Retirement Plans Newsletter

May 14, 2018

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Jobs

Experienced Defined Benefit Plan Administrator
United Retirement Plan Consultants
in CA, OH, RI, WA

Senior Plan Administrators
MGA Consultants Inc.
in MD, NC

Associate Consultant / Retirement Plan Administration
Spectrum Pension Consultants, Inc.
in CA, HI, WA, Telecommute

Retirement Plan Consultant
Retirement Solution Group, LLC [RSG]
in IL

►See 132 Jobs

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Webcasts, Conferences

New ERISA Disability and Claims Appeal Regulations in Effect after April 1: What to Do Right Now to Comply
May 21, 2018 WEBCAST
Clear Law Institute

Digging into the SEC's Proposal for RIAs Regarding Retail Investment Standards
May 23, 2018 WEBCAST
Drinker Biddle & Reath LLP

Reg BI - What Does "Best Interest" Mean to Broker-Dealers, Is it Just a Suitability-Plus Standard, and More
May 30, 2018 WEBCAST
Drinker Biddle & Reath LLP

Coming to Grips with Qualified Business Income
May 30, 2018 WEBCAST
ERISApedia.com

Coming to Grips with Qualified Business Income
May 31, 2018 WEBCAST
ERISApedia.com

Trends in Government Audits and Investigations & When the FBI and DOL Shut Down a Local TPA
June 20, 2018 in TX
ASPPA Benefits Council [ABC] of Dallas/Fort Worth

Decision Making for ESOP Sustainability
July 17, 2018 WEBCAST
National Center for Employee Ownership [NCEO]

Is Your Nonqualified Plan Up to Par?
May 24, 2018 WEBCAST
Voya Financial

►See 156 Upcoming Webcasts and Conferences

►See 1387 Recorded Webcasts


Discussions

New Topics on the BenefitsLink Message Boards

New Comments and Topics

All Topics, Grouped by Forum


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[Official Guidance]

Text of PBGC Interest Rate Update for Benefits Payable in Terminated Single-Employer Plans, June 2018

"The June 2018 interest assumptions under the benefit payments regulation will be 1.25 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 assumptions in effect for May 2018, these assumptions represent an increase of 0.25 percent in the immediate rate and are otherwise unchanged."
Pension Benefit Guaranty Corporation [PBGC]

[Advert.]

Bring Employee Benefits Education to You

Sponsored by International Foundation of Employee Benefit Plans [IFEBP]

With On-Site Education from the International Foundation, your staff can receive high-quality education in a customized, one-of-a-kind learning experience. Avoid the cost and inconvenience of travel, and let us bring the education to you! Learn More.


[Guidance Overview]

The DOL Fiduciary Rule and Related Exemptions: Where the Heck Are We Now?

"Noting the significant investment of time and money spent by the benefits community to comply with the New Rules and its exemptions, FAB 2018-02 provides that the DOL will not pursue prohibited transaction claims against advisors who continue to work diligently and in good faith to comply with the New Rules and exemptions. A footnote assures readers that the IRS concurs with this approach. Therefore, an advisor who is giving rollover advice but complies with the impartial conduct standards of BICE ... will not be subject to enforcement action by the DOL."
Ferenczy Benefits Law Center

Frequent 401(k) Audit Findings: Late Remittances

"DOL has been very clear that the 15th business day is not a safe harbor and, upon examination, will frequently find that contributions made even one day after the pay date can be late if the Sponsor has demonstrated a history of remitting on or before the payroll date."
Dufek & Company

Correcting DB Plan Errors (PDF)

"Errors can occur in following the provisions of the plan document, applying regulatory guidelines, or processing plan data. For example, you may find that a participant was not paid in timely fashion, the plan document was not amended, or a benefit was miscalculated. If you identify an error, what do you do? Fortunately, the [IRS] has established programs for correcting errors in a relatively easy manner."
Milliman

Private Equity Firms See a Lot to Like with DC Provider Investments

"There's a lot to like about the retirement services industry, which helps explain why private equity investors are taking a shine to the sector. Guaranteed growth is at the top of the list. 'They are looking for growth sectors with stable cash flows where they can create efficiencies and economies of scale,' said Robert Goldbaum, [of Morgan Lewis & Bockius LLP] ... 'Ten thousand people are retiring every day. This is a growth sector with reliable trends.' "
Pensions & Investments

An Increase in Retirement Healthcare Costs Signals a Need for More Information

"Many income projection tools do not explicitly allow users to account for healthcare costs. Participants can factor in such expenses on their own by increasing their income replacement ratio, but many tools often display a default rate of 85%, which should be reconsidered by those anticipating high healthcare costs."
Corporate Insight

To What Extent Does Socioeconomic Status Lead People to Retire Too Soon?

"[T]he authors use data from the Health and Retirement Study (HRS) to identify the retirement gap -- the difference between how much longer each household would need to work to maintain their preretirement standard of living and their planned retirement age.... [R]etirement shortfalls for the most vulnerable may not be able to be bridged by working longer, and other solutions will be needed."
The Journal of Retirement; subscription required for full article

Social Security Programs and Retirement Around the World: Working Longer

"In the two decades since the project began, the dramatic decline in men's labor force participation has ended and been replaced by sharply rising participation rates. Older women's participation has been rising as well.... [The authors] document trends in participation and employment and also consider factors that may help to explain these changes in behavior."
National Bureau of Economic Research [NBER]; purchase required for full document

A Simple Change to 401(k) Statements Could Encourage Retirement Savings

"[T]he Lifetime Income Disclosure Act (H. R. 2055) ... would amend [ERISA] to require pension benefit statements to include a lifetime income disclosure at least once a year. The disclosure, which would cover 401(k)s and other employer-sponsored plans, would show the lifetime income stream equivalent of the total assets accrued by the participant. The [DOL] would issue assumptions that plan administrators could use, without concern of liability under ERISA, to convert total accrued benefits into lifetime income stream equivalents."
MarketWatch

[Opinion]

The Actuarial Approach to Retirement Spending

"[The authors] believe that the [actuarial budget benchmark (ABB)] is a powerful spending algorithm that is much more robust than any strategic withdrawal plan (SWP) or spending algorithm built into typical Monte Carlo models, and the Actuarial Approach is a time-tested process to keep spending on track over time. Despite these positive features, however, the actuarial profession appears to be reluctant to even discuss the Actuarial Approach, much less endorse it."
Ken Steiner, FSA Retired

Benefits in General

[Guidance Overview]

Independent Contractor or Employee? Precautions for California Employers

"[1] The burden to establish that a worker is an independent contractor, and not an employee, is on the employer. [2] Avoid engaging a person as an independent contractor to carry out a core business function or to perform services that are the same as those performed by employees. [3] If engaging a person as an independent contractor ... [m]ake certain that the worker actually controls the means and method of achieving the employer's objective."
Latham & Watkins

Sixth Circuit Holds That Contra Proferentum and Firestone Deference Are Incompatible on Issues of ERISA Plan Interpretation

"The crucial ambiguity in the Plan is whether the 'early retirement reducers' apply to the Plaintiff-Retirees. The district court applied contra proferentum to find in favor of the Retirees.... The [Sixth Circuit] explained that, as a practical matter, Firestone deference and contra proferentum cannot be applied to the same case without contradiction. First, Firestone deference must include the ability to choose between two reasonable interpretations of the Plan, but this is the precise situation in which traditional contra proferentum operates against the drafter. " [Clemons v. Norton Healthcare Inc. Ret. Plan, Nos. 16-5063 and 16-5124 (6th Cir. May 10, 2018)]
Kantor & Kantor

The Evolving Definition of Work-Life Balance

"Work-life balance means something a little different to everyone.... [T]he knowledge and approach of work-life balance has been constantly evolving, and it might be helpful for employers to identify the difference in opinions among the Baby Boomers, Generation X and Millennials."
Voya

The Lifetime Medical Spending of Retirees

"[At] age 70, households will on average incur $122,000 in medical spending, including Medicaid payments, over their remaining lives. At the top tail, 5 percent of households will incur more than $300,000, and 1 percent of households will incur over $600,000 in medical spending inclusive of Medicaid. The level and the dispersion of this spending diminish only slowly with age."
National Bureau of Economic Research [NBER]; purchase required for full document

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

SEC Issues FAQs on Compensation Plan Proposals Included in Proxy Statements

"The SEC has issued a series of frequently asked questions, ... referred to as Compliance and Disclosures Interpretations ... on proxy statements and proxy solicitations. In general the C&DIs replace previously issued telephone interpretations ... [S]ome of the more interesting C&DIs address Item 10 of Schedule 14A which sets forth disclosure requirements when compensation plans are submitted for shareholder approval."
Dodd-Frank.com

Selected Discussions
on the BenefitsLink Message Boards

Are J-1 Visa Interns and Trainees 'Employees' for Retirement Plan Purposes?

Are student trainees (18-month visas) and interns (12-month visas) working in the U.S. under a J-1 Visa (who are subject to Federal and State taxes but generally exempt from Medicare, Social Security and FUTA taxes; limited as to the work they can perform) considered "employees" for purposes of service credits and eligibility in a retirement plan?
BenefitsLink Message Boards

SIMPLE IRAs in a Controlled Group: Each Company Must Run Its Own?

Four companies are 100% owned by one individual and his spouse. So clearly a controlled group. Can a SIMPLE IRA be adopted by only one employer? If not, must each company adopt a separate SIMPLE IRA?
BenefitsLink Message Boards

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Press Releases

Former Owner of North Carolina's House of Lights Ordered To Pay $1,639,983 in Restitution to Profit-Sharing Plan
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

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David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
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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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