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The Standard
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BlueStar Retirement Services, Inc.
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[Official Guidance]

Text of PBGC Interest Rate Update for Benefits Payable in Terminated Single-Employer Plans, November 2017
"The November 2017 interest assumptions under the benefit payments regulation will be 0.75 percent for the period during which a benefit is in pay status and 4.00 percent during any years preceding the benefit's placement in pay status. In comparison with the interest assumption s in effect for October 2017, these assumptions are unchanged."
Pension Benefit Guaranty Corporation [PBGC]


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[Guidance Overview]

Spending Quality Time with Your Pension Plan Actuary
"Employers sponsoring single employer pension plans will see the new mortality tables go into effect first for the 2018 valuation which will probably increase the annual contribution due to be paid to the plan in 2019.... Many plans have been drafted to incorporate by reference the statutorily dictated mortality tables and may not require an amendment to adopt these new mortality tables, but any defined benefit pension plan should be reviewed to determine whether it may require updating in one of the various areas impacted by these new mortality tables."
Winstead PC

DOL Is Stepping Up 'Missing Participant' Pension Plan Audits
"Following the success of the Philadelphia pilot program, the initiative is now going national. DOL auditors will monitor plan sponsors' failures to locate and contact missing participants and will treat the failure to do so as a breach of fiduciary duty under [ERISA], which can trigger substantial penalties."
Society for Human Resource Management [SHRM]

October Retirement Deadlines
"Advisors should be contacting all clients where a trust inherited an IRA last year and reminding the trustee of the trust about the documentation requirement to be sure the deadline is not missed. If you are the trustee of a trust that inherited an IRA last year, you need to make sure that a copy of the trust has been provided to either the plan administrator or the IRA custodian by the October 31st deadline."
Slott Report

Prudential Beats Appeal Over Alleged 401(k) Kickback Scheme
"Prudential didn't act as an [ERISA] fiduciary in its role as the service provider and directed trustee of Ferguson Enterprises' retirement plan ... the Second Circuit held ... While Prudential may qualify as a fiduciary with respect to certain separate accounts it managed, the participant failed to properly plead a breach of fiduciary duty related to those accounts, the three-judge panel said." [Rosen v. Prudential Ret. Ins. & Annuity Co., No. 17-0239 (2d Cir. Oct. 11, 2017)]
Bloomberg BNA


Reforms, Regulations & Retirement Realities

Sponsored by ASPPA

This October the nation's retirement industry elite will converge at ASPPA Annual, in our nation's capital, with insights from industry insiders, regulators, pundits and the nation's leading voices. Join us!

Climate Change Defines the Fiduciary (PDF)
"It is now high time for fiduciaries to begin or continue a process to identify and manage both the investment risks and opportunities arising from climate change in accordance with their fiduciary obligations under [ERISA], especially [DOL] Interpretive Bulletin (IB) 2015-01. This process would encompass engaging plan service providers, particularly investment managers, on what steps they are taking to address both the risks and opportunities, recognizing that critical disclosures continue to evolve. This process would also include shareholder engagement with issuers on improved disclosure and transparency regarding climate risks in accordance with IB 2016-01."
Stradley Ronon via Bloomberg BNA Tax Management Planning Journal

Impact of the Fiduciary Rule on Plan Sponsors
"Some of your service providers were not fiduciaries before June 9, but now they are. You need to understand what their new role is, how this changes their services, how it changes their compensation and what new conflicts of interest they may have.... Recommendations to participants about taking a distribution from the plan and rolling it over to an IRA are now fiduciary advice. This requires an advisor to engage in an analytical process before making a recommendation. And this may mean recommending that a terminating employee leave his account in the plan."
Drinker Biddle

How Advisers Can Solve the Most Difficult DOL Rule Documentation Requirement
"As part of acting in the client's best interest when doing a 401k to IRA rollover, the new DOL fiduciary rule requires advisors to assess ... the fees and expenses of both the client's existing 401k and the IRA which they are rolling into.... [H]ow can an advisor find out what the admin fee is that the client is currently paying in the 401k? And what fees and expenses are included in the 401k admin fee?"

ERISA: Why the Fiduciary Rule Is Not a New Idea
"[P]rotecting retirement accounts from excessive fees or unnecessary risk is not a new idea and predates the U.S. [DOL's] fiduciary rule by more than 40 years.... Years later it became obvious what ERISA didn't cover: individual retirement accounts.... The same money that was governed by ERISA one day was the next day subject to a weaker suitability standard when it was rolled over into an IRA[.]"
U.S. News & World Report

Funding Your Retirement
"When it's time to tap savings, some use the income their portfolio generates to support spending, or don't have a plan to use all sources of return and to use their assets in a coordinated way to generate the cash flow desired. That brings us to the final step of retirement planning--distribution.... Aim to cover essentials with predictable income sources ... Fund discretionary expenses with fluctuating income ... Generate cash flow when you rebalance your portfolio."
Charles Schwab

House Approves TSP Modernization Bill
"The TSP Modernization Act (H.R.3031) ... would allow federal employees and retirees to make multiple age-based withdrawals from their Thrift Savings Plan accounts and remain eligible for partial withdrawals after they leave government as well.... The bill also would allow those receiving monthly payments to change the amount of their annuity at any time, instead of only once per year. Participants could change the frequency of payments as well."
Government Executive

Benefits in General

[Guidance Overview]

What to Do -- or Not Do -- with the Disability Claims Rules?
"At this point, it is unclear what, if any, modifications might be considered to the final rules. Because ERISA-governed plans are already required to include adequate claims procedures, following existing procedures should be sufficient during this interim review."
Holland & Hart LLP

Getting Through the 5500 Season Without Xanax
"Always start to fill out your questionnaires early.... Check every line of your vendor's draft.... Cooperate with your auditor to get the audit finished on time.... Still having problems? Consider a new auditor."
Cohen & Buckmann, P.C.

Executive Compensation
and Nonqualified Plans

Stock Compensation: 2017 Assumption and Disclosure Study (PDF)
38 pages. "When valuing stock options, companies continue to rely heavily on the Black-Scholes option pricing model, with 82% of Large companies disclose relying solely on the use of that model in valuing their stock compensation awards.... [In] 2012 the number of stock options granted compared to the number of restricted stock awards was almost 1.4 to 1, while by 2016 it had dropped to about 1.2 to 1."

Ohio Supreme Court: SERP Excluded from Municipal Income Tax
"After years of litigation, a former National City executive has prevailed in a hard fought tax dispute with the city of Cleveland.... The case provides that a Supplemental Executive Retirement Plan (SERP) must be excluded from the Cleveland municipal income tax as a 'pension' benefit. The ruling buttresses a 2014 Franklin County Court of Appeals decision that reached the same result in a dispute between the same taxpayer and the city of Shaker Heights. The cases could have implications for taxpayers with SERP income across the state." [MacDonald v. Cleveland Income Tax Bd. of Review, No. 2016-0778 (Ohio Sept. 26, 2017; unpub.)
McDonald Hopkins

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