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Fundamentals Series 14: Fiduciary Requirements
January 16, 2018 WEBCAST
FIS Relius Education

LA Advanced Pension & 401(k) Conference
January 25, 2018 in CA
ASPPA [American Society of Pension Professionals & Actuaries]

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Judge Rules Prudential Violated ERISA with Interest-Bearing Life Insurance Accounts
"A federal judge overseeing a putative class action against Prudential Insurance Co. has ruled that the company violated ERISA by using interest-bearing bank accounts to hold life insurance money instead of paying beneficiaries directly.... The plaintiffs were beneficiaries of deceased workers employed by JPMorgan and Con-way Inc." [Huffman v. The Prudential Ins. Co. of America, No. 10-5135 (E.D. Penn. Dec. 7, 2017)]
The Legal Intelligencer

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The New CEBS.

The new Certified Employee Benefit Specialist® (CEBS®) program has arrived. The curriculum is focused and dynamic. The delivery is engaging. And where you want to go? You're going to get there faster. Learn more.

Excessive Fee Suit Targeting Fujitsu Results in $14 Million Settlement
"The lawsuit contended that among defined contribution plans with more than $1 billion in assets, the average plan has costs equal to 0.33% of the plan's assets per year. However, in 2013, total fees for the Fujitsu plan amounted to approximately 0.88% of plan assets, or about $11,400,000. In 2014, total fees amounted to approximately 0.90% of Plan assets, or about $11,900,000."
PLANSPONSOR

Courts Weigh in on Challenges to University Retirement Plans
"These rulings, most of which allowed claims to proceed past the motion to dismiss stage, highlight the variation in standards courts apply when weighing ERISA fiduciary suits. Moreover, they underline the need for plan fiduciaries to review the performance and fees of their plans' service and investment providers on a regular basis to determine whether the providers' fees are reasonable and their continued retention is appropriate."
Steptoe & Johnson LLP, via Lexology

401(k) and 403(b) Education: How to Set Up Employees for Success
"When ... employees [were asked] why they had not joined the retirement plan, only a minority blamed stretched finances for their decision. About 40% said they were 'too busy' and 19% said signing up was 'too much hassle.' That means there's room for better, participant-focused 401(k) education efforts to move the needle."
ForUsAll

Text of Enrolled Actuaries Pension Examination EA-2, Segment F, Fall 2017 (PDF)
111 pages. Full text of Nov. 7, 2017 exam with answers, published online by IRS.
American Society of Pension Professionals & Actuaries [ASPPA]; Joint Board for the Enrollment of Actuaries [JBEA]; Society of Actuaries

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Managing retirement plans isn't getting any easier. But – you have the option to delegate many investment responsibilities to a trusted provider. Learn more through the free case studies, whitepapers, and RFP builder in our OCIO resource centers.

Why IRA Holders Need to Scrutinize IRS Form 5498
"The major of piece of information to review on Form 5498 is the prior year-end 'fair market value' of the account (Box 5). If you are subject to taking required minimum distributions ... this is the value the IRS would look at first to figure out whether you took your full RMD.... The trouble is, Form 5498 may not arrive until after you've already filed your tax return."
Morningstar

SEC Offers Free Financial Planning Tools for Retirement Savers and Investors
This page provides links to the following tools, developed by the SEC: [1] 401(k) and IRA Required Minimum Distribution Calculator ... [2] Compound Interest Calculator and Savings Goal Calculator ... [3] Social Security Retirement Estimator ... [4] Retirement Ballpark Estimator ... [5] Mutual Fund Analyzer ... [6] 529 Expense Analyzer.
U.S. Securities and Exchange Commission

Tax Reform: Comparison of House and Senate Tax Cuts and Jobs Act Versions (PDF)
7-page chart provides side-by-side comparison summary of current law and the provisions of each bill that pertain to retirement and individual savings arrangements.
Ascensus

Staying in the Market vs. Annuitizing: What Return Would You Need?
"Two recent comments effectively asked what market return would be needed to make buying an immediate annuity (SPIA) in the future a better deal than buying a deferred income annuity (DIA) today.... Both questions are posed as the rate of stock returns these strategies will 'need' to provide outcomes identical to buying a DIA now or postponing Social Security benefits. The needed rates of return, however, aren't the key to this analysis[.]"
The Retirement Cafe

Retirement's Revolving Door: Why Some Workers Can't Call It Quits
"39 percent of Americans 65 and older who are currently employed had previously retired. And more than half of those 50 and older who are not working and not searching for work said they would work if the 'right opportunity came along' ... This isn't about older folks returning to work because they need the dough. This is about older folks returning to work because they miss the challenges, the accomplishments and, most important, the collegiality."
Kaiser Health News

Buy Bitcoin in Your Retirement Fund? Only If You Think Riding a Rollercoaster Without a Safety Harness Is a Good Idea
"Jack Bogle: 'Did I make myself clear? Bitcoin has no underlying rate of return. You know bonds have an interest coupon, stocks have earnings and dividends. There is nothing to support Bitcoin except the hope that you will sell it to someone for more than you paid for it. Bitcoin may well go to $20,000, but that won't prove I'm wrong. When it gets back to $100, we'll talk.' "
The Washington Post; subscription may be required

EU Launches New Association to Encourage Cross-Border Pension Arrangements (PDF)
"It has been a long-term goal of many at the European Commission (EC) and its agencies to promote cross-border pension arrangements within the EU, to promote the mobility of the European Union (EU) labor market, reduce costs and encourage savings.... For those employers who are interested in rationalizing their pension plans within the EU, some recent developments, including a new alliance to support cross -border pensions, may make such efforts more possible."
Groom Law Group

[Opinion]

Strengthen Retirement Security by Focusing on Lifetime Income Strategies
"[S]upplemental DC plans were not designed to provide retirement security.... Demographic and economic trends demand the consideration of lifetime income strategies ... Account balance is not the proper measure of retirement security ... Effectively managing income in retirement is more important ... Policymakers and plan sponsors must give participants greater options for lifetime income."
Georgetown University Center for Retirement Initiatives

Short-Term Delay in Disability Claims Procedures Includes Very Short Fuse
"Some carriers or other providers may have already changed their systems to comply with these new rules and therefore will not see a point in changing their processes at this point. If the delayed effective date will apply, then employers need to make sure to get any necessary plan amendments in place before January 1, 2018 and be prepared to communicate this change to participants."
HUB International

The Tax Cuts and Jobs Act: Executive Compensation Action Items
"[1] Companies should determine the extent to which their currently outstanding performance-based awards will satisfy the transition rule. [2] Companies should consider accelerating into 2017 payments that would be made [to] individuals who would have been NEOs for 2017, except that they terminated employment in 2017, ... to the extent that such payments would not satisfy the transition rule and are permissible under Section 409A. [3] Companies and compensation committees should consider how they can reduce the impact of the lost deduction for performance-based compensation for future cash and equity awards.... [4] Compensation committees should begin to plan for the reporting of non-deductible compensation in their 2019 proxy statements."
Winston & Strawn LLP

RMD in Year of Plan Termination
A participant in a traditional DB plan retired and elected a life annuity to begin at age 65. When he is 85, the plan sponsor terminates the plan and lump sums are offered to all participants, including current retirees. The participant elects to rollover his remaining benefit, and the rollover is processed on June 15, after he's already received 6 life annuity payments during the year. Does an RMD equal to 6 monthly payments need to be paid before the rollover is processed?
BenefitsLink Message Boards

Handling Already-Withhold Income Tax on a Distribution, Then a Buy-Back
Employee took a cash distribution in early 2017. She's been rehired and wants to restore her account because there was enough non-vested money forfeited to warrant the restoration. I'm good with her sending back the entire amount and with our restoring her account. What about the 20% withholding on the cash out? A 1099-R will be sent on the cash out. How does the employee rectify or "get back" the withholding?
BenefitsLink Message Boards

Handling a Request for Distribution While Aware of Potential QDRO
An employer acting as Plan Administrator learns of a pending divorce of a participant and that a potential domestic relations order may be completed as part of the property settlement. To date an order has not been received and the Plan Administrator is not sure whether the divorce has been finalized. The participant is requesting a distribution from the plan, which he's entitled to receive under the terms of the plan. Is the Plan Administrator required to inquire about the potential Order prior to issuing a distribution? Must the plan administrator "pump the brakes" on the distribution?
BenefitsLink Message Boards

Pre-Tax Deferrals Continue After Hitting $270k Comp Cap?
An employee has reached the $270K salary cap but not the $18K deferral limit so deductions are still taking place. Are the deferrals still exempt from the applicable taxes even though the salary limit has been reached? Or does the tax savings stop because the $270k limit has been reached?
BenefitsLink Message Boards

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