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Daily Article Digest - Updated Throughout the Day

This digest contains a wide variety of the freshest source material dealing with current trends, opinion, news, legislative action, investments, marketing, sales, consulting, and legal issues regarding 401k, 403(b) and other retirement plans. Each listing contains a headline (hyperlinked to the source document), description, source of the item, and the month and year posted to this digest.

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401k Plan Participants Allowed to Pursue Claim for Disgorgement

Summary: Participants in a 401k plan had standing to pursue the restoration of profits by their employer following the transfer of their individual account assets to a defined benefit plan, according to the U.S. Court of Appeals in Richmond VA.

Source: Wolterskluwerlb.com, July 2015

Supreme Court Decision on Same-Sex Marriage: Impact on Benefit Plans

Summary: In Obergefell v. Hodges, the U.S. Supreme Court ruled by a 5-4 margin that the 14th Amendment of the Constitution requires states to allow and to recognize same-sex marriages. This landmark decision will affect the terms and administration of employee benefit plans, especially health and group benefit plans.

Source: Towerswatson.com, July 2015

DOL Proposed Investment Fiduciary Definition Rule -- Update

Summary: The DOL's proposed conflict-of-interest rule received considerable attention this week. The public comment period on the proposed rule closed July 21, 2015 and, as of that date, the DOL had received nearly 600 comment letters.

Source: Sibson.com, July 2015

What Can Fiduciaries Learn From Tibble v. Edison?

Summary: The Tibble decision presents some obvious implications for plan sponsors and fiduciaries. Plan sponsors need to engage in periodic monitoring of their retirement plan investments, with proper documentation, either on a quarterly or semi-annual basis. The investment monitoring should include criteria that encompasses performance and risk-based analytics as well as benchmarking the fees, both investment and administrative, paid by participants and the plan.

Source: Schneiderdowns.com, July 2015

A Plan Sponsor Implements a Financial Wellness Program

Summary: Addressing all of employees' financial concerns can increase retirement savings behavior and outcomes.

Source: Plansponsor.com, July 2015

SEC Faces Its Own Debate on Fiduciary Advice Standards

Summary: Transcripts from a tough SEC hearing called earlier this month show it's not just the Department of Labor considering changes to the application of the fiduciary standard.

Source: Planadviser.com, July 2015

IRS Audits of 403(b) Plans

Summary: Article reviews the top seven issues identified during IRS examinations of 403(b) plans.

Source: Mhco.com, July 2015

Good Bets by a 401k Plan Sponsor to Avoid Liability

Summary: There are bets that a plan sponsor can place that will have great odds in having the plan be in good shape and away from liability. This article is about betting that a 401k plan will be fine by making good decisions.

Source: Jdsupra.com, July 2015

How Safe From Creditors is Your 401k Money if You Roll it to an IRA?

Summary: "If I roll my 401k money to an IRA, how safe will it be from creditors?" This is one of the most common -- and in some cases, important -- questions people have when they are considering moving their 401k money to an IRA.

Source: Irahelp.com, July 2015

DOL Clarifies Safe Harbor for Selection of Annuity Providers for DC Plans

Summary: The DOL recently issued Field Assistance Bulletin 2015-2 to help provide guidance and clarify the scope of fiduciary obligations with respect to annuity selections under such safe harbor.

Source: Haynesboone.com, July 2015

What Was Hot in the Second Quarter of 2015

Summary: The prospect of the DOL's fiduciary proposal, allocation of revenue sharing in 401k plans, and capturing of rollovers from retirement plans continued to be the top issues in the second quarter. In fact, two of the issues "merged" in the sense that the hottest issue in the fiduciary proposal is distributions from retirement plans and the capturing of rollovers.

Source: Fredreish.com, July 2015

When Must a Fiduciary Just Say No to a Client?

Summary: While being careful to limit your business to its most profitable niche goes without saying, if you're a fiduciary, telling a customer no may be your legal obligation. Unlike nearly every other business, the failure to say no can have disastrous consequences for both the individual fiduciary and the business offering those fiduciary services.

Source: Fiduciarynews.com, July 2015

Will Trial Lawyers be the Sole Beneficiary of a Watered-Down Fiduciary Rule?

Summary: The law firm of Schlichter, Bogard & Denton has had a very good couple of weeks. After winning two high profile 401k fee lawsuits, courts have approved the payment of more than $31.9 million in legal fees. These settlement fees got the author thinking about the DOL's proposed fiduciary rule. Would the proposal, if implemented, give trial lawyers more fodder for excessive 401k fee lawsuits? Author thinks it would.

Source: Employeefiduciary.com, July 2015

How the EPCRS Changes Might Impact 403(b)/457(b) Plans

Summary: The IRS released Revenue Procedure 2015-27, which may significantly impact qualified plans, such as 401k and defined benefit plans. But what is the effect on 403(b)/457(b) plan sponsors? This article examines the changes to EPCRS, to determine whether or not they have a specific impact on various types of plans.

Source: Cammackretirement.com, July 2015

Curtailment of Determination Letter Program Will Impose New Compliance Burdens

Summary: The IRS announced a major curtailment of its determination letter program for individually designed qualified retirement plans that will impose significant new compliance burdens on employers and other entities that sponsor Individually Designed Plans.

Source: Bsk.com, July 2015

Ten Ways To Find An Old 401k Plan

Summary: The problem is with job changes, household moves, and failing companies it might be easier than you think to lose track of an asset. Here are ten options to consider if you find out there's an asset you feel is rightfully yours.

Source: Brightscope.com, July 2015

Employers Out of Touch With Employee Perception of Benefits

Summary: Workplace benefit plans are key part of employees' future financial success but the majority of employers don't think their employees value the benefits that are offered.

Source: Benefitnews.com, July 2015

The Voluntary Fiduciary Correction Program -- How to File an Application

Summary: The DOL provides a model application form. A plan sponsor utilizes this form to report the plan, the transaction that was corrected, the correction amount, a description of the parties involved, when the breach occurred, and how the breach was corrected. Article answers question like: What proof needs to be attached, prohibited transaction and taxes, does the VFCP application open a plan up to audit?

Source: Belfint.com, July 2015

Retirement Practice Legal Consulting & Compliance Quarterly Update

Summary: This edition includes articles on DOMA's demise, major changes to the IRS determination letter program, monitoring the prudence of DC plan annuity contracts, and much more.

Source: Aon.com , July 2015

Americans' Financial Security Increasingly Tied to Employee Benefits

Summary: This study, which measures how Americans perceive and value their employee benefits, uncovers a significant disconnect between employers and employees when it comes to benefits offered in the workplace.

Source: 401khelpcenter.com, July 2015

Economists Want You to Stop Borrowing From Your 401k

Summary: U.S. retirement industry leaders talk about the prospect of doing away with 401k loans before younger workers follow in the footsteps of previous generations and start using their retirement account like an ATM. Workers who take out 401k loans risk not having enough saved for retirement because they miss out on growth while the money is borrowed.

Source: Reuters.com, July 2015*

Advisors Say (Some) Designations Matter, but Do Plan Sponsors Care?

Summary: Apparently designations do matter...to some at least. They can be an essential component of developing and expanding a successful practice. But all certifications are not created equal.

Source: Napa-net.org, July 2015

Workers Rely on 401k Providers for Retirement Advice: Cerulli

Summary: A 401k provider is most often the primary source for retirement advice among retirement plan participants, according to recent data from Cerulli Associates. Only 15% of retirement plan participants under 30 rely on an advisor or planner. Cerulli finds that 17% of the respondents indicate relying on no source for advice at all.

Source: Thinkadvisor.com, July 2015

Settlements Reached in Two Major Retirement Plan Cases

Summary: Sponsors, take heed. The terms of two settlements in retirement plan cases, one for a record amount, were agreed upon this week.

Source: Benefitspro.com, July 2015

Pension Rights Center Comment Letter on the DOL's Fiduciary Rule Proposal

Summary: The Pension Rights Center disputes industry criticism that the rule is "unworkable." It appears that the Department of Labor has taken into account industry concerns in developing new principles-based prohibited transaction exemptions and in the careful structure and language of the proposed rule itself. The agency has threaded the regulatory needle to weave together a carefully-crafted proposal that should satisfy the majority of stakeholders.

Source: Pensionrights.org , July 2015

PSCA Comment Letter on the DOL's Fiduciary Rule Proposal

Summary: PSCA supports the core approach of the proposed rule and believes the retirement system will be greatly strengthened by ensuring that investment advice is provided in the recipient's best interest. Nevertheless, they are concerned that there remains uncertainty about the distinction between "investment advice" and "recommendations," as well as mere "neutral, informative descriptions" of plan or IRA operations and "factual comparisons" of investment options or taxation of those options.

Source: Psca.org , July 2015

No More Determination Letters? What are Plan Sponsors to Do?

Summary: The IRS has just announced that it is not only discontinuing its requirement that individually-designed plans seeking approval be reviewed for new determination letters every five years, but it will no longer review these plans except on adoption and termination. The excuse given is lack of manpower and resources, but the decision leaves adopters of individually-designed plans in a quandary.

Source: Pensionsbenefitslaw.com, July 2015

DOL Sues for 401k Fringe Benefit Contributions

Summary: The agency says $108,000 in fringe benefit contributions were not forwarded to the Brunk Industries Contractors and Employees 401k Plan.

Source: Plansponsor.com, July 2015

Automatic Enrollment: Only Part of an Overall Strategy

Summary: Automatic enrollment is here to stay. It is increasingly popular and sooner or later, it may become the norm in most 401k plans. Regardless of the goals you hope to accomplish, it is important to understand that it often will not achieve the desired result on its own. However, as part of an overall strategy, automatic enrollment can be an effective springboard to improve plan operations and create a culture of savings among employees.

Source: Markleyactuarial.com, July 2015

BlackRock, Vanguard, Fidelity Push Back on DOL Fiduciary Rule

Summary: The world's largest money manager said the government's effort to protect retirement savers from excessive fees and unscrupulous brokers would favor index funds at the expense of other products investors should use.

Source: Investmentnews.com (registration may be required), July 2015

Collective Trusts: The Truth About Documents and Reporting

Summary: Misperceptions abound about collective investment trusts (CITs). This article provides the true story behind two critical CIT topics: documents and reporting.

Source: Invesco.us.com, July 2015

NAPA Updates DC Industry Consolidation List

Summary: The DC industry is entering its next phase. The financial service industry in general, and retirement planning specifically, seems far too attractive for outsiders to ignore as technology breaks down the traditional barriers and obviates the need for capital-intensive technology and distribution. Here is NAPA Net's newly updated provider consolidation list.

Source: Napa-net.org, July 2015

401k Plans, Shopping and the Supreme Court

Summary: Imagine heading to the mall with a personal shopper, and as you're about to hand her your credit card, she says, "You do understand that I'm under no obligation to get you anything you really need, or at a price you can really afford, right?" Now imagine that instead of just shoes or a new coat, you're talking about investments in your 401k that will ultimately determine your ability to retire comfortably.

Source: Nerdwallet.com, July 2015

A Caveat to the Advice to Pension Fiduciaries to "Document, Document, Document"

Summary: It is good to have a formal record of steps that have been taken. Whether it's the evaluation of providers, the benchmarking of fees, or any of the many other steps that fiduciaries take as part of their oversight of the investment program, you'll want it on record. But, while some documentation serves to explain decisions, and to demonstrate due process, not all documentation has that effect.

Source: Russell.com, July 2015

Comments on DOL's Proposed Fiduciary Rule

Summary: This page contains all the comments that the DOL has received on its proposed fiduciary rule. The comment period ended July 21st.

Source: Dol.gov, July 2015

Firm Awarded $22mm in Fees for Lockheed 401k Case

Summary: Attorneys who obtained a $62 million settlement from Lockheed Martin Corp. for participants in the company's 401k plan are entitled to $22.3 million in fees and costs as part of the settlement, a federal court in Illinois has ruled.

Source: Bna.com, July 2015

Legal Considerations When Engaging an Investment Professional for a Participant-Directed DC Plan

Summary: Considering the potential liability that fiduciaries of ERISA plans face with respect to plan investments, it makes sense to structure a participant-directed defined contribution plan in accordance with Section 404(c) of ERISA. However, given that the legal status of the service provider under ERISA creates stark differences in the retained duties and liabilities of the plan fiduciaries, fiduciaries need to understand the provider's status and which scenario applies to their specific arrangement.

Source: Bklawyers.com , July 2015

Guidance Eases Use of Annuities in 401k Plans

Summary: The Obama administration is taking further measures to encourage employers, as plan sponsors, to add an annuities option within their 401k and other defined contribution plans.

Source: Shrm.org, July 2015

Ontario's Pension Power Grab?

Summary: A new Fraser Institute report raises serious questions about the veracity of the Ontario government's claim that a new provincial pension plan, intended as a supplement or alternative to restructuring and expanding the Canada Pension Plan, is needed because of a savings shortfall among retiring Ontarians.

Source: Pensionpulse.blogspot.com, July 2015

IRI Comment Letter on the DOL's Fiduciary Rule Proposal

Summary: The Insured Retirement Institute submitted this comment letter to the Department of Labor regarding the DOL's proposed fiduciary rule. The IRI letter details numerous concerns regarding unintended consequences from the proposed rule.

Source: Myirionline.org , July 2015

Tibble Confirms Onus on Employers for Retirement Plan Fund Monitoring

Summary: A recent U.S. Supreme Court ruling may have an impact on employers who offer retirement defined contribution plans. The case fortifies the idea that continuous retirement plan monitoring and removal of imprudent investments is a critical duty of all investment fiduciaries and those that fail to do so could face costly litigation.

Source: Mcgladrey.com, July 2015

Where Key Players Align in the DOL Fiduciary Fight

Summary: As the DOL's fiduciary rule proposal's comment period ends, here's a snapshot of some of the larger parties' stances.

Source: Investmentnews.com (registration may be required), July 2015

Perez Says DOL Fiduciary Debate Shifts From Whether to How

Summary: Secretary of Labor Thomas Perez told lawmakers that the debate surrounding the fiduciary rule proposal has evolved from whether it's necessary to how to put the fiduciary measure into practice.

Source: Investmentnews.com (registration may be required), July 2015

ICI Seeks Improvements Toward a Workable Fiduciary Standard Rule

Summary: In a set of four comment letters filed with the DOL, ICI details concerns about the current fiduciary standard rule proposal and offers several detailed suggestions for improving the rule to make it workable.

Source: Ici.org, July 2015

Supreme Court Same-Sex Marriage Ruling Likely to Require More Changes

Summary: The United States Supreme Court issued its long-awaited opinion in Obergefell v. Hodges, ruling that states must license a marriage between two people of the same sex. Article comments on the key issues for employers to review in determining whether changes are needed to their employee benefit plans and tax and payroll practices.

Source: Groom.com , July 2015

Additional Thoughts on the Latest Tussey v. ABB Decision

Summary: Based on this case, past case law, as well as DOL publications including the most recently issued Field Assistance Bulletin 2015-02, there are six basic obligations a fiduciary must consider when selecting and monitoring investments.

Source: Fraplantools.com, July 2015

Infographic: A Framework for Designing Your DC Investment Menu

Summary: With employees running the gamut from unengaged to motivated self-starters, employers face a challenge: How to assemble a core menu of investment options to serve all of their employees?

Source: Fidelity.com , July 2015

IRS Announces Revisions to the Employee Plans Determination Letter Program

Summary: In Announcement 2015-19, the Internal Revenue Service describes important changes to the employee plans determination letter program for qualified retirement plans. Here is what the announcement says.

Source: Erisalawyerblog.com, July 2015

Analysis: Impact of the DOL's Fiduciary Proposal on Participant Investment Advice

Summary: The proposal will have a significant impact on broker-dealers. It will be difficult for advisors to avoid fiduciary status when assisting participants with investment decisions. Where broker-dealers receive variable/indirect compensation on the basis of advisor recommendations, all of the available PT exemptions are highly nuanced and challenging to satisfy. Otherwise, broker-dealers will need to re-examine their advisors' practices carefully to ensure that they are providing only investment education, or develop other strategies to avoid PTs.

Source: Drinkerbiddle.com, July 2015

DCIIA Comment Letter on the DOL's Fiduciary Rule Proposal

Summary: Defined Contribution Institutional Investment Association (DCIIA) provided this commentary to the Department of Labor on its re-proposal of the Definition of the Term "Fiduciary."

Source: Dciia.org , July 2015

Using Behavioral Finance to Shape Financial Planning

Summary: The field of behavioral finance is not new, but employing its core tenets is gaining favor among investors, advisors, and plan sponsors who recognize its value in influencing sound financial decisions. Paper explores these behaviors.

Source: Belr.com , July 2015

Comment Period Closes on DOL Fiduciary Rule

Summary: The DOL re-proposed its fiduciary rule mid-April. Under the proposal, brokers and advisers to individual retirement plans would have to follow the same stringent rules as registered investment advisers. July 21 was the last day to submit a comment on the proposal. Article reviews many of the comments received.

Source: Benefitnews.com, July 2015

Time to End 401k Matches?

Summary: Some policy experts say 401k matches cost taxpayers more than they are worth and may actually hinder retirement savings.

Source: Bankrate.com, July 2015

American Retirement Association Files Comments on Fiduciary Proposal

Summary: The comment letter sets out a number of modest improvements to the re-proposed rule to improve the implementation of such a best interest standard. The suggested modifications would assure not only that advisers and providers could continue to assist plan participants with key concerns, including rollovers or investment education, but also help expand retirement plan coverage by working with small business owners to establish and operate ERISA retirement programs.

Source: Asppa.org, July 2015

IRS Announces Changes in Determination Letter Program

Summary: The IRS has issued Announcement 2015-9, describing changes to its determination letter program for individually designed qualified retirement plan documents.

Source: Ascensus.com, July 2015

Retirement Advisor Council Call for Modifications to the Best Interest Contract Exemption

Summary: The Retirement Advisor Council submitted to the DOL its comments regarding the proposed definition of the term "Fiduciary"; Conflict of Interest of Interest Rule. In its comments, identified enhancements that will strengthen the regulation.

Source: 401khelpcenter.com, July 2015

Leak-Proofing Your 401k Plan

Summary: Leakage occurs in 401k plans when account balances permanently leave plans. Typically these amounts are never restored leaving participants with 401k balances at retirement well short of their needs. Author reviews several plan design elements that can limit leakage.

Source: 401khelpcenter.com, July 2015

Fiduciary Outsourcing: What Liability Does the Plan Sponsor Retain?

Summary: This article addresses the question, "What is the extent to which fiduciary liability may be 'outsourced' in an outsourcing transaction?" It discusses three different approaches: (1) the "traditional" approach, using plan delegation provisions; (2) designating the outsourcer as the "named fiduciary" in the plan document; and (3) providing contractual remedies to allocate the "cost" of any fiduciary liability to the outsourcer.

Source: Russell.com , July 2015

The Many Faces of Fiduciary Outsourcing: ERISA Sections 3(16), 3(21) and 3(38)

Summary: This article reviews the meaning under ERISA of the terms "fiduciary" (ERISA 3(21)), "administrator" (ERISA 3(16)) and "investment manager" (ERISA 3(38)). It then considers, in each case, how those terms are used when discussing outsourcing. Finally, it briefly discusses the significance of these distinctions for purposes of the outsourcing relationship and contracting.

Source: Russell.com , July 2015

Clearing a Path for State-Based Retirement Plans

Summary: President Obama announced today that he has directed the Labor Department to issue a rule that would clarify the path forward for state-based retirement savings initiatives, including with respect to requirements to automatically enroll employees and for employers to offer coverage, for workers who don't currently have access to a 401k at work.

Source: Dol.gov, July 2015

High 401k Fees? Your Employer Could Be Liable

Summary: High fees in a 401k or other retirement plan aren't just bad for employee participants. A recent Supreme Court ruling shows they can spell trouble for the employer, too.

Source: Csmonitor.com, July 2015

Video: How Target-Date Funds Help Manage Inflation

Summary: Worried that inflation might spend your retirement money before you do? Learn how target-date funds can help manage inflation risk. What to look for: A retirement portfolio designed to support inflation adjusted spending over the long haul.

Source: Blackrock.com, July 2015

Proof That Americans Are Delaying Retirement

Summary: Think you'll retire at 65? The Transamerica Center for Retirement Studies' 16th Annual Transamerica Retirement Survey has found otherwise. The survey found that most workers in their 60s have dropped the American dream of fully retiring at age 65. A full 82% expect to work or are working past 65, or don't plan to retire at all.

Source: Wallstreetdaily.com, July 2015

A 401k Fiduciary Checklist

Summary: Many retirement plan sponsors are under-informed about their ongoing fiduciary duty when making decisions regarding their 401k plan. This is a list of items to consider when outsourcing plan oversight responsibilities.

Source: Shrm.org, July 2015

Money Market Reform: An Update for DC Plans

Summary: Last year, the SEC approved amendments to Rule 2a-7 of the Investment Company Act of 1940 which governs U.S. money market funds. Plan sponsors should revisit the objectives and risk tolerance for their money market vehicles, especially those invested in prime money market funds which are most affected by the new amendments. This article provides an update on this topic.

Source: Rocaton.com , July 2015

Investment Review Checklist for 401k Plan Committees

Summary: This Checklist provides a list of issues that an investment or administrative committee of a 401k plan governed by the Employee Retirement Income Security Act of 1974 (ERISA) should consider, including those raised by the US Supreme Court's recent decision in Tibble v. Edison Int'l.

Source: Practicallaw.com, July 2015

Record Retention Rules

Summary: It's a well-known fact that ERISA established specific reporting and disclosure obligations for qualified retirement plans. Less well known but equally important is the fact that ERISA also spells out how long a plan sponsor must retain plan documents and records that support those obligations.

Source: Mhco.com, July 2015

How Employers Can Avoid Turning Their Retirement Plan Into an HR Disaster

Summary: While a retirement plan is an important employee benefit, the flip side is that a poorly run retirement plan can expose the plan sponsor to liability and become a human resources disaster. This article is about how plan sponsors can avoid having their retirement plan become human relations debacle.

Source: Jdsupra.com, July 2015

DOL Clarifies Safe Harbor on DC Annuity Distribution Options

Summary: Through Field Assistance Bulletin 2015-02, DOL attempts to address what it believes to be confusion among plan fiduciaries regarding how to comply with the Safe Harbor with regard to the selection and monitoring of annuity providers. Article contains further information.

Source: Groom.com , July 2015

The Hidden Risks of Employee Benefit Plan Audits

Summary: An employee benefit plan that has over 100 participants is required to have an audit to accompany the filing of its Form 5500. Failure to make sure that an employee benefit plan audit is done properly may spawn personal liability for a plan sponsor's officers -- including the CFO.

Source: Cfo.com, July 2015

The Retroactive Amendment Fix for Plan Operational Failures

Summary: IRS standards for approving a retroactive amendment fix are not formally set out anywhere. In practice, however, the IRS normally needs to see some convincing documentary evidence indicating that the way the plan was actually operated was the way the sponsor, participants and any relevant TPAs or vendors assumed the plan was written.

Source: Benefitslawadvisor.com, July 2015

Three Ways 403(b) Sponsors Can Streamline Their Plan

Summary: In 2009, new regulations started making 403(b)s look like the 401k market by requiring a written plan document for the first time. This regulation is a great foundation, but author sees three ways to further enhance 403(b) plans.

Source: Bcigroup.com, July 2015

How to Clarify the Murky Regulations Governing IRA Rollovers

Summary: The DOL has indicated that it will be responsive to suggested rule changes that reduce regulatory burdens or provide practical advantages, so long as investors' best interests are served and core fiduciary principles are not compromised.

Source: Investmentnews.com (registration may be required), July 2015

DOL Official Promises Changes to Fiduciary Rule

Summary: A Labor Department official said the agency's proposal to raise investment-advice standards for brokers working with retirement accounts would be modified in response to criticism.

Source: Investmentnews.com (registration may be required), July 2015

Retirement Crisis: Real, or Hype?

Summary: Have we got a crisis, or merely a series of hard problems? That question, posed by American Enterprise Institute Resident Fellow Alex Pollock at a July 15 discussion at AEI's Washington, DC offices, captured the ultimate issue the expert panel addressed.

Source: Asppa.org, July 2015

Employers Can Be on the Hook for Too-High 401k Fees

Summary: High fees in a plan aren't just bad for employee participants. A recent Supreme Court ruling shows they can spell trouble for the employer, too.

Source: Nerdwallet.com, July 2015

Why Plan Sponsors Make Bad Plan Designers

Summary: Putting employers in charge of designing defined contribution plans and members in charge of managing them has undermined retirement outcomes, according to a paper by three financial policy and law researchers.

Source: Ai-cio.com, July 2015

The Expanding Role of Rollovers

Summary: Although traditional IRAs can be opened with either rollovers or contributions, rollovers tend to be the most common source for new traditional IRAs and account for the vast majority of those IRA openings, according to a new report.

Source: Ntsa-net.org, July 2015

Small Businesses Can Get IRS Penalty Relief for Unfiled Retirement Plan Returns

Summary: The Internal Revenue Service encouraged eligible small businesses that did not file certain retirement plan returns to take advantage of a low-cost penalty relief program enabling them to quickly come back into compliance.

Source: Irs.gov, July 2015

How to Take Advantage of 401k Catch-Up Contributions

Summary: There's a special tax perk for retirement savers over 50, but most people can't afford to use it. Still, the tax benefit of taking advantage of catch-up contributions can be huge.

Source: Usnews.com, July 2015

SEC to Focus on Retirement Accounts

Summary: The U.S. Securities and Exchange Commission's Office of Compliance Inspections and Examinations announced a multi-year Retirement-Targeted Industry Reviews and Examinations Initiative.

Source: Vedderprice.com, July 2015

Nondiscrimination Testing Required for 403(b)s

Summary: Top-heavy testing under Code Section 416, as well as minimum participation testing under 401(a)(26) and average deferral percentage testing under section 401k, are not required for 403(b) plans, but the degree to which other nondiscrimination testing is required will vary by the type of sponsoring entity.

Source: Plansponsor.com, July 2015

Reducing Retirement Plan Leakage

Summary: The cost of plan leakage can have an effect on your participant's ability to replace their incomes in retirement. This is part one of a two part series that identifies the most common leaks to defined contribution plans and ways plan sponsors can reduce their effects on participant's retirement outcomes.

Source: Pension-Consultants.com, July 2015

NAPA National DC Recordkeepers List Updated

Summary: The mid-year update of NAPA Net's list of recordkeepers is complete. While the number of recordkeeper deals this year has been relatively low, the deals have been significant. Review the list and commentary in this article.

Source: Napa-net.org, July 2015

Do You Feel Lucky, 401k Saver? Well, Do You?

Summary: Do you feel lucky? Retirement plan participants who have left savings accounts behind when changing jobs should ask themselves this question. If their addresses are not up-to-date in the records of their former employers' plans, then these participants will need plenty of luck to track down and preserve their hard-earned assets.

Source: Marketwatch.com, July 2015

Puerto Rico: Important Updates and Upcoming Deadlines Concerning Employee Benefits

Summary: This article discusses important updates related to Puerto Rican plans, including upcoming deadlines, with respect to employee benefits impacting plan sponsors.

Source: Littler.com, July 2015

DOL Provides Key ERISA Guidance on QLAC/DC Lifetime Income

Summary: The DOL just published its "first serious guidance" on the selection and monitoring of lifetime income annuity providers and contracts with the publication of FAB 2015-2, guidance "which is very necessary for the success of the Qualified Longevity Annuity Contracts."

Source: Businessofbenefits.com, July 2015

Supreme Court's Same-Sex Marriage Ruling in Obergefell: Effect on Benefit Plans

Summary: Two years after recognizing same-sex marriages for purposes of federal law, the U.S. Supreme Court has gone a step further, requiring that all states recognize same-sex marriages as valid if they were valid in the jurisdiction where they were performed.

Source: Benefitsbryancave.com, July 2015

Obama Doubles Down on DOL Fiduciary Rule

Summary: President Obama reiterated his administration's intent to implement the Department of Labor's proposed fiduciary rule. The comments from the president are his latest commitments of political capital to the DOL's efforts.

Source: Benefitspro.com, July 2015

President Calls on DOL to Empower States on Retirement Savings

Summary: President Obama on July 13 called on the Department of Labor to "provide a clear path forward for the states to create retirement savings programs." He directed Secretary of Labor Thomas Perez to publish a proposed rule by the end of the year clarifying how states can move forward, including with respect to requirements to automatically enroll employees and for employers to offer coverage.

Source: Asppa.org, July 2015

Customize DC Investments for Participant Success

Summary: Most participants in defined contribution (DC) plans are not on track to achieve retirement income adequacy. A key reason is that the investment lineups in most DC plans are structured in a way that reduces participants' likelihood of implementing well-diversified and age-appropriate investment strategies. Since they are not investment experts, most DC participants would benefit from a simplified lineup.

Source: Aon.com , July 2015

DOL FAB 2015-02 Regarding Annuity Selection Safe Harbor Regulation for DC Plans

Summary: Guidance for fiduciaries under 29 CFR 2550.404a-4 regarding the selection and monitoring of annuity providers and contracts for benefit distributions from defined contribution plans.

Source: Americanbenefitscouncil.org , July 2015

Employer Considerations for Retirement Plan Administration Post Obergefell

Summary: On June 26, 2015, the U.S. Supreme Court struck down state laws banning same-sex marriage in Obergefell v. Hodges. Retirement plans must now revisit all provisions that make distinctions between opposite-sex and same-sex spouses and determine whether those distinctions can be maintained. This article is tailored for private employers who sponsor employee benefit plans subject to ERISA.

Source: Icemiller.com, July 2015

On Remand, Tussey v. ABB Defendants Found to Breach ERISA but Win on Procedural Technicality

Summary: On July 9, 2015, the district court in Tussey v. ABB ruled on the issues remanded from the 8th Circuit's mixed decision last year. The outcome of this decision has been driven by the unique procedural aspects of the case, rather than substantive ones. For ERISA fiduciaries that might take comfort, don't.

Source: Fraplantools.com, July 2015

Court Permits Fed Garnishment of Retirement Plan Benefit

Summary: Court permitted the federal government to enforce a judgment against a qualified retirement plan to collect a participant's criminal fine under the MVRA. But garnishment orders raise difficult administrative issues.

Source: Ebia.com, July 2015

Tools for Reviewing Retirement Plan Compliance Available From IRS

Summary: Use of the subject matter packages is optional, and the Worksheets and Checksheets are not submitted as part of the determination letter application process. But plan sponsors, TPAs, and others will likely find them to be a helpful resource, not only in preparing determination letter applications but also in performing voluntary compliance audits.

Source: Ebia.com, July 2015

Can Technology Solve the Mystery of 401k Fees?

Summary: Figuring out 401k fees requires diving into oceans of fine print. Fees come in dozens of configurations and it can be exceedingly difficult to deduce whether you're getting the best deal. An Israeli startup named FeeX says it has a solution: an automated service that calculates the fees in your old 401ks and recommends whether a rollover makes sense.

Source: Bloomberg.com, July 2015

Preserving the Role of the Independent Fiduciary Post-Dudenhoeffer

Summary: In the wake of Fifth Third v. Dudenhoeffer, a complaint that seeks to hold an ERISA fiduciary liable for failing to divest a plan of employer stock based solely upon publicly available information fails to state a plausible claim. An "independent" fiduciary only has access to public information. For this reason, claims that an independent fiduciary breached his ERISA fiduciary duties in connection with publicly traded company stock necessarily fail post-Dudenhoeffer.

Source: Alston.com , July 2015

Form 5500 and Plan Audits

Summary: The Form 5500 filing deadline of July 31 is rapidly approaching. For plans of a certain size an audited financial statement is also required to be attached to the 5500 filing. Article reviews the regulations on when an audit is required.

Source: 401khelpcenter.com, July 2015

401k Catch-up Contributions Didn't Increase Savings Rate Much

Summary: The participants 50 or older who have taken advantage of contributing much more of their salary to 401k retirement plans through catch-up provisions already were among the highest savers, and so few workers overall are constrained by the annual IRS limits that catch-up contributions aren't a solution for low retirement savings rates.

Source: Thompson.com, July 2015

Retirement Planning for the Single Individual

Summary: Single individuals face many challenges as they head into retirement. It is important to be aware of what some of those issues are and to work with your advisors to make sure that you have a plan in place for the future.

Source: Schneiderdowns.com, July 2015

How Advisers Can Encourage Sponsors to Make Plan Design Changes

Summary: When it comes to advisers encouraging sponsors to make plan design changes, some get worried about a variety of issues including budget and time concerns. Article gives insight on how retirement plan advisers can convince sponsors to improve their plans.

Source: Planadviser.com, July 2015

Appellate Court Weighs In on Posthumous QDRO

Summary: Appeals court rules on the validity of certain posthumous qualified domestic relations orders, and whether divorce settlement agreements qualify as or supersede QDROs.

Source: Planadviser.com, July 2015

The Next Steps for K-12 403(b) Reform

Summary: Advocate Steve Schullo says reform is moving in the right direction, but there is more work to do.

Source: Morningstar.com, July 2015

Senate Finance Panel Recommends Changes to Retirement System

Summary: On July 8, 2015, the Senate Finance Committee's Savings & Investment Tax Reform Working Group submitted bipartisan recommendations to the Chairman and Ranking Member of the Committee. Recommendations outlined here.

Source: Groom.com, July 2015

The Transition From DB to DC Plans: Does It Influence Elderly Poverty?

Summary: This study examines pension coverage, lump-sum distributions, annuitization, and annuity life options among Health and Retirement Study households observed at ages 65-69 and 75-79 and relates these pension provisions to poverty incidence and the risk of falling into poverty at older ages.

Source: Bc.edu, July 2015

New PSCA Survey Highlights 403(b) Plan Trends

Summary: The Plan Sponsor Council of America has released its 2015 403(b) Plan Survey of 478 organizations. The survey contains 124 tables of data that highlight retirement plan trends from non-profit organizations and public schools, colleges and universities. Select finds reviewed here.

Source: 401khelpcenter.com, July 2015

Fiduciary Advice Proposal Signals a Fundamental Shift in the DOL's Approach

Summary: The DOL's fiduciary proposal represents a fundamental shift in the Department's approach to regulating the retirement services industry. This article discusses three aspects of the proposal that illustrate this fundamental shift.

Source: Groom.com , July 2015

Discretionary vs. Directed Trustee

Summary: One important consideration for plan design is the designation of the plan's trustee(s). The appointment of the plan trustee is an important decision that must be understood and carefully considered. Article provides an overview of two options.

Source: Consultrms.com, July 2015

The Voluntary Fiduciary Correction Program -- Overview

Summary: To help plan sponsors correct plan operational errors or certain fiduciary violations, the EBSA offers a Voluntary Fiduciary Correction Program. This is an overview.

Source: Belfint.com, July 2015

Will the Average Retirement Age Continue to Increase?

Summary: This paper examines how changes in individual workers' past and present pension coverage, retirement incentives in Social Security, and retiree health insurance have contributed to retirement decisions for the 1931-1953 birth cohorts. It then uses these findings to project retirement behavior for the 1955-1987 cohorts.

Source: Bc.edu , July 2015

Do Catch-Up Contributions Increase 401k Saving?

Summary: To encourage Americans to save more for retirement, some suggest raising 401k "catch-up" contribution limits. To assess such an option, this analysis estimates the effects of a 2001 increase in 401k limits that also introduced a higher "catch-up" limit for those 50 and over. Findings are not encouraging.

Source: Bc.edu , July 2015

Form 5500 Deadline Looms

Summary: Defined benefit plans, defined contribution plans and 403(b) annuity arrangements with calendar year plans, take note: July 31st is right around the corner. That's the day by which most plans must file the dreaded and onerous Form 5500. The clock is ticking on filing the form that reports on 2014.

Source: Asppa.org, July 2015

Why Your Next Dollar Shouldn't Go to Your 401k

Summary: When it comes to saving for retirement, there may be a better place for your next dollar than your 401k. Most people don't think of their health savings account as a way to save for retirement, but it can be.

Source: Cnn.com, July 2015

403(b) Plan Sponsors Committed to Employer Match

Summary: About four out of five employers that sponsor 403(b) plans made a contribution to them in 2012, with 31% of plans using a simple match formula in which they match a certain percentage of an employee's contributions up to a maximum percentage of employee salary, a recent study found.

Source: Benefitnews.com, July 2015

403(b) Automatic Enrollment Best Practices Guide

Summary: This new resource offers best practices for 403(b) non-ERISA plans is a comprehensive resource prepared by NTSA. It provides information relevant to all stages of providing auto enrollment of 403(b) participants including what an employer should consider before adopting an auto enrollment plan.

Source: Ntsa-net.org , July 2015

2015 Recordkeeping Survey

Summary: The questionnaire for the 2015 PLANSPONSOR Recordkeeping Survey was distributed to known providers of full-service and unbundled recordkeeping for both qualified and nonqualified defined contribution plans. This is a summary of the survey results.

Source: Plansponsor.com, July 2015

Advisory Committee Suggests Additional Guidance for 403(b)s

Summary: Seven years after IRS regulations were implemented, 403(b) plans still have trouble with compliance. The Internal Revenue Service Advisory Committee on Tax Exempt and Government Entities has issued a report of recommendations to the IRS. This article reviews the committee's recommendations.

Source: Planadviser.com, July 2015

The Best Plan to Drive Your Retirement Needs

Summary: Similar to Smart Cars, SUVs and luxury sedans, each type of retirement plan suits different needs, regardless of how simple or complex your requirements. Article reviews the different plans.

Source: Markleyactuarial.com, July 2015

How Retirement Plan Advisors Can Benefit From Any New DOL Fiduciary Rule

Summary: Attorney Ary Rosenbaum opines on why any expanded fiduciary rule will be an opportunity for the advisor ready for this change because change in the retirement plan industry always equals opportunity for the bold.

Source: Jdsupra.com, July 2015

Same Sex Marriage: Effect on Benefits

Summary: The United States Supreme Court recently held in Obergefell v. Hodges that all states must recognize and allow marriages between same sex partners. Depending on an employer's current employee benefits plan, certain provisions may need to be changed in light of this ruling.

Source: Benefitsnotes.com, July 2015

Four Strategies to Help Increase 401k Participation

Summary: Americans need to save for retirement, but many are unsure how to go about it. Employers realize that they are part of the solution that can lead employees toward making choices that can help to drive better outcomes. This white paper features four strategies and action steps which may help increase plan participation.

Source: Baml.com , July 2015

Change in Average Account Balances From January 1, 2014 to July 1, 2015

Summary: This is a chart of the change in average account balances (by age and tenure) from January 1, 2014 to July 1, 2015 among consistent 401k participants with account balances as of December 31, 2013.

Source: Ebri.org , July 2015

Relationship Between Automatic Enrollment and DC Plan Contributions: Evidence From a National Survey

Summary: This paper reexamines the determinants of 401k participation and contributions in the presence of automatic enrollment using nationally representative data from the Health and Retirement Study for 2006 through 2012. The results confirm previous findings that automatic enrollment is associated with a higher proportion of workers included in DC plans; however, automatically enrolled workers are less likely to contribute to their DC plans than voluntarily enrolled workers.

Source: Bc.edu, July 2015

The Downside of Automatic 401k Enrollment

Summary: Employees participating in auto enrollment tend to contribute less than people who sign up for 401k plans on their own, often because their employers set a low default contribution level.

Source: Cnbc.com, July 2015

Optimal Equity Glidepaths in Retirement

Summary: When systematic withdrawals are made from a retirement portfolio, glidepaths are often assessed via the probability of ruin (or success). This papers goal is to derive the optimal static glidepath with respect to this metric.

Source: Ssrn.com, July 2015

Supreme Court Declines to Hear "Would Have" vs. "Could Have" ERISA Case

Summary: Supreme Court has declined to hear an important ERISA fiduciary breach appeal from the 4th Circuit Court of Appeals called Tatum v. RJR Pension Committee. In declining to hear the case, the Supreme Court probably took into consideration a brief from the Solicitor General and the Department of Labor that argued the 4th Circuit got the decision right and that the Court shouldn't hear it.

Source: Fraplantools.com, July 2015

Restating Your Preapproved Plan Document: Opportunities and Pitfalls

Summary: Purveyors of preapproved DC plan documents are now in the process of distributing document restatement packages to employers. All of these materials will come with the admonition that the employer should review the documents carefully with legal counsel before executing the new adoption agreement. And employers would do well to heed that advice, because the restatement of a preapproved plan document presents opportunities both to identify existing administrative problems and avoid future problems.

Source: Employeebenefitsupdate.com, July 2015

Fiduciary Liability for 403(b) Non-ERISA Plans

Summary: Many have been arguing about the extent of fiduciary liability for non-ERISA 403(b) plan sponsors for years now. This was caused by the 2007 changes to the 403(b) tax regulations, which significantly increased employer responsibility for the maintenance of 403(b) plans. This greater level of employer involvement lead to our ongoing discussions on the sort of liability could these plans cause for the non-ERISA plan sponsor.

Source: Businessofbenefits.com, July 2015

A Close Look at ERISA 403(b) Plans

Summary: Employees of educational institutions and other nonprofit employers who participate in 403(b) plans enjoy many investment options in their plans, according to a research study by BrightScope and the Investment Company Institute. Study also finds total costs of 403(b) plans decreased from 2009 to 2012.

Source: Ici.org , July 2015

401k Plans and the Fiduciary Standard

Summary: Employers are often placed in a position of trust with respect to their company's 401k plan. Unfortunately, until recently the responsibilities associated with that position have not been fully understood. That is about to change.

Source: Brightscope.com, July 2015

Tiered Penalties Increase for Plan Distribution Reporting Failures

Summary: President Barack Obama has signed into law the Trade Preferences Extension Act (H.R. 1295), which includes, among other things, an increase in the tiered penalty fees that apply to certain retirement distribution reporting failures.

Source: Ascensus.com, July 2015

How Small Business Owners Can Take Control of Their Retirement Future

Summary: Entrepreneurs are often quite confident when it comes to their business and finances. When it comes to retirement planning, however, many small business owners are not too sure about their future. Here are some steps they can take to control their retirement future.

Source: 401khelpcenter.com, July 2015

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