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Retirement Plans Newsletter April 25, 2018 |
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Jobs
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Webcasts, Conferences What to Expect When You're Requesting: Investment Advisor RFPs and Due Diligence
Retiree Liabilities for Dummies - Solutions for Managing Pension, Healthcare and Life Obligations
Best Practices for an Effective Retirement Plan Committee
Best Practices in Employee Benefits Communication
Fiduciary Compliance in ESOP Transactions: Recent DOL Settlement Agreements
ERISA Litigation Update: New Trends and Significant Changes
New SEC Proposed Best Interest Rule and DOL Fiduciary Rule Update: What Plan Advisers and Employers Need to Know
Loans and In-service Withdrawals
Loans Issues and Hardship Rules That Complicate Administration
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Discussions |
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This Newsletter:
BenefitsLink Health & Welfare Plans Newsletter:
Message Boards Digest:
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Senior Pension Administrator|
[Guidance Overview]
The SEC's Fiduciary Proposal: Form CRS "[T]he SEC describes Form CRS as an additional disclosure that is no more than four pages with a 'mix of tabular and narrative information.' The Form would contain the following sections: [1] introduction, [2] description of relationships and services offered, [3] statement of the applicable conduct standard associated with the services, [4] fees and costs, [5] a comparison of brokerage and investment advisory services for firms that are not dually-registered, [6] conflicts of interest, [7] where additional information is available, including whether the firm or its registered representatives have reportable legal or disciplinary events and a contact for complaints, and [8] key questions clients should ask the firm's representative (or online question and answer in the case of robo-advisers and online-only broker-dealers)."
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[Advert.]
Evaluating Your Third-Party Administrator: Are You Getting What You're Paying For?
May 2 webinar will enable entities responsible for identifying, selecting, and monitoring their TPA to track performance and assess results, as well as identify opportunities to create additional value. Discount for BenefitsLink readers. |
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[Guidance Overview]
"Divided into three primary parts, the rule and guidance package would, among other things: [1] establish a best interest standard for broker-dealers; [2] create a mandatory disclosure form summarizing brokers' and investment advisers' relationships with their clients; and [3] offer a new official interpretation affirming and clarifying the standard of conduct for investment advisers. The proposals would also restrict brokers from using the titles 'advisor' or 'adviser' in certain contexts and/or communications."
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SEC Rule Would Create Distinct But 'Comparable' Regimes for RIAs and Broker-Dealers "The new regulatory regime would for the first time codify brokers' responsibility to put clients' interests ahead of their own ... Brokers would need to make specific new disclosures around material conflicts of interest and implement policies and procedures to mitigate conflicts -- if not eliminate them altogether."
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Interesting Angles on the DOL's Fiduciary Rule, Part 88 "It is likely ... that the DOL will follow suit and issue a proposed regulation re-defining fiduciary advice -- perhaps more broadly than the new 5-part test, but less expansive than the Fiduciary Rule. The DOL will also need to issue prohibited transaction exemptions.... [The author believes] that the DOL exemptions will, for the most part, follow the SEC's disclosure requirements, but perhaps adding additional protections for retirement investors."
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403(b) University Cases Move Forward "The lawsuits allege that ... plan fiduciaries breached duties of prudence and loyalty, and engaged in prohibited transactions.... [T]he court allowed plaintiffs' claim that defendants failed to solicit competitive bids for record keepers ... [and] claims alleging a failure to adequately monitor 'revenue sharing' agreements and use of multiple record keepers to proceed." [Cassell v. Vanderbilt, No. 16-2086 (M.D. Tenn. Jan. 5, 2018)]
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[Advert.]
Now is a great time to join Worldwide Employee Benefits Network (WEB)
Worldwide Employee Benefits Network helps me connect with thought leaders in the Benefits Industry. Join WEB today at www.webnetwork.org. |
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Ex-American Airlines Workers Want Class Status in 401(k) Fee Suit "The workers are seeking class status for at least 20,000 participants in the retirement plan ... At issue in the case is American's decision to include in the plan a credit union fund that allegedly performed like a low-interest checking account. American allegedly used more than $1 billion in plan assets invested in the credit union fund as working capital to make investments and provide loans and other services to its customers, for which it earned substantial profits, the workers said."
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Recent Developments in ESOP Litigation Summary of 10 recent court opinions and consent orders, 6 recent complaints, and one settlement, most initiated by the U.S. Department of Labor, all involving ESOP valuation and fiduciary issues.
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Scoring the Progress of Retirement Savers (PDF) 16 pages. "Current savers have a median income replacement percentage that is a full 25 percentage points above those who are eligible but not active in their plans.... Participants who contribute under 3% of pay have a median lifetime income replacement percentage of under 60%, while those who contribute 10% or more have a median retirement income replacement of over 100%.... Contrary to long-standing assumptions, tax law changes will affect savings decisions by lower income earning households the most."
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Withdrawal Liability Options for Multiemployer Pension Plans Dangled by PBGC "Under [the 'Two-Pool Method'], a contributing employer is only responsible for the underfunding of its own employees and NOT the underfunding related to all employees of all contributing employers. The issues the PBGC has with [this] are [1] how does a contributing employer move from one pool to the other, and [2] what happens once there are no employers left in the original pool ... How a plan handles these issues will likely determine whether the PBGC approves its alternate method or not."
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[Opinion]
Why Life Annuities Belong in 401(k) Plans "In a recent Gallup poll, 85% of pre-retirees stated that they needed more guaranteed monthly income than Social Security could provide, but only 27% were willing to give up access to their assets to accomplish that feat.... People seek guarantees but also control.... Social Security provides guaranteed income without control and yet is highly popular.... Ditto for traditional pension plans. It turns out that people are quite happy to relinquish their money in exchange for a future income stream, as long as the exchange is framed properly."
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Benefits in General |
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Common Cyber-Risks Facing Your Benefit Plans "Spear phishing involves a specific target in mind -- one ... that could be an employee of a health and welfare or pension fund.... Ransomware involves a malicious link or attachment within a phishing e-mail.... Business e-mail compromise (BEC) targets specific businesses or individuals who wire money.... Cybersecurity is no longer a matter just for the information technology (IT) department.... A separate but linked strategy for cyberfraud (the social engineering component) and cybersecurity (the IT infrastructure component) should be centrally managed with defined objectives and overarching principles."
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Selected Discussions |
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Would Sole Proprietor/DB Plan Sponsor Need to Live and Work in the U.S.? Does a sole proprietor who establishes a defined benefit plan need to reside and work in the United States? I would think you'd need to reside here, and the source of your self-employment income would need to be from business conducted in the U.S.
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Taking a 401(k) In-Service Distribution to Lower Assets and Thereby Qualify for SSI Participant has a minor child with a disability who qualifies for SSI payments. Participant has a small balance in a 401(k) that needs to be distributed so that resources are below the threshold for SSI eligibility. Participant is only 35, so finding a distributable event is difficult. Has anyone had this situation?
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Press Releases |
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BenefitsLink.com, Inc.
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Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager
BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2018 BenefitsLink.com, 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 BenefitsLink.com, 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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