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[Official Guidance]

Text of PBGC Disaster Relief Announcement 17-09 in Response to Severe Storms and Flooding from Hurricane Harvey in Texas
"This Disaster Relief Announcement provides relief relating to PBGC deadlines ... [to] any person responsible for meeting a PBGC deadline ... that is located in the disaster area for which the [IRS] has provided relief in TX-2017-09 ... or [who] cannot reasonably obtain information or other assistance needed to meet the deadline from a service provider, bank, or other person whose operations are directly affected by the severe storms and flooding from Hurricane Harvey that began on August 23, 2017, in Texas.... The relief generally extends from August 23, 2017 through January 31, 2018. The disaster area consists of Aransas, Bee, Brazoria, Calhoun, Chambers, Fort Bend, Galveston, Goliad, Harris, Jackson, Kleberg, Liberty, Matagorda, Nueces, Refugio, San Patricio, Victoria and Wharton Counties."
Pension Benefit Guaranty Corporation [PBGC]


Online Learning Course: 401(k) Plan Structure

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Review considerations for structuring a 401(k) plan. Topics include salary deferral limits and catch-up contributions, matching and profit-sharing contributions, nondiscrimination testing and safe harbors.

[Official Guidance]

Text of FINRA Regulatory Notice 17-27: Guidance to Members Affected by Hurricane Harvey (PDF)
"This Notice provides guidance to firms with a home office, branch office or other business location affected by Hurricane Harvey. FINRA is providing guidance on a number of regulatory and compliance issues, including emergency office relocations, continuing education requirements for registered personnel, registered personnel engaged in active military duty, regulatory filings and associated fees, regulatory inquiries and customer communications."
Financial Industry Regulatory Authority [FINRA]

[Guidance Overview]

DOL Extends Applicability Date of BIC Exemption and PTE 84-24 by an Additional 18 Months
"[FAB 2017-03] stated, 'The Department also anticipates it will propose in the near future a new and more streamlined class exemption built in large part on recent innovations in the financial services industry. However, neither such a proposal nor any other changes or modifications to the Fiduciary Rule and PTEs, if any, realistically could be implemented by the current January 1, 2018, applicability date.' The Department also made its intentions clear with regard to working with the SEC on a uniform rule[.]"
Carlton Fields

[Guidance Overview]

Retirement Plan Relief for Hurricane Harvey
"[IRS Announcement TX-2017-09] provides ... relief postponing numerous deadlines to January 31, 2019.... Announcement 2017-11 simplifies and streamlines loans and hardship distributions in the wake of Harvey.... The relief related to hardship distributions applies to plans that the law allows to provide for hardship distributions.... The documentation relief applies to all types of plans eligible to make plan loans, including qualified plans, 403(b) plans, and governmental 457(b) plans.... The Announcement does not provide any relief for 457(b) plans sponsored by tax-exempt organizations. While the Announcement does not expressly mention 409A plans, it is likely that the IRS would find that Harvey is an unforeseeable emergency permitting distributions under those plans.... The DOL issued a press release outlining several points relating to Hurricane Harvey[.]"
S. Derrin Watson, via ERISApedia

[Guidance Overview]

DOL Officially Proposes 18-Month Delay of Full Implementation of BICE and Other Exemptions
"[It is] highly likely that the DOL will finalize the proposal in relatively short order ... [C]hanges to the proposal are possible, especially since the DOL specifically asked for comments on alternative delay periods. Additionally, political or other forces outside the DOL's control could affect the proposed delay, or at least its finalization. For example, the government's fiscal year ends on September 30, 2017, and, if the government is shut down due to inability to agree on a budget ... finalization of the 18-month delay could be delayed. Finally, please note that the proposal maintains the Impartial Conduct Standards and the DOL has made clear that financial institutions that rely on the Exemptions must continue to comply with those standards."
The Wagner Law Group


Things Have Changed – Are You Up-To-Date?

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DOL Nonenforcement for Key Element of Investment Fiduciary Guidance
"FAB 2017-03 is a very pointed DOL declaration that elements of two PTEs in the investment fiduciary guidance will not be enforced, even after (or if) these final regulations and exemptions take full effect.... [The two PTEs] are the Best Interest Contract (BIC) Exemption and the Principal Transactions Exemption, which specifically prohibit investment organizations from requiring clients to waive their right to participate in legal class actions and settle conflicts by arbitration."

Rollins Inc. 401(k) Participant Sues Morningstar, Prudential Over Alleged RICO Violations
"The complaint said Morningstar and Prudential violated the Racketeer Influenced and Corrupt Organization [RICO] Act by engaging in a 'conspiracy' to increase revenue and profits 'from their self-interested administration' of GoalMaker, an 'automated investment advice program' from Morningstar and Prudential. Alleging GoalMaker is a 'predatory racketeering enterprise,' the lawsuit argued that it 'gets retirement plan investors to turn over the investment management of their accounts' to a unit of Prudential." [Green v. Morningstar, Inc., No. 17-5652 (N.D. Ill., complaint filed Aug. 3, 2017)]
Pensions & Investments

Oregon's State-Run Retirement Program Requires Employer Action (PDF)
"Employees of participating employers are automatically enrolled in the Roth IRA through payroll deduction, unless they elect to opt out. Employers who currently offer an employer-sponsored retirement plan to their employees are not required to participate in the OregonSaves program. However, these employers are required to file for a Certificate of Exemption. Action is required by all employers with employees based in Oregon, regardless of the employee's state of residence."

Oregon Treasury Seeks to Modify State-Run Retirement Program
"The proposal would create new rules and modify existing rules for the ORSP. Specifically, the rules: [1] clarify the definitions in certain joint employment relationships; [2] allow for non-payroll contributions from participating employees; [3] clarify timing related to contributions; [4] allow for dollar-based contributions; and [5] provide a delegation of authority to the executive director.... The Treasury ... plans to finalize the rules in October."
National Association of Plan Advisors [NAPA]


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Commonwealth of Kentucky Pension Performance and Best Practices Analysis: Recommended Options (PDF)
113 pages. "In the aggregate, the Commonwealth of Kentucky's pension plans are among the worst funded in the nation. Without corrective action, the large and growing unfunded liabilities associated with these pension benefits not only threaten the retirement security of plan participants, but they are also eroding the fiscal stability of the state ... [This report presents] ideas and alternatives for improving the long-term security, reliability, and affordability of these benefit programs. These recommended options build on [an] analysis of factors that have led to the current conditions ... Actuarial assumptions; Benefit levels and risk exposure; Funding; Investment practices and approach."

Defined Contribution Plan Participants' Activities, First Quarter 2017 (PDF)
12 pages. "In 2017:Q1, 1.3 percent of DC plan participants took withdrawals, about the same share as in 2016:Q1. Levels of hardship withdrawal activity also remained low. Only 0.4 percent of DC plan participants took hardship withdrawals during 2017:Q1, the same share as in 2016:Q1.... Only 1.1 percent of DC plan participants stopped contributing in 2017:Q1, the same pace as in 2016:Q1.... At the end of March 2017, 16.6 percent of DC plan participants had loans outstanding, compared with 17.0 percent at year-end 2016. Nevertheless, loan activity continues to remain elevated compared with about eight years ago[.]"
Investment Company Institute [ICI]


ERIC Letter to OMB on Delaying Implementation of Mortality Tables for Determining Present Value Under DB Plans
"ERIC urges you to take at least the entire 90-day review period in order to conduct a thorough economic analysis of the benefits and costs of the regulatory action, including: (i) a quantification of its effects, (ii) an analysis of potentially effective and reasonably feasible alternatives, and (iii) meetings with stakeholders who will be impacted by the rule. The Proposed Treasury Rule would result in recalculation of individual company pension plan liabilities by billions of dollars, and collectively hundreds of billions of dollars to the larger economy."
The ERISA Industry Committee [ERIC]

Benefits in General

Seventh Circuit: Forum Selection Clause Enforceable Under ERISA
"Inclusion of a forum selection clause in an ERISA plan document is consistent with best practices, and, as the Appeals Court noted in its decision, may reduce plan administrative costs and promote uniformity in plan administration. While a minority of district courts have ruled in favor of participants as it relates to the enforceability of forum selection clauses, the only two Circuit Courts of Appeals to rule on the matter (and the majority of district court cases) have held that these clauses will be enforced by a court of law." [In re Mathias, No. 16-3808 (7th Cir. Aug. 10, 2017)]
King & Spalding

ERISA Advisory Council Reviews Mandated Disclosures
"Recommendations have included requiring fewer disclosures and notices and making notices simpler to understand. Reduced disclosure notices would lessen the burden on plan providers and help ensure plan participants are not overloaded with confusing plan information that does not require action on their part."
Butterfield Schechter LLP

Open Enrollment for Employees: How to Get the Most Out of Your Benefits in 2018
"[S]ome employers don't include retirement benefits on the menu of available health and welfare benefit options during open enrollment season ... [Y]ou might have to take matters into your own hands when it comes to your employer-sponsored retirement plan during open enrollment season.... [E]mployees who are saving for retirement, with access to a HDHP, should consider participating in their employer's HDHP, so that they can take advantage of the HSA offered with it.... [C]onsider critical illness coverage, if offered by your employer ... [M]any employers offer incentives around open enrollment for participation in health screenings, health risk assessments, and wellness activities -- this can essentially put more money back into the employee's pocket, with the added benefit of helping the employee to better understand and manage health risks."

on the BenefitsLink Message Boards

QNECs Needed for Missed Deferrals in Prior Years. OK to Use Them in ADP/ACP Test?
"I have a 401(k) plan in which deferrals were missed for a participant in 2015 and 2016 plan year. We found out about it during 2017. The employer has calculated the missed deferrals and the matching amount along with earnings. [1] Can this QNEC amount be included in an ADP\ACP test? [2] If so, can the 2015 and 2016 QNEC amounts be use for the 2017 ADP\ACP tests, or instead can they be used only for their respective plan year tests. In this case, the plan already has completed 2015 and 2016 testing, so these amounts were not used in any earlier testing year."
BenefitsLink Message Boards

ATFAP and Normal Cost
"I have a plan that had a large prior year asset loss. It is a beginning-of-year valuation. Actuarial assets are less than 60% of FT. Does this mean, in the absence of additional contributions before October 1 to achieve a 60% FTAP, that there is no normal cost for the plan year due to the 436 accrual restriction?"
BenefitsLink Message Boards

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