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Helping Employees Stretch their Paychecks: The Benefits of Boosting Employee Financial Wellness
March 20, 2018 WEBCAST
SHRM [Society for Human Resource Management]

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Tenth Circuit Rules in Favor of DOL Fiduciary Restrictions on Annuity Products
"[T]he Court described these annuity products' characteristics as not only complex, but creating more investment risk for savers, being less predictable than other investments, and offering more opportunity for advisor conflicts of interest in the sales process. The court cited these factors in finding that there was justification in the DOL's 2016 guidance requiring them to be sold under the terms of the more restrictive BIC exemption." [ Market Synergy Group, Inc. v. DOL , No. 17-3038 (10th Cir. Mar. 13, 2018)]
Ascensus

Navigating the Compliance Challenges of Missing Participants

The DOL is coming ... Pension plan audits are on the rise with a specific focus on the Term-Vested population and RMD. Contact the pros at PBI to learn more about our new Term-Vested Audit & Remediation Service.

Voya Escapes Lawsuit Over 401(k) Robo-Adviser Fees
"A 401(k) investor who accused Voya Financial Inc. and its subsidiaries of overcharging for investment advice from robo-adviser Financial Engines Advisors LLC won't get another chance to make her case. A federal judge on March 13 denied the investor's request to amend her complaint ... The judge reiterated her prior conclusion that the investor couldn't use [ERISA] to challenge these fees, because the defendants weren't acting as ERISA fiduciaries when negotiating fees with Financial Engines."
Bloomberg BNA

401(k) Fiduciaries: Is It Time to Hone Your Processes?
"Establish and run processes that demonstrate they have leveraged the lowest cost fees based on their plan size and servicing needs. If the fees their plan pays exceed market norms, they need to be able to show why the fees are reasonable.... Articulate why one investment was chosen over the other. Dig down deeper in understanding whether actual fund plan investments align with investment objectives."
Fiduciary Plan Governance, LLC

A Worrying Shift for Pension Funds: Retirees Will Soon Outnumber Kids
"In 12 years, about one in five Americans will be of retirement age, and by 2035, those 65 and older will outnumber those under 18 by about 2 million, according to the latest estimates released by the [Census Bureau]. The consequences are wide-ranging, from the solvency of Social Security to increased health-care costs for an aging population."
Pensions & Investments

Michigan Reveals Post-Detroit Pension Woes
"Under a new state law, cities, towns and authorities were required this year to submit financial details on the status of their pension and health care plans. The results, so far, are grim: the Michigan Treasury Department found that over 110 -- or more than one fifth -- have underfunded pension or retiree health-care plans."
Bloomberg

2018 SPARK National Conference -- June 14-15, National Harbor, MD

The retirement services industry's leading event for top marketing, sales, administration and record keeping professionals. Comprehensive agenda is designed to meet the needs of 401(k) Plan Providers, Financial Advisors and Record Keepers.

Kentucky Budget Director Sues State Pension Coalition to Keep Actuarial Analysis Under Wraps
"Kentucky Budget Director John Chilton is suing the state's Public Pension Coalition over the group's request to review an actuarial analysis of the governor's pension reform plan that was announced in October.... Kentucky Attorney General Andy Beshear [had] decided on Feb. 5 that Mr. Chilton had violated the Kentucky Open Records Act and gave the budget director 30 days to release the analysis."
Pensions & Investments

Simplify Your Retirement with These Money Tips
"Select primary accounts.... Pay off all debts.... Consolidate investment funds.... Eliminate paper.... Downsize or move to a newer home ... Rent ... Cut subscriptions and recurring expenses.... Consider an annuity."
U.S. News & World Report

Letter from ERIC to U.S. Senate on Lifetime Income Disclosure Act
"[ERIC] strongly support[s] the Retirement Enhancement & Savings Act (RESA), and encourage[s] you to advance this legislation in the Omnibus package currently being debated -- with one critical modification relating to the Lifetime Income Disclosure Act (LIDA) mandate. The modification would mandate that plan sponsors disclose to plan participants the importance of savings for a lifetime of needs and share with participants a [DOL] financial tool that would allow them to illustrate their account balance as a lifetime income stream."
The ERISA Industry Committee [ERIC]

Joint Select Committee Starts Process to Save Multiemployer System
"Based on the comments of Committee members [the Pension Rights Center is] hopeful that they will put aside their differences and work in a bipartisan fashion to develop a fair and comprehensive solution to the multiemployer crisis by year's end.... The Committee is charged with developing recommendations and legislative language that will 'significantly improve the solvency of multiemployer pension plans and the Pension Benefit Guaranty Corporation' by November 30th, 2018."
Pension Rights Center

New ERISA Claims Procedures for Plans Providing Disability Benefits Effective April 1, 2018
"Appeal denial notices should be revised to include the time limitation as to when a claimant can bring a claim in federal court under Section 502(a). All notices must also be presented in a culturally and linguistically appropriate manner, which means that the plan must provide oral language services to claimants such as answering questions in a non-English language and providing assistance with filing claims in any applicable non-English language."
Holland & Knight

New Disability Claims Procedure Regulations Take Effect on April 1, 2018
"If the new claims procedures are not followed, then the claimant will be deemed to have exhausted administrative remedies. As a result, the claimant would be allowed to immediately file a lawsuit to seek a review of the disability determination. The court reviewing the claim would not be required to give any deference to the prior decision of the plan as a result of the failure to follow the new claims procedures."
Duane Morris LLP

GAO Testimony before House Oversight Committee: Federal Regulations -- Opportunities to Improve the Effectiveness of and Transparency of Regulatory and Guidance Practices (PDF)
21 pages. "[T]his testimony discusses : [1] the extent to which the Departments of ... Health and Human Services (HHS), and Labor (DOL) adhered to Office of Management and Budget (OMB) requirements and internal controls when developing regulatory guidance and [2] agencies' compliance with the Congressional Review Act (CRA) for regulations promulgated during presidential transitions. We consistently found opportunities to improve the transparency and effectiveness of regulatory and guidance practices." [GAO-18-436T, March 14, 2018]
U.S. Government Accountability Office [GAO]

Rethinking Executive Compensation While Awaiting Section 162(m) Guidance (PDF)
"[T]he lost deductions may become a cost of doing business and a trade-off for the tax benefits corporations receive from the reduction in the corporate tax rate from 35% to 21% ... [P]otentially applicable techniques to preserve the compensation deductions or maximize other benefits [include] [1] Use nonqualified deferred compensation annuities.... [2] Maintain grandfathered plans.... [3] Set more challenging performance goals.... [4] Spread vesting.... [5] Award incentive stock options (ISOs)."
Fulcrum Partners LLC

State Tax Implications of Federal Tax Changes to Section 162(m)
"[R]olling conformity states will automatically incorporate the income tax base changes resulting from the changes to Section 162(m) unless they choose to affirmatively decouple from these provisions in the Act.... [S]tatic conformity states with fixed dates before the passage of the Act would not adopt the changes to Section 162(m) unless they amend their laws to conform to the Act.... [T]axpayers in these states will still have to separately track their starting point for state corporate income purposes, using the IRC in effect as of its fixed date (i.e., before the passage of the Act)."
Morgan Lewis

2018 Proxy Season: Early Trends in Pay Ratio Disclosure (PDF)
"The median pay ratio disclosed by these companies is 87x. The lowest ratio is 1x (Apollo Global Management, Dorchester Minerals and The Carlyle Group) and the highest ratio is 1465x (Fresh Del Monte Produce Inc.).... As expected, the pay ratio correlates with company size, with larger companies disclosing higher ratios."
Compensation Advisory Partners [CAP]

Pay Ratio Disclosures Mislead Investors
"An early tabulation of companies' first reported CEO pay ratios confirms what many observers had been expecting: taken as a whole, the disclosures are rife with misleading information.... The rule is intended to provide investors with more information with which to evaluate CEO compensation. However, in many cases the disclosures do no such thing. Most damning are examples of companies reporting dubiously low ratios."
CFO

The ABCs of NQDCs: They're Not DC Plans, Despite the Similarities (PDF)
"[B]ecause NQDC plans are not formally funded, the returns generated by participants' investment elections become an aggregate liability for the plan sponsor on the company's balance sheet. As a result, the selection of the investment menu is one of the key drivers of complexity in managing liabilities."
Callan; free registration may be required

Church Plan Excluded Eligible Employees -- Correction by Amendment?
A local church sponsors a 403(b)(9) plan offered by the pension board of the denomination. The Plan meets the definition of a church plan for ERISA and IRC purposes. Adoption agreement states that all employees working 20 hours or more per week are eligible to participate. Church did not realize this and has only been allowing employees working 40 hours per week to participate. Can this be corrected by adopting a retroactive amendment changing eligibility to 40 hours per week?
BenefitsLink Message Boards

Individual Owns LLC Filing a 5500-EZ, Wants to Count Compensation as Director of Unrelated Company
Individual is the 100% owner of a single member LLC that sponsors a solo 401(k) plan and files Form 5500-EZ. He sits on a board of directors, which will pay director fees to the individual (reported on a separate Schedule C). Should he become a participating employer under the plan if he wants to count his director fees as the basis for contributions on his behalf? If so, does that ruin the plan's ability to file a Form 5500-EZ?
BenefitsLink Message Boards

Can a Bonus Plan's Language Legally Require a 401(k) Plan to Disregard the Bonus Payments?
An 401(k) plan defines "compensation" as W-2 wages with no exclusions. The plan sponsor also provides other benefit programs (call them incentive compensation; long-term performance plan; performance-based bonuses; employment contract giving an executive a bonus as a percentage of division's profit; etc.) that provide employees what are essentially cash bonuses, however labeled, that are clearly W-2 wages in the year paid. The other plans then say in their boilerplate something like "any amount paid under this plan/agreement shall not be included for any other purpose, including any pension plan." Does that work to exclude those payments from the 401(k) plan's compensation definition?
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