Retirement Plans Newsletter

August 10, 2017

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Employee Benefits Jobs

Plan Document QA Software Tester
ftwilliam.com part of Wolters Kluwer Legal & Regulatory
in WI, Telecommute

Compliance Coordinator / Senior Plan Administrator
Scholz & Friends Enlightened Retirement Group, Inc.
in TX

Jr. Plan Document Associate
Professional Capital Services
in PA

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Webcasts and Conferences

Health Plan Due Diligence for Mergers & Acquisitions
August 29, 2017 in TX
Worldwide Employee Benefits Network [WEB] - Dallas Chapter

Structuring and Negotiating Executive Compensation Packages: Addressing Pay, Severance, Restrictive Covenants
September 19, 2017 WEBCAST
Strafford

Regional Employee Benefits Forum
September 27, 2017 in GA
Southeast Benefits Education Network [SBEN]

New Trustees InstituteŚLevel II: Concepts in Practice
October 21, 2017 in NV
International Foundation of Employee Benefit Plans [IFEBP]

28th Annual Benefits Compliance Conference
November 2, 2017 in TX
SouthWest Benefits Association

Ultimate Cash Balance Seminar
November 2, 2017 in IL
DATAIR Employee Benefit Systems, Inc.

Certificate Program for Non-Professional Fiduciaries
February 11, 2018 in CA
Beyster Institute

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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]

DOL Announces Proposed 18-Month Extension of the Fiduciary Rule Transition Period (PDF)
"In the notice of administrative action, DOL states that it has submitted 'proposed amendments' extending the Transition Period to [OMB]. The words 'proposed amendments' could mean that DOL is only at the 'proposed rule' stage with a delay. If that is the case, then there is a probability that the length of the delay or other specifics of the delay could change; there is also some risk that the delay may not become finalized."
Groom Law Group

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[Guidance Overview]

DOL to Seek 18-Month Delay of Best Interest Contract Exemption and Other Fiduciary Rule Exemptions
"Although the Transition Period is currently scheduled to end on January 1, 2018, the DOL's court filing states that the DOL seeks to extend the Transition Period by 18 months, to July 1, 2019. If adopted, it appears that the BICE, Principal Transaction Exemption, and PTE 84-24 will continue to be available as long as the impartial conduct standards are satisfied, without regard to any other conditions of those exemptions."
The Wagner Law Group

[Guidance Overview]

The Final Rule: DOL Issues Fourth Set of FAQs
"The FAQs leave open the possibility that, if service providers update 408b-2 disclosures currently to describe service or other changes, they may need to update those disclosures again after January 1 to expressly use the 'fiduciary' term ... The FAQs do not appear to address the case of a service provider that was an unintended 'functional' fiduciary under prior law."
Eversheds Sutherland, via Lexology

[Guidance Overview]

DOL Issues FAQs Clarifying Required Fiduciary Status Disclosures Under ERISA Section 408(b)(2)
"The FAQs provide examples of communications that would not be considered fiduciary investment advice, including: [1] A plan enrollment brochure stating that participants should consider saving a certain percentage of their pay. [2] A targeted email suggesting that a participant increase his or her contributions by a certain percentage to reach a specific savings goal. [3] A targeted email sent during a participant's birth month suggesting that a participant contribute a certain amount based on the amount that the participant has already saved in the plan."
Thomson Reuters Practical Law

Dalbar Puts a Sellers' Exemption to Fiduciary Rule on DOL's Desk
"In comment letters to the DOL, Empower Retirement and attorneys at Davis & Harmon are among those calling for a so-called sellers' exemption, which would distinguish one-time sales of investments by brokers and insurance agents from fiduciary advice. In its comment letter, Dalbar goes further, and actually submits a proposed sales professional exemption. At its heart, the proposed exemption ... would prohibit brokers and insurance agents from marketing themselves as fiduciaries, something many fiduciary proponents say the [SEC] should have been doing all along."
ThinkAdvisor

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Reforms, Regulations & Retirement Realities

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Robo-Advisers: More Complex Than They May Appear (PDF)
"What is a robo-adviser? ... How are robo-advisers regulated? ... What special challenges do robo-advisers confront in satisfying their disclosure obligations? ... Can robo-advisers satisfy their fiduciary duties to their clients? ... Are robo-advisers operating unregistered investment companies? ... Can robo-advisers satisfy their compliance responsibilities?"
Katten Muchin Rosenman LLP, via Bloomberg Law Securities Regulation & Law Report

Income for Life: Using Deferred Income Annuities in Retirement
"Deferred income annuities (DIAs) can help you insure against the possibility of outliving your assets in retirement. DIAs can offer the same level of benefits after the deferral period as immediate annuities for a much smaller up-front payment. DIAs generally aren't liquid so you can't withdraw their value as cash, but knowing that you'll get a guaranteed income for life could free you to keep more of your other savings invested."
Charles Schwab

Corporate Pension Funded Status Improves in July (PDF)
"The funded status of the 100 largest corporate defined benefit pension plans increased by $4 billion during July ... The funded status deficit declined to $282 billion from $286 billion at the end of June due to strong July investment gains.... As of July 31, the funded ratio rose to 83.7%, up from 83.5% at the end of June. The funded ratio has been teetering between 83% and 84% over the first seven months of the year."
Milliman

[Opinion]

SIFMA Submits Comments and New Evidence of the DOL Fiduciary Rule's Negative Impact on Retirement Savers
"SIFMA provides the following to assist in the DOL's review of the Rule: [1] data detailing the negative impact to investors as firms move to implement the Rule and Exemptions; [2] An explanation of why it is unnecessary to create a new private right of action to change the standard of conduct in the financial services sector; [3] Changes to the regulatory language needed to help make this Rule work for retirement savers; [4] Comments regarding the Exemptions; and [5] A proposed new principles-based exemption that protects investors and provides certainty to service providers seeking to comply with the Rule's intent." [See full text of comment letter and Deloitte study commissioned by SIFMA.]
Securities Industry and Financial Markets Association [SIFMA]

Executive Compensation
and Nonqualified Plans

Preference for Annual Say-on-Pay Votes Grows -- For Now
"2017 data indicate a growing preference for annual say-on-pay frequency recommendations and adoptions, although possible future legislation could alter the course of this trend.... [In] 2011, companies that recommended annual and triennial frequencies each represented sizeable portions of all public companies queried. In 2017 ... far more companies are recommending an annual frequency compared with 2011."
Willis Towers Watson

Discussions on
the BenefitsLink Message Boards

Staffing of TPA Firms: What Duties Do Your Employees Perform?
"How are your firms structuring your staffing roles? Are you operating with administrators that correspond with their assigned clients and also perform all of the annual valuation work from census scrubbing, to contribution calculations, applicable testing and tax return filings? Or are you structuring your organization with staff assigned solely to client communication and others to day-to-day plan administration functions only? Do you operate with staff that only perform distribution and loan processing functions?"
BenefitsLink Message Boards

Delayed Receipt of QDRO Qualification
"Are there any impacts under ERISA if the QDRO qualification notice was sent to the Alternate Payee using an address on file and not the address on the QDRO, and the AP now says it took several weeks to receive it (because it needed to be forwarded to the new address)?"
BenefitsLink Message Boards

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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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