Ministry Support Data & Research Specialist
Christian Retirement Ministries
in CO

Coordinator of Marketing and Sales
Christian Retirement Ministries
in CO

Sales Assistant
Christian Retirement Ministries
in CO

Sr. Plan Consultant
Benefit Plans Administrative Services (BPAS)
in PA

Employee Benefits Compliance Attorney
Gallagher Benefit Services, Inc.
in CA, CO, WA

Retirement Plan Administrator
Matthews Benefit Group, Inc
in FL

US Retirement Benefits Specialist - Pensions
Cummins Inc
in TN

Plan Document and Compliance Specialist
TSC
in MN

Director of Fiduciary Services
Pavilion Advisory Group Inc.
in IL

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Leadership in an Employee-Ownership Setting
August 27, 2014 WEBCAST
(Beyster Institute)

Hot Issues in Executive Compensation 2014
September 12, 2014 in NY
(Practising Law Institute)

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Text of Supreme Court Opinion: ESOP Fiduciaries Not Entitled to Presumption of Prudence (PDF)
"ESOP fiduciaries, unlike ERISA fiduciaries generally, are not liable for losses that result from a failure to diversify. But aside from that distinction, because ESOP fiduciaries are ERISA fiduciaries and because 1104(a)(1)(B)'s duty of prudence applies to all ERISA fiduciaries, ESOP fiduciaries are subject to the duty of prudence just as other ERISA fiduciaries are.... [T]he potential for conflict is the same for an ESOP fiduciary whose company is on the brink of collapse as for a fiduciary who is invested in a healthier company.... [T]he duty of prudence, under ERISA as under the common law of trusts, does not require a fiduciary to break the law.... The courts should consider the extent to which an ERISA-based obligation either to refrain on the basis of inside information from making a planned trade or to disclose inside information to the public could conflict with the complex insider trading and corporate disclosure requirements imposed by the federal securities laws or with the objectives of those laws.... Lower courts faced with such claims should also consider whether the complaint has plausibly alleged that a prudent fiduciary in the defendant's position could not have concluded that stopping purchases ... or publicly disclosing negative information would do more harm than good to the fund by causing a drop in the stock price and a concomitant drop in the value of the stock already held by the fund. " [Fifth Third Bancorp v. Dudenhoeffer, No. 12-751 (S.Ct. June 25, 2014)] (Supreme Court of the United States)

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Supreme Court Rejects the Moench Presumption
"The Supreme Court rejected any presumption, effectively disagreeing with every circuit court to decide the issue ... The Supreme Court also addressed Fifth Third's concerns about being between a rock and a hard place in that they can be sued if the price goes down and they keep the stock in the plan or can be sued if the stock price them goes up and they haven't put it back in. The Supreme Court seemed to sympathize but still held that the presumption of prudence was not the solution ... [T]he Supreme Court made clear that the securities laws trump ERISA law.... [T]he Court has now required the lower courts to consider whether a claim to stop purchasing or a claim to inform the public would hurt the participants more than doing nothing." [ Fifth Third Bancorp v. Dudenhoeffer , No. 12-751 (S.Ct. June 25, 2014)] (The Lowenbaum Partnership and FRA PlanTools)

Plan Sponsors Made Errors in Majority of Final Form 5500 Returns
"Over 90% of the responses showed sponsors made one or more of the following errors on their Form 5500: [1] Filed a Form 5500 marked the final return/report but had assets at the end of the plan year.... [2] Filed more than one Form 5500 marked the final return/report.... [3] Distributed all plan assets after the end of the plan year but before filing the Form 5500.... [4] Didn't check the 'short plan year return/report (less than 12 months)' box.... [5] Filed a Form 5500 for a Simplified Employee Pension (SEP) plan or an IRA." (Wolters Kluwer Law & Business)

The Next Generation of Mortality Tables (PDF)
9 presentation slides. Excerpt: "Two Exposure Drafts issued in February: New base table called 'RP-2014', New improvement scale called 'MP-2014'; Public comments accepted through the end of May. Intention is to finalize by year-end; Remains to be seen if this will occur in light of comments. Auditors will ask about this at year-end ... May ask even if study has not been finalized. Pressure to move may to increase over time; Fully adopting the new tables may be the auditor's starting point. IRS seems unlikely to adopt until 2017." (Towers Watson, for American Benefits Council)

IRS Private Letter Rulings Add Fuel to Fire on Lump-Sum Offers, De-Risking Debate (PDF)
"The PLRs removed a possible cloud over the legality of making lump-sum offers to participants in pay status.... The new rulings will not necessarily hasten the demise of the defined benefit plan system ... [But] it's a variation on the same theme as dropping a defined benefit plan for a Section 401(k) plan: Sponsors of defined benefit plans are trying to shed costs by making employees fend for themselves." (Bloomberg BNA)

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IRS Phone Forum Rebroadcast, July 8, 2014: Retirement Plans After Windsor

This program will discuss the qualified plan impact of the Supreme Court's decision in U.S. v. Windsor, Rev. Rul. 2013-17, Notice 2014-19 and the relevant IRS FAQs.

DOMA Invalidation Complicates Surviving-Spouse Beneficiary Matters
"[A recently-filed Connecticut] case challenges the effective date of IRS guidance to plan sponsors to recognize same-gender couples' marriages as of June 26, 2013. A plaintiff win in this case would mean the effective date of DOMA invalidation for the Bayer plan would be retroactive to January 2009, and may cause any determinations made while DOMA was valid for similarly situated plans to be challenged." [ Passaro v. Bayer Corp. , No. 3:14-cv-00671 (D.Conn. filed May 12, 2014)] (Thompson SmartHR Manager)

Estate as Beneficiary: IRA vs. Qualified Plan
"When retirement benefits are payable to the estate, the family loses the option of a 'stretch' (life expectancy) payout. The life expectancy payout is available only to 'designated beneficiaries', meaning individuals or see-through trusts. The estate is not and cannot be a 'designated beneficiary' because it is not an individual, and (unlike with trusts) the IRS has no 'see-through rule' for estates." (Natalie Choate for Morningstar Advisor)

An Inherited IRA Is Not a 'Retirement' Account for Purposes of Bankruptcy Protection
"From a proactive planning perspective, the Clark decision will likely make it far more appealing for spousal beneficiaries to roll over inherited retirement accounts rather than leaving them as inherited IRAs, and non-spouse beneficiaries may increasingly prefer to inherit retirement accounts via a trust on their behalf, taking advantage of the 'see-through' trust regulations to ensure the inherited IRA can still stretch its distributions to the trust itself. On the other hand, the acknowledgment by the Supreme Court that a retirement account effectively ceases to be a preferential account (for asset protection purposes at least) after the death of the original owner also raises the question of whether Congress' recent proposals to curtail the use of stretch IRAs altogether and force most beneficiaries to use the 5-year rule may soon come to pass as well!" (Michael Kitces in Nerd's Eye View)

Dynamic Choice and Efficient Retirement Income Strategies
"[The authors] note an average overall increase in utility-adjusted wealth of 7.28% for our optimal, most-dynamic model compared with our simplest model, although the average improvement varies materially by scenario from less than 1% to more than 20%. [They] estimate that it would take an annual fee of 1.26% (i.e., negative alpha) to eliminate the 7.28% increase in utility-adjusted wealth that can be obtained from the most efficient dynamic strategy." (Morningstar Advisor)

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What Is the 401(k) Average Deferral Rate?
"If there is no match, [one consultant] says the average deferral rate is 'somewhere around 4% with lousy overall participation. That is usually caused by 1 or 2 people putting a lot in and a whole lot of folks not participating at all.'... [T]he matching threshold remains the primary factor in determining deferral rates.... Besides the 'matching threshold,' academics have discovered that people also set deferral rates around arbitrary numbers -- normally numbers divided by 5." (Fiduciary News)

Rethinking Retirement 'Gap' Analysis (PDF)
"Can't gap analysis serve both purposes, though -- providing solid answers and also motivating consumers to take action? To some extent, yes, but before setting that as our goal, we need to understand that the attempt to come up with the right answers is mostly a distraction -- because generally speaking, there is no 'right' answer.... When designing planning methods and tools, knowing that it's impossible to accomplish the ostensible objective of these calculations frees us to focus on their actual objective: to motivate savings." (RetirementWORKS, Inc.)

Incentives Needed to Address Falling U.S. Savings Rate
"The household savings rate, which has been declining since 1984, when Americans were putting aside 10.7 percent of their after-tax income, is on track to fall to 3 percent in the 2030s from the current 4 percent, according to an Oxford Economics study. The British-based data analysis firm warned that Americans would have to work longer, lower their standard of living or risk running out of money in retirement if they didn't begin to save more." (Reuters)

ERISA Fiduciary Guidance: Fairness for Defined Contribution Fees
"Paying plan administrative costs with asset-based fees presents issues of fairness and can be problematic if not followed carefully over time ... Suggestions include capping asset-based fees at a dollar amount per participant, or agreeing on a flat administrative cost per year.... individual account plan service agreements and fee structures should not be once-negotiated and left on auto-pilot." (Bond, Schoeneck & King)

SEC Announces First Investment Adviser 'Pay-To-Play' Enforcement Action
"The rules are applied formulaically: they do not require that an advisor intend to influence the government official to award the advisor business or any evidence that the contribution generated business from the recipient.... [T]he chief of the SEC's Municipal Securities and Public Pensions Unit warned: 'Public pension funds are increasingly investing in alternative investment vehicles such as hedge funds and private equity funds. When dealing with public pension fund clients, advisers to those kinds of investment vehicles should be mindful of the restrictions that can arise from political contributions.'" (Ballard Spahr LLP)

Gov. Brown Signs Legislation to Stabilize California Teachers' Retirement System, Raise Required Contributions
"Under the legislation ... the first year's contributions from teachers, schools and the state total approximately $276 million, growing in subsequent years to more than $5 billion annually. This is projected to eliminate the unfunded liability in the system by 2046." (Lake County News)

Frustrated Detroit Workers Question Hybrid Pension Plan
"Under the new 'hybrid' plan, members of the Police and Fire Retirement System [PFRS] will contribute 6% of their weekly pre-tax base pay toward their pension and civilian workers who belong to the General Retirement System will contribute 4%. PFRS members hired after June 30 will contribute 8%. The city will match employees' contributions and pay into the pension funds." (Detroit Free Press)

Australians Balk at Proposal to Increase Normal Retirement Age to 70
"Australian Treasurer Joe Hockey wants to raise the nation's retirement age to 70, the highest in the world, to prevent an aging population from draining state coffers.... The ratio of working-age Australians to those over 65 in the world's 12th-largest economy is expected to decline to 3:1 by 2050 from 5:1 in 2010. In Japan it's already below 3:1 and in Germany it's close to that level ... When the nation introduced the retirement pension in 1909 for men of ages 65 and over, male life expectancy was 55.2 years. Now it's 80.6 years, with women expected to live an extra four years." (Bloomberg)

Five Reasons Why Bloomberg is Right to Blast 401(k) Rollovers
"Rolling a 401(k) account into an IRA is generally a really bad idea, for the following reasons: Higher fees.... Not only higher fees, but more fees.... No advice.... Bad advice.... Loss of protection from creditors.... [T]here are very few compelling reasons to remove 401(k) balances from qualified retirement plan accounts." (Lawton Retirement Plan Consultants)

Text of D.C. Circuit Court Opinion: ERISA Statutory Claim Is Not Subject to Exhaustion of Administrative Remedies (PDF)
"Pension plan beneficiaries need not exhaust internal remedial procedures before proceeding to federal court when they assert violations of ERISA's substantive guarantees.... Because Appellants assert a right granted them by ERISA's regulations -- the right to receive a lump sum payment without unreasonable delay -- they assert a statutory claim not subject to the exhaustion requirement. In other words, Appellants assert a statutory claim because the district court on remand will have to evaluate the plan's administration under a reasonableness standard created and defined by federal law." [Stephens and Mahoney v. PBGC, No. 13-5129 (D.C. Cir. June 24, 2014)] (U.S. Court of Appeals for the District of Columbia Circuit)

Revenue Ruling Addresses Application of Section 457A to Stock Options and Stock Appreciation Rights (PDF)
"The revenue ruling confirms the exemption from section 457A for NSOs and stock-settled SARs. A stock right that is exempt from section 409A is also exempt from section 457A unless it constitutes 'a right to compensation based on the appreciation in value of a specified number of equity units of the service recipient.'" (Buck Consultants)

National Business Group on Health Honors 63 U.S. Employers With ?Best Employers for Healthy Lifestyles? Awards National Business Group on Health

NAGDCA Launches New Website NAGDCA [National Association of Government Defined Contribution Administrators, Inc.]

Health Partners America Publishes New Whitepaper ?10 ACA FAQs for Small Employers? Health Partners America

Pentegra Retirement Services Expands Outsourced Chief Investment Officer Services Through The Hiring Of Sarah Coxe Lange, National Sales Director, Institutional Investments Pentegra Retirement Services

OneAmerica to Acquire City National Bank?s Retirement Services Division OneAmerica Financial Partners

Transamerica Retirement Solutions Receives Top Performer Rankings, Delivers Strong Results in Plan Sponsor Satisfaction Transamerica Retirement Solutions

ERIC President Scott Macey Comments on the U.S. Supreme Court?s Decision in Fifth Third Bancorp v. Dudenhoeffer ERIC [ERISA Industry Committee]

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