumers directly online."
Advisor News

Investment Advice: How to Tell If Yours Is Good
"It is not necessary for plan sponsors to offer the best performing funds in their 401k plans. Rather, you should be more concerned that the process used to select and monitor the investment options offered is compliant and sound.... [Here] are ways you can tell if you are receiving good investment advice. [1] It is coming from a fiduciary ... [2] It includes discussion of 404(c) compliance and QDIAs ... [3] It is comprehensive ... [4] It demonstrates a sound process ... [5] [It] fits your culture ... [6] It includes proper monitoring."
Lawton Retirement Plan Consultants

Text of Enrolled Actuaries Pension Examination EA-2, Segment L, May 2017 (PDF)
95 pages. Complete text of exam dated May 2, 2017, with answers, published online by IRS.
American Society of Pension Professionals & Actuaries [ASPPA]; Joint Board for the Enrollment of Actuaries [JBEA]; Society of Actuaries

[Opinion]

Public Pensions Are Under Attack in Iowa
"Each year IPERS pumps $1.8 billion into the Iowa economy through modest benefits that average $16,000 annually. This is economic activity that should not be underestimated in a small, mostly rural state like Iowa. As Iowa's population continues to shift from rural areas to larger cities, those small towns will find that they rely on the spending of pension benefits by retirees to stimulate local economies. Republican political leaders in Iowa appear to be laying the groundwork to attack and possibly eliminate IPERS."
National Public Pension Coalition

[Opinion]

Secure Choice 2.0: States Blazing a Path to Retirement Security for All (PDF)
36 pages. "Secure Choice is a direct outgrowth of persistent and converging trends that are reshaping the retirement landscape -- trends that include the diminution of traditional defined-benefit pension plans and the failed promise, for many Americans, of the much-vaunted 401(k) plan. This paper revisits these and other forces that have given rise to a wave of state initiatives to help Americans retire with dignity. It examines what has happened since the earlier white paper was issued, takes stock of developments at the state level, and looks at the challenges ahead."
National Conference on Public Employee Retirement Systems [NCPERS]

Discussions on
the BenefitsLink Message Boards

What's the Correction for Failure to Adopt a 403(b) Plan Document by Dec. 31, 1999?
"Assume the only 403(b) failure an employer seeks IRS relief on is the employer's failure to adopt a written plan. If an employer adopts a written plan and files a VCP submission and pays the $500 (for 20 or fewer participants), is there anything the IRS will require?"
BenefitsLink Message Boards

Can Document Have Different Provisions Specific to Various Multiple 403(b) Vendors?
"Is it permissible to have one plan document for a 403(b) plan, but different provisions at different vendors? For example, can Roth contributions be added only at Fidelity and not TIAA or VALIC, if it's written into a custom plan document?"
BenefitsLink Message Boards

Remedy for Late/Missing Annual Funding Notice?
"We recently took over a single employer client from a prior actuary and found they have not provided an Annual Funding Notice for the past three years. This exposes them to a sizable penalty ($110 per day, per participant). Is anyone aware of a correction procedure or method to remedy this situation? Also, aside from DOL/IRS/PBGC audit, is there any way that this requirement is enforced?"
BenefitsLink Message Boards

Press Releases

IRS Office of Appeals Pilots Virtual Service
IRS [Internal Revenue Service]

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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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