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Senior Qualified Plan Administrator
Central Ohio Benefits Firm
in OH

Retirement Plan Administrator
TPA Firm in Jacksonville, FL
in FL

401k Service Administrator
Retirement Direct
in NC

Operations Specialist
Goldleaf Partners
in MN

Retirement Distribution Processor III
Alerus Financial
in MN

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Webcasts, Conferences

Basic IRA Training
November 14, 2017 WEBCAST
Wolters Kluwer

Legislative Updates: A Look Back at 2017 and Forward to 2018
November 16, 2017 in GA
Worldwide Employee Benefits Network [WEB] - Atlanta Chapter

First Annual ISCEBS and WEB Joint Networking and Social Event
November 16, 2017 in MD
Worldwide Employee Benefits Network [WEB] - Baltimore Chapter

Nuts and Bolts of Executive Compensation
American Bar Association Joint Committee on Employee Benefits [JCEB]

►See 109 Upcoming Webcasts and Conferences

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Audit Time: Do You Know Where Your Participants Are?
"[The DOL] has announced that it has expanded to the whole country a pilot program in which it asks plan administrators to provide current contact information for selected participants. The DOL considers it a breach of fiduciary responsibility if the plan doesn't know how to reach them.... On October 19, the IRS issued a memo explaining when examiners will not find a qualification failure if required minimum distributions haven't been made because participants couldn't be located.... [T]here are lots of practical steps to take and document."
Carol Buckmann, via 401kTV

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Financial Wellness Via Your 401(k)
"Those living paycheck to paycheck are probably your best customers when it comes to hardship withdrawals, loans and post-separation distributions. What can you do? ... Automatic enrollment, automatic escalation, etc ... Flexible account consolidation/aggregation provisions ... Eliminate hardship withdrawals ... Add 21st century loan provisions ... Consider adopting 'Deemed IRA' provisions."
Plan Sponsor Council of America [PSCA]

Sen. Sherrod Brown to Unveil Multiemployer Loan Program Legislation
"The bill ... would create a new office within the Treasury Department called the Pension Rehabilitation Administration. The funds would come from the sale of Treasury-issued bonds to financial institutions. The pension funds could borrow for 30 years at low interest rates.... The bill would also fund a program at the [PBGC] to finance any remaining needs of pension plans borrowing from the new program."
Pensions & Investments

Consumers Not Receptive to Employer-Provided Retirement Planning Resources
"Only about one third (35%) of U.S. consumers use or would use 'retirement planning resources provided through employer' while 41% do not or would not ... Younger Americans are most receptive, while pre-retirees had the biggest increase, of 15 percentage points, in receptivity. One in three (32%) Accumulator households does not know where their income in retirement will come from in 2017, and there was no real improvement compared to 2016."

Chamber Backs Mandatory Arbitration of Employee Benefit Issues
"The Chamber is backing the University of Southern California in its attempt to move a proposed class action over the fees associated with its retirement plan into arbitration. In a brief filed Nov. 6, the Chamber asked the U.S. Court of Appeals for the Ninth Circuit to rule that employment agreements with arbitration clauses -- like the ones USC required its workers to sign -- apply to disputes involving retirement plans governed by [ERISA]." [Munro v. Univ. of Southern Calif., No. 17-55550 (9th Cir., amicus brief filed Nov. 6, 2017)]
Bloomberg BNA


Scale, Experience, and Client Satisfaction matter.

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Is Open Architecture the Answer for Target Date Fund Managers?
"Currently, across mutual fund and collective investment trust (CIT) target-date products, the top three managers retain 62.6% of the market and the top 10 account for 88.9%, making it extremely challenging to successfully launch new products in the sector ... [A Cerulli report] suggests that one way for managers without their own funds to participate is through managing a sleeve of an open-architecture fund. According to Cerulli's survey of target-date managers, 50% offer open-architecture products -- 27% offer only open-architecture funds and 23% offer both open- and closed-architecture target-date products -- with the overall percentage up from 46% in 2016."
National Association of Plan Advisors [NAPA]

60-Day Rollovers: What Happens When Multiple Checks Have Been Issued?
"Individuals who receive multiple distributions from their IRA can generally roll over only one of the distributions as a 60-day rollover within a 12 month period.... There is one exception to this part of the rule. If an individual receives more than one check, from the same IRA, on the same day, then all distributions can be rolled over. This could happen if a custodian issues a separate check for separate investments in one IRA.... On the flip side of the 60-day rollover transaction, an individual can do as many deposits as they wish in order to complete a 60-day rollover."
Slott Report

Why You Shouldn't Borrow from Your 401(k) Account
"In effect, the loan offsets one of the chief benefits of a 401(k), the upfront tax deduction. But what if you're not in a pinch? Would it make sense to use a 401(k) loan as a convenient alternative to a loan with a higher rate? It might seem that way if interest rates were the only consideration, but those lost investment gains should be counted too. With big U.S. stocks in the Standard & Poor's 500 index up more than 15 percent this year, someone who borrowed $50,000 Jan. 1 would have missed out on about $7,500 in gains. And paid interest on top of that."
U.S. News & World Report

Disciplined, Confident and a Little Stressed: Millennials Report Positive 401(k) Saving Behaviors
"86 percent of Millennials, 90 percent of Gen Xers and 84 percent of Boomers [consider a 401(k) plan] a 'must-have' benefit. Millennials are especially reliant on 401(k)s for the money they'll need in retirement, with 78 percent saying a 401(k) is their largest or only source of retirement income.... [F]inancial stress has affected the job performance of more than a third of Millennials (35%), compared to 18 percent of Gen Xers and 11 percent of Baby Boomers. Not surprisingly, student loan debt impacts many Millennials, with 24 percent citing it as a source of financial stress."
Charles Schwab


Online Learning Course: 401(k) Plan Administration

Sponsored by International Foundation of Employee Benefit Plans [IFEBP]

Learn more about plan design issues, plan investments, fiduciary responsibility and plan fees, employee communications and investment education, automatic enrollment, participant loans, distributions, and plan amendment and termination.

PBGC, Sears Reach Agreement to Further Fund Pension Plans
"The Pension Benefit Guaranty Corporation and Sears Holdings Corporation have reached a new agreement that upon closing provides approximately $500 million in funding for Sears' two pension plans, including contributions already made by Sears since August 2017. The pension plans cover about 100,000 participants. Closing on this agreement should occur in about three months."
Pension Benefit Guaranty Corporation [PBGC]


Steps to Address America's Retirement Security Challenge: A Public Policy Point of View (PDF)
15 pages. "As the U.S. retirement system continues to evolve and individuals take on more responsibility for retirement planning, it's important to support those workers as much as possible in the transition.... [K]ey policy changes that will strengthen the current system.... [1] Encourage greater access to lifetime income products.... [2] Establish an alternative 401(k) safe harbor plan with higher deferral rates.... [3] Facilitate portability and consolidation of individuals' retirement assets.... [4] Permit some retirement savings to be used for short-term needs.... [5] End the Federal Budget practice of 'double counting' increases in the premiums that plan sponsors must pay to the PBGC.... [6] Revise nondiscrimination testing rules that currently encourage many plan sponsors to 'freeze' their DB pension plans."


Fiduciary Rule Fallout: Increasing the Cost of Retirement
"Research conducted by the U.S. Chamber found that 6 million investment accounts already face increased costs directly related to the Fiduciary Rule. Another recent study by the Securities Industry and Financial Markets Association (SIFMA) estimated $4.7 billion of compliance fees will be passed onto savers and investors following the fiduciary rule's implementation. The rising costs can primarily be explained by the change in the pricing of financial advice."
U.S. Chamber of Commerce

Benefits in General

Text of Fifth Circuit Opinion Rejecting Insurer's Argument That Discretionary Authority Transfers to SPD (PDF)
"The Summary Plan Description explains that certain benefits offset the long-term disability benefit amount, including '[p]ension benefits from a Verizon pension plan, if [the beneficiary] elect[s] to receive them.'... MetLife argues that selecting a trustee-to-trustee transfer constitutes 'electing to receive' pension benefits, while Thomason argues that such a transfer cannot be an election to receive the funds because he has no control over them ... We do not reach the actual meaning of 'elect to receive' under the Plan. Instead, we determine that the Summary Plan Description is ambiguous and thus we construe it in Thomason's favor." [Thomason v. MetLife, No. 16-10634 (5th Cir. July 18, 2017)]
U.S. Court of Appeals for the Fifth Circuit

New ERISA Disability Claims Procedures: Action Steps for Plan Sponsors (PDF)
"[T]he requirement that a plan administer may not prevent a claimant from seeking court review for failure to exhaust administrative remedies appears to open the door to more proceedings. The regulations suggest that in this instance, a court should apply a de novo standard of review ... This alone may provide incentive for claims administrators to ensure timely and accurate reviews."
Boutwell Fay LLP

Accounting for Pensions and Other Postretirement Benefits, 2017 (PDF)
28 pages. "At fiscal year-end 2016, the average discount rate used to calculate the present value of pension obligations decreased to 4.03%, compared with the 2015 rate of 4.33%.... The average projected benefit obligation (PBO) funded status (plan assets/PBO) was 81% at fiscal year-end 2016, a minor uptick from the 2015 level of 80%.... The fiscal year-end 2016 discount rate for other postretirement benefits ranges from 2.84% to 6.63% in the current survey, with an average of 4.04%. At fiscal year-end 2015, discount rates for companies included in this year's report ranged from 3.25% to 6.47%, with an average value of 4.28%."
Willis Towers Watson

New Tax Reform Bill: Major Changes to Executive Compensation Lead Impact on Benefits and Compensation Practices (PDF)
9 pages. "Employers that have used nonqualified deferred compensation plans to attract and retain highly compensated employees ... would need to consider alternatives to achieve their goals ... With the possible exception of incentive stock options, there would appear to be no reason for employers to grant stock options or stock appreciation rights.... [R]ule changes would ease the ability of employees to take hardship withdrawals and would reduce some of the complexity in administering hardship withdrawals.... As a taxable contribution, [Dependent Care FSAs] would be effectively eliminated as they would have no value to employees.... The Tax Bill does not eliminate Health Care Flexible Spending Accounts."
Mazursky Constantine LLC

Tax Reform Proposal Would Impact Savings Arrangements
"The Ways and Means Committee continues to make changes to the bill before the House of Representatives votes on it. The vote was expected to occur during the week of November 13, 2017, but may occur earlier. Meanwhile, the Senate is working on a tax reform bill of its own. Although the legislative process is still ongoing, [this article provides] a summary of the more significant provisions from the initial proposal that could become law and affect tax-favored savings arrangements."

Executive Compensation
and Nonqualified Plans

House Bill Could Prompt the Most Significant Changes in Pay Plan Design in a Generation
"The proposal would do away with the performance-based compensation exception to the $1 million pay cap under current Code Section 162(m).... Without the need to meet the performance-based pay exception, companies would no longer need to get shareholder approval of their plans for 162(m) purposes, nor would compensation committees need to set performance goals within the first 90 days of the performance period. They also would no longer be limited to using negative discretion only in making their bonus and LTI payout determinations."
Willis Towers Watson

on the BenefitsLink Message Boards

Seeking Financial Companies Willing to Issue Small Joint-and-Survivor Annuities
I'm terminating a plan for an employer/client. It is subject to the QJSA requirements. Two former employees have each about $6,000 in benefits. Neither will respond or send back an election for lump sum or direct rollover (with spousal consents). Which financial companies are willing to deal with such small amounts for QJSA annuities? Any other ideas are welcome.
BenefitsLink Message Boards

Safe Harbor Notice to Each Terminated Participant with a Balance?
Is it OK if non-employee participants are not given an annual Safe Harbor Notice? It seems non-employees don't need to receive it but we've always mailed it to everyone with a balance. If there is a DOL audit we want to be sure to have sent out all of what was required.
BenefitsLink Message Boards

'Top Hat' Plan for Physicians' Corporation in Affiliated Service Group
A corporation wants to have a plan for its employees, all of whom are physicians. We ruled out the use of a qualified plan, because a lot of non-physicians working alongside the physicians but in a separate entity would be considered leased employees and/or part of an affiliated service group -- so any plan for just the physicians would fail nondiscrimination testing. We're stuck as to whether the corporation can have a nonqualified plan. In order to be a top hat plan, a plan must be for a select group of management or highly compensated employees, and it seems unlikely that a group consisting of all of the physician employees could be "select." Although the leased employees and common-law employees of another entity that's part of an affiliated service group with the corporation would be treated as employed by a single employer for Internal Revenue Code purposes, we're not seeing a similar provision under ERISA for top hat purposes. Thoughts?
BenefitsLink Message Boards

Press Releases

DOL Obtains a Temporary Restraining Order to Protect Participants and Beneficiaries of Failing MEWA
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

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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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