Retirement Plans Newsletter

April 16, 2019 logo logo
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Employee Benefits Associate
Shipman & Goodwin LLP
in Hartford CT

Outside Sales Consultant
Bates & Company, Inc.
in FL

Defined Contribution Administrator
Merit Benefits Group, Inc.
in Oak Brook IL

401(k) Plan Administrator
Southern Pension Services
in Tampa FL

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Webcasts, Conferences

Confessions from a HIPAA Auditor
April 25, 2019 WEBCAST

Student Loans in 401(k) Plans: Latest Developments on Student Loans and 401(k) Loans
May 9, 2019 in IL
Worldwide Employee Benefits Network [WEB] - Chicagoland Chapter

QACA Automatic Enrollment: Benefits and Pitfalls (from a Recordkeeper Perspective)
May 14, 2019 WEBCAST
ASPPA [American Society of Pension Professionals & Actuaries]

Student Loans in 401(k) Plans: Latest Developments on Student Loans and 401(k) Loans
May 14, 2019 in IL
Worldwide Employee Benefits Network [WEB] - Chicagoland Chapter

Lessons from Recent Litigation for TPAs and Plan Sponsors
May 23, 2019 WEBCAST

Going Rogue with Cross-Testing
July 25, 2019 WEBCAST
ASPPA [American Society of Pension Professionals & Actuaries]

►See 171 Upcoming Webcasts and Conferences

►See 1517 Recorded Webcasts


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[Guidance Overview]

DOL to Review ESG Investing, Proxy Voting Rules

"Section 5 of the [Executive Order on Promoting Energy Infrastructure and Economic Growth] states that there is already an existing regulatory framework that provides for disclosures of 'material' information to investors and that corporations have fiduciary duties to shareholders. The implication is that investor activism is potentially unnecessary and could undermine national energy policy goals. Given that [ERISA] is one of the few federal statutes that regulates investor behavior, the Executive Order gives the DOL another opportunity to focus on ESG investing and proxy voting activities by benefit plans."
Groom Law Group

[Advert.] Announces: 403(b) Plan eSource

Sponsored by Burrmont Compliance Labs LLC

New! 403(b) Plan eSource authored by S. Derrin Watson, JD, APM. Essential reference for 403(b) Plans. Clear, easy to understand language and over 400 examples written in Derrin's unique, light-hearted style. Call or email

Participant Loan Leakage: Protecting Participant Accounts and Reducing Fiduciary Risks (PDF)

"[P]articipant loans are plan investments and must be managed with the same prudence and oversight required for any plan investment. The risk is heightened by ... [1] the increased focus on 401(k) plans as a source of litigation; [2] an alarming rate of loan defaults, as reflected in academic and industry studies; and [3] a misguided belief that disclosure provides adequate protection. This paper explores these issues."
Drinker Biddle

How to Counter the Top Excuses for Not Saving Right Now for Retirement

"That sometimes decades-long gap between where we are today and where we'll be when we're handed the gold watch diminishes the importance of acting right now. People find themselves standing at the plate without bothering to take a swing at the pitch. What's the best way to counter this? Here are the top 5 excuses people are using right now to rationalize why they don't need to save for their own retirement. Better still, here are the best way to count those excuses."
Fiduciary News

An Increasing Number of Savers Are Rejecting Retirement Accounts in Favor of These Investments

"Ownership of taxable brokerage accounts jumped 10 percentage points over the last five years, and checking, saving and CD accounts increased 9 percentage points ... Meanwhile, ownership rates remained the same for employer-sponsored plans like a 401(k), but consumers were contributing less -- a total decline of 5 percentage points."

Best Practices for Participant Phone App Home Screens

"A strong selection of plan data is the cornerstone of an effective retirement plan home screen; firms should aim to list only the most important data points rather than all data available via the desktop site.... Pie charts and graphs can serve multiple functions and better communicate data than long lists of numbers.... Salary deferral transactions on home screens and dashboards, various help options and income projection tools can help supplement other plan data and benefit participants."
Corporate Insight


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Status Update of Pension Plans with Approved MPRA Benefit Reductions

"So far there have been twelve plans approved for benefit cuts under MPRA ... And one plan that got a Proposal Approval letter but not a Final Authorization letter ... We now have data on one plan that has gone through a full year of benefit cuts as reported on their 5500 filings. Payouts dropped about 20% but there is still negative cash flow that projects to bankruptcy, if not in 10 years, then maybe 15."

New Jersey Proposes Fiduciary Regulation

"New Jersey officials announced [on April 15] a proposed regulation that would require financial professionals registered in the state to act as fiduciaries when providing investment advice, recommending investment strategies, opening investors' accounts and conducting securities transactions."
Pensions & Investments

How to Protect Your 401(k) Account from Cyber Crime

"Make sure your 401(k) service provider can connect with you.... All current 401(k) record-keeping platforms attempt to notify the account holder when changes are made to their contact information.... Your 401(k) account is likely one of your largest liquid assets. It deserves its own password.... Beware of phishing scams.... Dual factor authentication is now standard on most 401(k) platforms, with additional security available from certain service providers such as account lock features and biometric/voice recognition software.... If you have not taken any of the precautions described above, there is a very real possibility the service provider will not make you whole."
Francis Investment Counsel LLC


Index Investing: Why Most Index Funds and ETFs Are Not Good Investments

"[T]he best way to build a great investment strategy is to use index options for those few asset classes that are widely covered and researched and actively managed choices for all other asset classes where inefficiencies still exist."
Lawton Retirement Plan Consultants

Benefits in General

ASB Approves Exposure Draft of a Revision of ASOP No. 2

"The ASB recently approved an exposure draft of a revision of ASOP No. 2, now titled 'Nonguaranteed Elements for Life Insurance and Annuity Products'.... Notable changes from the existing ASOP include clarification to the scope, expansion and clarification of definitions and guidance, and the introduction of the concept of an insurer's NGE framework, which includes the determination policy, how policy classes are established, and the practices used to determine NGE scales."
Actuarial Standards Board

Selected Discussions
on the BenefitsLink Message Boards

Required Restatement for Terminated Plan?

What say all of you about terminating plans and the current restatement cycle? Assume the documents have amendments to bring them otherwise up to date, just not restatements.
BenefitsLink Message Boards

ADP Test Didn't Fail But One HCE Mistakenly Given a Refund

We have a client where we review their ADP/ACP tests and prepare the Form 5500. The client determined that the ADP test failed and they refunded the approximately $1,500 back to one of the HCEs. The problem is that the client did not perform the tests properly -- the plan did not fail the ADP test after all. Thus there should have been no refund. I am clueless as to how to fix this.
BenefitsLink Message Boards

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Winter Park, Florida 32789
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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 2019, 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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