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Retirement Plan Administrator
PenSys, Inc.
in CA, NC

Compliance Team Lead - 401K / Retirement
ADP
in NJ

Retirement Specialist
Nationwide
in MD

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Overview of Retirement Plan Qualification Rules
July 28, 2015 WEBCAST
(Wagner Law Group P.C.)

Annual Health Care Reporting & Strategic Employee Communications (Forms 1094-C and 1095-C)
August 11, 2015 WEBCAST
(HR.com)

Fundamentals of 401(k) and Other Qualified Plans - Cleveland
August 11, 2015 in OH
(SunGard Relius)

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Text of IRS Rev. Proc. 2015-36: Procedures for Opinion and Advisory Letters for Pre-Approved Plans
"This revenue procedure modifies and supersedes Rev. Proc. 2011-49 ... This revenue procedure also extends to October 30, 2015, the deadline for submitting on-cycle applications for opinion and advisory letters for pre-approved defined benefit plans for the plans' second six-year remedial amendment cycle.... [Changes to Rev. Proc. 2011-49 include the following for both M&P and Volume Submitter Plans:] ... [1] reduce the required number of adopting employers necessary to qualify as a sponsor from 30 to 15 ... [2] set forth additional provisions required by M&P ESOPs and cash balance plans... [3] allow sponsors to request opinion letters for ESOPs and [set forth] the specific areas for which opinion letters will not be issued for ESOPs.... [4] allow sponsors to submit cash balance plans to the IRS and request opinion letters for plans containing these features and [set forth] specific areas for which opinion letters will not be issued for cash balance plans." (Internal Revenue Service [IRS])

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Will the Department of Labor Expand Fiduciary Status?

Download this special report to understand the impacts of the DOL Amicus Brief Program, whether it will expand the definition of fiduciary and the implications to providers.

Text of PBGC Monthly Interest Update for August 2015
"The August 2015 interest assumptions under the benefit payments regulation will be 1.50 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 July 2015, these interest assumptions represent an increase of 0.25 percent in the immediate annuity rate and are otherwise unchanged." (Pension Benefit Guaranty Corporation [PBGC])

Text of IRS Notice 2015-50: Weighted Average Interest Rates, Yield Curves, and Segment Rates Applicable for July 2015 (PDF)
"This notice provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under Section 417(e)(3), and the 24-month average segment rates under Section 430(h)(2) ... In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under Section 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under Section 431(c)(6)(E)(ii)(I). The rates in this notice reflect the application of Section 430(h)(2)(C)(iv), which was added by [MAP-21] and amended by section 2003 of [HATFA]." (Internal Revenue Service [IRS])

DOL Provides Key ERISA Guidance on Purchase of Lifetime Annuities
"[ FAB 2015-02 ] is an initial, but substantial, step in addressing one of the most pressing of the ERISA issues related to providing lifetime income from defined contribution plans: concerns by employers and their advisors regarding the potential of a substantial 'tail' of liability related to buying an annuity.... Addressing this 'fiduciary anxiety,' the DOL helpfully described the manner in which ERISA's six-year statue of limitations serves to restrict the 'window of liability' related to those purchases.... Next up will be guidance on a safe harbor, for the steps the fiduciary should take in choosing an annuity carrier." (Business of Benefits)

IRS to Plan Sponsors: You Must Retain Documentation for Loans and Hardship Withdrawals
"Two things about the guidance are notable ... The first is the IRS's emphasis on impermissible self-certification (for both loans and hardship withdrawals). Taken together with the guidance's pointed reference to audits, the clear message is that the IRS is on the lookout for precisely this issue as it expands its audit program. The second notable point is the IRS's statement that each loan or hardship withdrawal for which a plan sponsor does not have the documents listed above in its files constitutes a qualification failure that should be corrected under EPCRS." (Markley Actuarial)

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Your input needed! GAO asking DC plan sponsors about eligibility and vesting requirements

This GAO survey examines why plan sponsors use certain eligibility and vesting requirements, how they may have changed the requirements, and how they communicate them to employees and participants. GAO estimates the survey will take about 15-20 minutes to complete; responses will be accepted until July 24th.

Avoiding Fiduciary Liability When Selecting and Monitoring Service-Providers
"Plan Sponsors often put a number of measures in place to shield themselves from the fiduciary liability that goes along with administering a retirement plan. One effective way ... [is] delegation of the plan administrator function to a retirement plan committee.... A problem can arise, however, when ... selecting and monitoring vendors.... The problem with an employer getting involved in the RFP process is that the employer then becomes a fiduciary with respect to vendor selection, which defeats the purpose of delegating to a committee in the first place." (Pension Consultants, Inc.)

Make Retirement Saving Even More Valuable by Adding Automatic Emergency Savings
"One way to structure such a plan would be to automatically enroll an employee into a saving program where part of the contributions would go to a regular 401k-style retirement saving account and the rest into a passbook savings account at a federally insured bank or credit union. The emergency savings could be a percentage of the total contribution or based on income levels, such as a percentage of contributions on the first $20,000 of annual income. Auto escalation would apply only to the retirement contributions." (The Brookings Institution)

Time for Millennials Opting for 'Safe' Investments to Stop Hurting Themselves
"There's a behavioral phenomenon known as 'recency.' It is defined as the tendency for people to overweight more recent events, even if, in the long-run, it's clear those recent events are anomalies. This can have a detrimental impact on long-term investors.... This short-term volatility can cause people to see 'safe' short-term investments as a 'safe' long-term investment alternative.... [T]he numbers just don't look good for so-called 'safe' investments. They're just not a good way to invest for the long-term, especially given the advantage of time." (Fiduciary News)

Take Advantage of 401(k) Catch-Up Contributions
"A worker earning $100,000 would have to save about a quarter of his pay to take full advantage of catch-up contributions. And someone earning $50,000 would need to tuck nearly half of his income into a 401(k) to get the maximum possible tax break.... A 2014 [GAO] report found that only 3 percent of 401(k) participants ages 50 and older contributed the maximum possible amount to their 401(k) plan." (U.S. News & World Report)

Investor Activity in Traditional IRAs, 2007-2013 (PDF)
76 pages. "Despite dramatic declines in stock values between October 2007 and March 2009, a recession (December 2007 to June 2009), and rising unemployment rates, traditional IRA investors with accounts from year-end 2007 through year-end 2013 showed little reaction to the financial events.... Traditional IRA investors' allocation to equity holdings fell, on average, although some of the change merely reflects market movement rather than investors' rebalancing.... Although account balances fell considerably following the stock market decline in 2008, the average traditional IRA balance for traditional IRA investors aged 25 to 69 with account balances in all years between 2007 and 2013 was significantly higher at year-end 2013 than at year-end 2007." (Investment Company Institute [ICI])

Spending and Saving During Retirement
12 pages. "[The authors] aim to answer the following questions: [1] What proportion of retirement income is spent, as opposed to saved, in a year? [2] How do spending and saving patterns vary depending on the income and financial account holdings in the household? [3] What is the relative impact of guaranteed income sources versus financial account sources on spending and saving behavior?" (Vanguard)

Does Retirement Improve Health and Life Satisfaction?
"[The authors] utilize panel data from the Health and Retirement Study to investigate the impact of retirement on physical and mental health, life satisfaction, and health care utilization.... [The authors] find strong evidence that retirement improves both health and life satisfaction. While the impact on life satisfaction occurs within the first 4 years of retirement, many of the improvements in health show up 4 or more years later, consistent with the view that health is a stock that evolves slowly. [The study finds] little evidence that retirement influences health care utilization." (National Bureau of Economic Research [NBER])

New Expectations, New Rewards: Work in Retirement for Middle-Income Boomers (PDF)
37 pages. "Six in 10 (61%) employed middle-income Boomer retirees say they are working because they want to work, not because they have to work.... Six in 10 (59%) employed retirees report that the primary reason they work is for a nonfinancial reason ... [E]ight in 10 (80%) employed retirees found it very easy or somewhat easy to find a job in retirement.... More than three-quarters (78%) of employed Boomer retirees report they are as satisfied or more satisfied with their job now than with their job before retiring." (Bankers Life Center for a Secure Retirement)

Non-Governmental Employer Considerations for Retirement Plan Administration After Obergefell
"In the absence of other guidance, a reasonable plan administrator might turn to the IRS's approach after Windsor (even if only by analogy) and set the 'compliance date' for Obergefell as the date of the Court's decision (June 26, 2015). That said, since the Obergefell decision will largely affect the tax laws of those states/jurisdictions that previously did not recognize same-sex marriage, each state or jurisdiction may issue its own guidance on the timing of the implementation[.]" (Ice Miller LLP)

Chicago Public Schools Spend $500 Million They Don't Have
"The preliminary budgets distributed to school principals for the coming school year assume state lawmakers will free CPS from having to make $500 million of a $700 million pension payment due June 30, 2016, either by giving the district more money or by allowing CPS to delay the payment until 2017 or later. CPS had tried to persuade the Chicago Teachers' Pension Fund to agree to an extension until 2017. The pension fund rejected the idea Friday." (Chicago Tribune; subscription may be required)

The DOL's Best-Interest Proposal Isn't About Best Interest
"These provisions both explicitly and implicitly limit the types of investments individuals may choose with their own money. Further, the DOL seeks to establish new liabilities, on top of existing private rights of action. When combined with the operations and systems requirements, this new jeopardy of liability very likely would incentivize providers to transition many if not most clients from brokerage to fee-based managed accounts in order to avoid the DOL's burdensome new requirements on the brokerage model, which would result in investors effectively having to buy more services than they want or need, and thus at a higher cost." (The Hill)

Curtailing Lump Sum Pension Payouts?
"While lump sum payouts sound attractive, the truth is they place enormous pressure on individuals to invest the money wisely and even if they do, they still run the risk they or their loved ones will outlive these savings. In other words, lump-sum pension payouts are no substitute for defined-benefit pensions which provide steady and secure payouts for life. And while most companies have not offered lump sum pension payouts to their employees, the trend to de-risk pensions is clear, and it's important that regulators nip this trend in the bud as soon as possible." (Pension Pulse)

IRS Penalties for Information Returns Have Doubled
"Examples of information returns affected by the new law are Forms W-2, 1098, 1099 series and 1042. Under the [ACA], providers of minimum essential coverage are required to file Forms 1095-B and 1094-B and failures are subject to the penalty.... The burden of the penalty increase is duplicated when one considers that the penalty applies to both the failure to file the information return with the IRS and the failure to furnish the payee's copy of the return to the payee.... Each inaccurate Form 1099 will then cost a payor $500. The penalty is doubled if the failure to file/furnish is intentional." (McGladrey)

SEC Releases Proposed Rule on Mandatory Clawbacks
"[T]he potential retroactive application the Proposed Rule to already granted compensatory awards could result in the recoupment of compensation in violation of the terms of such award under an existing award agreement or employment contract. The SEC dismisses this potential issue by asserting that a company may unilaterally amend existing awards without an award holder's consent 'to accommodate recovery.' Despite this assertion, the potential retroactive application of the Proposed Rule to existing awards could result in an Executive Officer (particularly a former Executive Officer) challenging a company's recovery attempt in court." (Meridian Compensation Partners, LLC)

Clawback Rule Could Backfire
"In theory, the new rule should make executives more accountable.... In practice, however, the new rule, on which the SEC is seeking public comment, is causing some head-scratching because its language could lead to a different, perverse consequence. Instead of acting as a check on compensation and accountability, the new law increasingly looks as if it could drive up base salaries -- and make executives less aligned with shareholders -- or increase incentive pay to even higher levels to account for the risk of any potential clawback." (The New York Times; subscription may be required)

Lockton Expands Retirement Services Practice Lockton

Christopher R. Rainer ? LPL Financial is Certified for Fiduciary Excellence Centre for Fiduciary Excellence [CEFEX]

Northwestern Mutual Launches New 'Longevity Annuity' Allowing Individuals to Delay Required Minimum Distributions and Set Aside Money for Later in Retirement Northwestern Mutual

ConnectYourCare?s Lauren Kronthal Selected as 2015 Brava! Executive Winn ConnectYourCare

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