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Executive Compensation Attorney
Harter Secrest & Emery LLP
in NY

Pension Plan Administrator
Altigro Pension Service, Inc.
in NJ

Retirement Plan Administrator
3(16) Fiduciary Services

Director of Plan Administration Retirement Plan Services Group
CliftonLarsonAllen LLP
in IL

Retirement Services Benefit Analyst
in NC, SC

Institutional Investment Account Specialist
SunTrust Bank
in VA

Defined Contribution Compliance Analyst
in CO

Production Coordinator
in CO

Assistant Manager-Eligibility/Participant Services
Carpenters Southwest Administrative Corporation (CSAC)
in CA

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[Official Guidance]

Text of Treasury Department Letter Approving Benefit Reductions by International Association of Machinists Motor City Pension Plan (PDF)
"In consultation with the Secretary of Labor and the Pension Benefit Guaranty Corporation, Treasury has determined that the Plan is eligible to reduce benefits under MPRA and that your application satisfies the requirements of subparagraphs (C), (D), (E), and (F) of section 432(e)(9) of the Internal Revenue Code, as added by MPRA." [Letter dated Nov. 6, 2017]
U.S. Department of the Treasury


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[Guidance Overview]

Interesting Angles on the DOL's Fiduciary Rule, Part 69
"While the Best Interest Contract Exemption (BICE) is greatly simplified during the transition period, there is more than meets the eye, and broker-dealers and RIAs need to consider whether their practices for compensating advisors encourage advice to retirement investors that may not be in the best interest of those investors. Certain compensation practices are more risky than others. This article discuss some of the arrangements that pose the greatest risks."

Text of District Court Decision Granting Preliminary Injunction Against Anti-Arbitration Clause of BICE, and Staying Further Proceedings (PDF)
"Although the Court recognizes the presumption of good faith given to governmental actors when voluntary cessation is involved, the anti-arbitration condition remains in place, the potential actions of two different agencies are implicated, the rulemaking process can be lengthy, and Thrivent requires certainty for purposes of advance planning and legal compliance.... In order to comply with the anti-arbitration condition's applicability date, Thrivent must take actions now that involve changes to its business model. In addition to the expenditure of time and money that these changes necessitate, undertaking such changes may irreparably disadvantage Thrivent against its competitors and with respect to its members.... Following the issuance of the preliminary injunction, the Court hereby stays these proceedings, pending further order of the Court. The parties shall jointly file a status report every 60 days addressing whether a continued stay of proceedings is necessary." [Thrivent Financial for Lutherans v. Acosta, No. 16-3289 (D. Minn. Nov. 3, 2017)]
U.S. District Court for the District of Minnesota

Thrivent Financial Wins Battle Over DOL Arbitration Ban
"[The federal district judge's] ruling means that Thrivent won't be considered out of compliance with the fiduciary rule's best-interest-contract exemption as a result of maintaining its alternative dispute resolution program.... The decision is the latest development in a dispute that started a year ago when Thrivent accused the agency of exceeding its statutory authority by attempting, with its new fiduciary rule, to force all disputes into federal court rather than allowing for alternative dispute resolution methods." [Thrivent Financial for Lutherans v. Acosta, No. 16-3289 (D. Minn. Nov. 3, 2017)]
Bloomberg BNA

Fiduciary Rule Update: DOL Proposes Delay in Compliance with PT Exemptions
"The three exemptions that would be delayed from full implementation under the fiduciary rule, other than the Impartial Conduct Standards, are [1] various disclosure and other requirements for the Best Interest Contract Exemption (BICE); [2] the class exemption for principal transactions, and [3] inclusion of variable and indexed annuity transactions under BICE.... [The authors] believe it likely that OMB will expedite its review and approve the DOL's request within a few weeks. The DOL, in turn, is then expected to quickly adopt the compliance extension. Of course, DOL must take final action by the end of the year to avoid implementation of the full rule."


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Reenrollment of Your Participants in Target Date Funds: The Price Is Right ... or Is It?
"[O]ne of the most common times for a plan sponsor to face the decision of re-enrolling the entire plan into target date funds is at a provider change.... Many vendors are offering lower administrative fees if plan sponsors choose to re-enroll the plan into their proprietary target date funds. So how do you make that decision? Is it a fee decision or an investment decision? And how do you run a request for proposal (RFP) taking this into account?"
Paul L. Powell

Why Automating Retirement Savings May Not Be Enough
"There is no doubt that automatic retirement savings plans do considerable good. They prod us into getting started on a path of saving regularly for our futures. The problem arises when we see them as a complete solution, rather than one piece of a complex and difficult set of behaviors that we will need to perform and integrate into our lifestyles."
Psychology Today

Pension Finance Watch, October 2017
"October's capital market results were beneficial for typical pension plans. The Willis Towers Watson Pension Index increased by 0.5% to 75.3 -- the highest level in over two years. Strong equity returns were the primary influence on this month's outcome."
Willis Towers Watson

Proposed Tax Bill Includes Language to Expand MEPs -- Dramatically
"The proposed language in the Tax Bill, if signed into law, will effectively negate the authority behind the [DOL's] Advisory Opinion 2012-04A by acknowledging that the adopters within a 413(c) multiple employer plan are not to be separated out with individual filing responsibilities and treated as separate plans. This means that the current requirement for Open MEP's that include filing individual Form 5500's, requiring individual plan audits for those adopters whose size makes such an audit a requirement, and the need for an individual ERISA Bond will disappear under the new law if it is enacted."
The Platinum 401k, Inc., via LinkedIn

Tax Reform Surprise: Congress Slips in 401(k) MEP Broadside
"H.R.1 introduces a brand-new subsection to Section 401 -- subsection (o). Within this new subsection resides language that just may change the nature of the retirement plan industry. The proposed new 401(o) subsection is titled 'Special Rule for Applying Non-Discrimination Rules to Older, Longer Service and Grandfathered Participants.' Further down, specifically on Page 157, line 10 of H.R.1, sits paragraph 401(o)(1)(H). It reads as follow: '(H) TREATMENT AS SINGLE PLAN.--For purposes of subparagraphs (E) and (G), a plan described in section 413(c) shall be treated as a single plan rather than as separate plans maintained by each participating employer.' "
Fiduciary News


Common Misperceptions About Using the Actuarial Approach for Personal Financial Planning
"[The authors] have concerns about stochastic models that promise higher levels of spending without properly quantifying the additional risk. [They] also have concerns about blindly relying on the results of these models, particularly over extended periods of time without adjustment. And while no one knows what future investments will earn, we do know how much insurance companies are currently charging to provide income for life based on life annuity quotes.... [T]his 'known' market pricing information can be useful in developing a low-investment-risk Actuarial Budget Benchmark that you can use in combination with the other approaches you are using to make better financial decisions."
Ken Steiner, FSA Retired

Benefits in General

Employee Benefit Provisions in the Proposed House Tax Bill
"The [proposed] rules raise many issues. For example, how do you tax nonqualified deferred compensation that has vested, but whose value is wholly contingent on future events? Will there be a reconciliation of the taxes that are paid when deferred compensation vests with the amount (including earnings) that is eventually paid? Special complications apply to existing awards granted before 2018 but that will not vest until after 2017."
Nixon Peabody LLP

Executive Compensation
and Nonqualified Plans

House Draft of Tax Reform Bill Contains Opportunities and Surprises for Stock Compensation
"Among those who receive grants of incentive stock options (ISOs), much rejoicing would occur if the AMT were repealed. Companies might then use incentive stock options more frequently.... Stock options and stock appreciation rights could get caught up in the definition of NQDC, at least in the House draft legislation. If so, that could lead to taxation at vesting! However, considering the way in which stock options and SARs were initially penalized in the early versions of the Section 409A regulations, we would expect that if this provision continues it will be amended to apply only to discounted grants."

Proposed Tax Bill Changes Are Worse Than We First Reported
"The Bill would essentially end the deferral of compensation, supplemental executive retirement plans, and excess plans, as we know them by replacing Code Sections 409A and 457A with a new Code Section 409B, effective for services performed after December 31, 2017.... The Transition rules provide that all deferred compensation amounts and accrued benefits as of December 31, 2017 will be grandfathered under the rules of 409A until 2025. In 2025, those amounts when the will recognized as income, unless they remain subject to a substantial risk of forfeiture.... Supposedly another version of the Tax Bill is expected this week, so everything in here may be superseded."
Winston & Strawn LLP

Proposed Tax Bill Would Make Big Changes to (and Create New Opportunities for) Executive Compensation
"[T]ax-exempt and governmental employers have been dealing with these rules for decades, and these employers still manage to provide deferred compensation to their executives. In some ways, tax-exempt employers have less flexibility to design these types of plans than for-profit employers, but in other ways, tax-exempt employers think quite clearly and strategically about the mix of incentive-based pay and supplemental retirement benefits. Second, the Proposed Act will not be the final word on these types of arrangements. Even if the Proposed Act's terms remain in a final bill that becomes enacted (a big 'if'), the Proposed Act directs the Treasury Department to issue regulations that define certain terms and carve out exceptions."
Porter Wright Morris & Arthur LLP

Companies Can Safeguard Pay Data, with Limits, SEC Staff Says
"[SEC staff] responded to an inquiry about investor disclosures under 1933 Securities Act Rule 701(e). The regulation allows companies to use unregistered securities as part of a compensatory benefit plan. The plan must be delivered to investors, electronically or otherwise. The staff said it understands that companies using electronic delivery are concerned about the possible disclosure of sensitive corporation information, and that standard safeguards, such as log-in requirements, are permissible. However, the safeguards can't be unduly burdensome, according to the staff."
Bloomberg BNA

on the BenefitsLink Message Boards

Pickup Contributions for Past Service
Municipal defined benefit plan with employer pickup contributions (yes -- formal action was taken when implemented). Town is amending plan to retroactively include position that was previously excluded. Employee will need to make up contributions for period of credited service she will be granted (and she will start contributing prospectively for future service as well). Do the contributions for the period of past service need to be made on an after-tax basis, or is there some way to draft the plan so that these contributions are picked up by the employer as they would have been if she had been included all along? I know she can't be given a choice, but can the plan specify that payment of the past contributions will be paid over a certain period and will be picked up by the employer? I have the same question for making up contributions after returning from a leave of absence. If the plan bridges service and requires the participant to contribute for period of leave, can these be picked up?
BenefitsLink Message Boards

Law Firm Sponsors Two Plans; OK to Add Non-Elective Safe Harbor to Plan for Partners and Staff?
A law firm sponsors two plans, one for the Associate attorneys (deferrals only), the other for Partners and Staff (deferrals and new comparability profit-sharing contribution). The plans always have passed coverage testing. Can the Partners and Staff plan add a non-elective safe harbor?
BenefitsLink Message Boards

Press Releases

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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2017, 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, 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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