NTSA

Specialized Internal Sales Consultant
MassMutual Financial Group
in CT

CFO/Director of Finance
Sheet Metal Workers' National Pension Fund
in VA

Pension Actuary, Retirement Services Pension Buyout
MassMutual Financial Group
in IL

Hands-on Experienced Administrator - Non-Supervisory
ERISA Pension Systems
in FL

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Employee Benefit Developments Employers Need To Know
June 18, 2015 WEBCAST
(Bond, Schoeneck & King, PLLC)

Overview of the Draft 'AIR Submission Composition and Reference Guide'
June 23, 2015 WEBCAST
(IRS [Internal Revenue Service])

S Corporation ESOPs - Administrative Issues
June 23, 2015 WEBCAST
(National Center for Employee Ownership [NCEO])

IRA Required Minimum Distributions
September 22, 2015 WEBCAST
(Ascensus)

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Text of PBGC Interim Final Regs: Partitions of Eligible Multiemployer Plans
63 pages."This document contains an interim final rule prescribing the application process and notice requirements for partitions of eligible multiemployer plans under title IV of [ERISA], as amended by the Multiemployer Pension Reform Act of 2014 (MPRA).... PBGC is soliciting public comments ... As under prior law, PBGC's decision to order a partition is discretionary. Unlike prior law, however, the statute requires PBGC to make a determination not later than 270 days after the date such application was filed ... In addition, section 4233(a)(2) states that not later than 30 days after submitting an application for partition, the plan sponsor shall notify the participants and beneficiaries of such application, in the form and manner prescribed by regulations issued by PBGC... Section 4233(b) of ERISA contains five statutory conditions that must be satisfied before PBGC may order a partition... Under the new withdrawal liability rule, if an employer withdraws fro m the original plan within 10 years following the date of the partition, withdrawal liability is computed under section 4201 with respect to the original plan and the successor plan[.]" (Pension Benefit Guaranty Corporation [PBGC])

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Text of IRS Temporary Regs: Suspension of Benefits under the Multiemployer Pension Reform Act of 2014
55 pages. "This document contains temporary regulations under section 432(e)(9) that, together with proposed regulations ... and Rev. Proc. 2015-34 , implement section 432(e)(9) as required by the statute.... The temporary regulations in this document, which are applicable immediately, provide sufficient guidance to enable a plan sponsor that wishes to apply for approval of a suspension of benefits to prepare and submit such an application, and to enable the Department of the Treasury to begin the processing of such an application. The temporary regulations provide general guidance regarding section 432(e)(9), including guidance regarding the meaning of the term 'suspension of benefits,' the general conditions for a suspension of benefits, and the implementation of a suspension after a participant vote.... The provisions of the temporary regulations and proposed regulations are expected to be integrated and issued as a single set of final regulations with any changes that are made following consideration of the comments received." (Internal Revenue Service [IRS])

Text of IRS Notice of Proposed Rulemaking and Public Hearing: Suspension of Benefits under the Multiemployer Pension Reform Act of 2014
74 pages. "This document contains proposed regulations relating to multiemployer pension plans that are projected to have insufficient funds, at some point in the future, to pay the full benefits to which individuals will be entitled under the plans (referred to as plans in 'critical and declining status).... MPRA requires the Secretary of the Treasury, in consultation with the [PBGC] and the Secretary of Labor, to approve or deny applications by these plans to reduce benefits. As required by MPRA, these proposed regulations, together with temporary regulations being published at the same time, provide guidance implementing these statutory provisions. These proposed regulations would affect active, retired, and deferred vested participants and beneficiaries of multiemployer plans that are in critical and declining status as well as employers contributing to, and sponsors and administrators of, those plans." (Internal Revenue Service [IRS])

Text of IRS Rev. Proc. 2015-34: Application Procedures for Approval of Benefit Suspensions for Certain Multiemployer Defined Benefit Pension Plans Under Section 432(e)(9) (PDF)
31 pages. "This revenue procedure prescribes the application process for approval of a proposed benefit suspension in accordance with Section 432(e)(9)(G) and provides a model notice that a plan sponsor proposing a benefit suspension may use to satisfy the content and readability requirements of Section 432(e)(9)(F)(ii) and (iii)(II).... This revenue procedure does not affect the standards that will be applied in reviewing an application for a suspension of benefits under Section 432(e)(9)." (Internal Revenue Service [IRS])

IRS Explanation, Worksheet (Alert Guidelines), and Deficiency Checksheet: Affiliated Service Groups (Rev 4-2015) (PDF)
6 pages; this single PDF document includes Publication 7005, Form 8388, and Form 8400. Excerpt: "The general rule of section 414(m) is that employees of employers that are members of an affiliated service group are considered to be employed by a single employer for purposes of certain provisions of section 401(a), and sections 408(k), 408(p), 410, 411, 415 and 416." (Internal Revenue Service [IRS])

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Phased Retirement Programs: Exploring the Benefits and Issues

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Hardship Withdrawals: Rules and Required Documentation
"Plan Administrators [should] retain the following records with respect to hardship withdrawal requests: [1] Documentation of the hardship application or request including your review and/or approval of the request. [2] Financial information or documentation that substantiates the employee's immediate and heavy financial need. This may include insurance bills, escrow paperwork, funeral expenses, bank statements, etc. [3] Documentation to support that the hardship was made properly and in accordance with the plan provisions and the IRS regulations. [4] Evidence that the payment was made to the participant and reported on Form 1099R." (Benefit Resources, Inc.)

Analysis and Recommendations Regarding 403(b) Plans
403(b) plan recommendations comprise 70 pages of 258 page Advisory Committee report. "[This report] covers four specific areas that the [Employee Plans (EP)] Subcommittee believes require additional guidance and/or support pieces from the Service. First, universal availability is an operational issue that has long been identified by both by [EP] and the 403(b) community as a particularly challenging requirement. Second, 'orphan' 403(b) contracts that were either 'frozen' before 2009 or cover former employees with contracts issued before 2009 remains a troubling issue. Third, the requirements and challenges that face 403(b) plan sponsors that need to terminate their plans still needs to be addressed. Finally, improvements to EPCRS are necessary to better address the document and operational needs of the 403(b) community." [Authors: Alison J. Cohen, Esq.; Donna Mueller, Esq.; David Mustone, Esq.; Chris Shankle, CPA, CGMA; Stuart A. Sirkin, Esq.; Matthew I. Whitehorn, Esq.] (Advisory Committee on Tax Exempt and Government Entities, Internal Revenue Service [IRS])

Lifetime Income Insurance Products and Emerging Issues (PDF)
33 presentation slides. Topics include: [1] Insured lifetime income product advantages; [2] Resistance to using insured lifetime income products; [3] Products: Single Premium Insured Annuities (SPIA), Deferred Income Annuities (DIA), Guaranteed Lifetime Withdrawal Benefit (GLWB) Rider, Guaranteed Minimum Income Benefit (GMIB) Rider, and Contingent Deferred Annuities (CDA); [4] Implementation; [5] Recent regulations; and [6] Initiatives to consider. (American Academy of Actuaries)

The Emergence of the Single-Fund Participant
"In 2014, the average Vanguard plan offered 27.3 investment options ... Yet the average participants used only 2.9 options (two options for the median participant). In reality, nearly half of participants (48%) used just one fund. That, of course, is a direct result of the emergence of target-date funds as the predominant investment vehicle in DC plans." (Money Management Intelligence)

Going to War over Retirement Security
"On every front where ... advocates are working to build a system for a workforce that ranges from housekeepers and waitresses to professionals and entrepreneurs, the financial services industry has been hard at work to suppress it.... But despite aggressive attempts to beat back state bill sponsors, the industry has had to come to grips with the growing possibility of a patchwork of new retirement plans that could require it to comply with as many as 50 different sets of rules and regulations. As challenging as that might be, the biggest fears among financial services providers are that the new state plans will disintermediate their business model." (Institutional Investor)

DOL Fiduciary Rule in Crosshairs of New Spending Bill
"Under the House Appropriations Committee measure, the DOL would not be able to spend any funds to finalize or implement the rule. The provision is part of a $153 billion bill that would fund the DOL, the Department of Health and Human Services, and several other agencies for fiscal year 2016.... The so-called rider would halt the DOL initiative to reduce conflicts of interest for brokers working with clients in 401(k) or individual retirement accounts." (Pensions & Investments)

SEC's Disunity Delays Its Fiduciary Standard Rule
"Political and ideological divisions on the [SEC] are forcing it to cede leadership on investor protection issues to the [DOL]. That is clear from comments ... by Kara Stein, a Democratic member of the SEC since 2013, indicating that it will be difficult for the agency to craft its own uniform fiduciary standard.... Her comments are consistent with those of Daniel Gallagher, a Republican member of the SEC. He has stated at a number of venues in recent months that he doesn't believe the SEC will agree to a new uniform standard." (InsuranceNewsNet.com)

10 Best Practices for Global Defined Contribution Plans (PDF)
24 pages. "Articulate objectives of total rewards globally. Assess your company's existing reward structures around the world. Seek ever-closer interaction between benefits functions globally. Establish a clear, flexible governance framework. Thoroughly understand and adhere to regulation, compliance and legislation. Decide on the degree to which the company employs a global investment philosophy. Seek efficiencies. Promote higher savings rates globally. Establish a specific plan for the transition from accumulation to de-accumulation. Create a strong employee communications program." (State Street Global Advisors)

How an Exclusive Hedge Fund Turbocharged Its Own Employee Retirement Plan
"In a series of unusual moves, Renaissance Technologies abolished its 401(k) plan and won the government's permission to put pieces of Medallion inside Roth IRAs. That means no taxes -- ever -- on the future earnings of a fund that averaged a 71.8 percent annual return, before fees, from 1994 through mid-2014. The switch -- the result of four years of legal work and two waivers from the [DOL] -- could yield an extraordinary payoff for workers at Renaissance, a pioneer in quantitative trading. The loser will be the U.S. Treasury, which stands to miss out on many millions of tax dollars." (Bloomberg)

Public Pension Assets Quarterly Update, Q1 2015
"As of the first quarter of 2015, public pension assets were $3.7 trillion, from $3.71 trillion as of Q4 2014.... The pre-recession high was a reported $3.2 trillion." (National Association of State Retirement Administrators [NASRA])

Statement from Rep. Roe at HELP Subcommittee Hearing on Restricting Access to Financial Advice: Evaluating the Costs and Consequences for Working Families and Retirees
"[We] cannot -- in any way -- make it harder for workers, retirees, and small business owners to receive the financial advice they may need. Yet that is precisely what this regulatory proposal would do. Offering some of the most basic assistance would be prohibited, such as advice on rolling over funds from a 401(k) to an IRA. Financial advisors would no longer be able to assist individuals in how to manage their funds upon retirement. And small business owners would be denied help in selecting the right investment options for their workforce, which will lead to fewer employees enrolled in a retirement plan." (Committee on Education and the Workforce, U.S. House of Representatives)

Testimony of ICI to House HELP Subcommittee Hearing on Restricting Access to Financial Advice: Evaluating the Costs and Consequences for Working Families and Retirees
"The DOL justifies its proposed rule by claiming that this market suffers from a 'substantial' market failure, resulting in serious harm for retirement savers who invest through broker-dealers. But the Department's assertions do not stand up when tested against actual experience and data. Even worse, the DOL's proposal could actually have a significant net societal harm." (Investment Company Institute [ICI])

Perez's Perilous Costs: Eye-Catching Numbers DOL Is Ignoring with Fiduciary Proposal
"Small business owners, through SEP and SIMPLE-type IRA plans, provide roughly $472 billion in retirement savings to their employees. But DOL's proposal does not treat small business retirement plans the same relative to large employer plans, putting them at a disadvantage and making it harder for small business owners to do the right thing for their employees.... Because DOL has included advisors to small businesses in its fiduciary definition, many small business employees trying to save for retirement will no longer enjoy access to low-cost investment assistance.... DOL itself has estimated that access to professional investment advice saves more than $100 billion per year in preventable financial mistakes. That is more than five times the amount that DOL says it will save people by finalizing its new regulation." (U.S. Chamber of Commerce)

The DOL's Fiduciary Rule: Why Can't Regulators Do Simple?
"The problem with the BICE is that it fails to disincentivize financial advisors from including high-cost, actively managed funds in a retirement plan -- in other words, the types of funds that get challenged in excessive 401k fee lawsuits. That make the BICE a dangerous proposition for plan sponsors who have personal liability in these lawsuits.... A clean rule would make it easier for 401k sponsors to select and monitor financial advisors obligated to put the interests of their participants first.... [P]lan sponsors have an incredibly important job as fiduciaries -- protecting the best interests of plan participants. Regulations should make that job easier and not harder." (Employee Fiduciary)

Nonqualified Deferred Compensation Audit Techniques Guide (June 2015)
"A NQDC plan examination should focus on when the deferred amounts are includible in the employee's gross income and when those amounts are deductible by the employer.... The Examiner should also address if deferred amounts were properly taken into account for employment tax purposes. The timing rules for income tax and for FICA/FUTA taxes are different.... It is important to note that Section 885 of the American Jobs Creation Act of 2004 changed the rules governing NQDC arrangements significantly." (Internal Revenue Service [IRS])

IRS Updates Audit Guide for Nonqualified Plans (PDF)
"Considering the degree to which the IRS and practitioners have focused on Section 409A since 2005, it is surprising that the June 2015 update to the Audit Techniques Guide provides little insight into how the IRS plans to review for Section 409A compliance during the audit process. While the Guide clearly instructs IRS examiners to look for Section 409A violations, it does not note any areas of particular IRS focus or recommend any specific audit techniques in this area. The lack of detail is notable in light of the IRS's recent audit initiative focused on Section 409A." (Groom Law Group)

IRS Provides Online Information on Circular 230
"Tax professionals who represent taxpayers before the IRS should be aware that there were significant revisions made to Circular 230 on June 12, 2014.... The most important Circular 230 provisions for tax professionals to review are either new or are areas where professionals are most likely to make errors including: Diligence as to Accuracy (10.22); Due Diligence Standards for Signing and Advising -- Returns/Docs (10.34); Negotiation of Taxpayer Checks (10.31); Giving False or Misleading Info (10.51(a)(4)); Willfully Assisting, Counseling or Encouraging a Client to Evade Taxes or Payment Thereof (10.51(a)(7)); Conflicting Interests (10.29); Due Diligence for Written Advice (10.37); Competence (10.35); Expedited Suspension (10.82)." (Internal Revenue Service [IRS])

A Look Ahead to the Supreme Court's 2015-16 Term
"The Supreme Court has demonstrated some enthusiasm for ERISA in recent years. The [ Montanile v. Board of Trustees ] case represents a significant beginning to the Court's ERISA work for the next term. Given the cases and issues before it, however, the odds are that the Court will consider more ERISA cases in the next twelve months." (Jackson Lewis P.C.)

It's a Top Hat Plan? Federal District Court Says 'Prove It'
"When employers offer deferred compensation plans to a small group of top of the scale employees to try to tie them more firmly to the company, they know they are offering deferred compensation to a select group of top tier employees, and thus feel quite certain that the plan involved is a top hat plan. To them, it looks like a top hat plan, walks like a top hat plan and quacks like a top hat plan, so it is a top hat plan. That, though, is not enough, as [ Tolbert v. RBC Capital Markets Corp. ] shows, for a court applying rigorous standards of proof: instead, the elements are going to have to be proven by testimony, data comparing the recipients to the employee pool as a whole, and the like." (Stephen Rosenberg, The Wagner Law Group)

SEC Announces Charges Against Retirement Plan Custodian in Connection With Ponzi Scheme Securities and Exchange Commission [SEC]

National Business Group on Health Honors 64 U.S. Employers With ?Best Employers for Healthy Lifestyles?? Awards National Business Group on Health

Sen. Bernie Sanders and Rep. Marcy Kaptur to introduce 'Keep Our Pension Promises Act' on June 18 Pension Rights Center

CalPERS Committee Moves to Recommend 2016 Health Plan Premium Rates CalPERS [California Public Employees' Retirement System]

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