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BPP401k.com Newsletter 08.05.15

Ontario Demands Feds Co-Operate on ORPP Ontario wants the federal government to reverse its decision not to assist with the implementation of the Ontario Retirement Pension Plan. Source: Benefitscanada.com

A Plan Sponsor Implements a Financial Wellness Program Addressing all of employees’ financial concerns can increase retirement savings behavior and outcomes. Source: Plansponsor.com

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

Ten Ways To Find An Old 401k Plan 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

403(b) Plans

IRS Audits of 403(b) Plans Article reviews the top seven issues identified during IRS examinations of 403(b) plans. Source: Mhco.com

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

Fiduciary and Plan Governance Material

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

Good Bets by a 401k Plan Sponsor to Avoid Liability 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

What Can Fiduciaries Learn From Tibble v. Edison? 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

CEOs Must Monitor Their Company’s Retirement Plans or Take Responsibility for Costly Mistakes A recent Supreme Court ruling making it easier for retirement plan participants to sue organizations acting as plan sponsors should alert CEOs to scrutinize retirement plan investments on a regular basis. Source: Chiefexecutive.net

Insight: Studies, Research and White Papers

Americans’ Financial Security Increasingly Tied to Employee Benefits 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

Employers Out of Touch With Employee Perception of Benefits 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

New Research Provides Analysis of Roth IRA Investors The report, “The IRA Investor Profile: Roth IRA Investors’ Activity, 2007-2013,” provides analysis of contribution, conversion, rollover, withdrawal, and asset allocation activity among Roth IRA investors, based on data for 5.2 million Roth IRA owners at year-end 2013. Source: Ici.org

Items of Special Interest to Service Providers

When Must a Fiduciary Just Say No to a Client? 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

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

SEC Faces Its Own Debate on Fiduciary Advice Standards 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

NTSA Conference Presentation Sheds More Light on DOL’s Fiduciary Rule During the first round of breakout sessions at the 2015 NTSA 403(b) Summit in Nashville, an expert panel led a lively and engaging discussion about the Department of Labor’s re-proposed fiduciary rule, and the potential impact on common business practices. Amy L. Simonson summarizes who, what, when, where, why and how of the proposed rule. Source: Ntsa-net.org

Target-Date Funds

Target-Date Funds: The Good, the Bad, and the Unknown With all of this interest and growth, we might pause to ask, what’s all the hoopla about TDFs? What’s the problem TDFs are intended to solve? How do TDFs work and do they work well? Can and should they be improved? In other words, what’s the good news about TDFs and what still needs improvement? Source: Forbes.com

Plan Automation

When Onboarding New Participants, Keep It Simple Plan advisers should be wary of potential complications when designing their automatic features. Most retirement plan advisers are looking at what makes the biggest impact in getting people in the plan and new ways to get younger employees engaged with the retirement plan — and keep them there. Source: Planadviser.com

Court and Legal

401k Plan Participants Allowed to Pursue Claim for Disgorgement 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

Eleventh Circuit Again Affirms Dismissal of Stock Drop Claim Against Delta Air Lines The Eleventh Circuit affirmed dismissal of ERISA breach of fiduciary claims against Delta Air Lines and other alleged plan fiduciaries in connection with a defined contribution plan’s investments in Delta Air Lines stock. In so ruling, the Court joined a growing number of decisions following Dudenhoeffer that have dismissed claims based on public information. Source: Erisapracticecenter.com

Compliance and Regulatory

Retirement Practice Legal Consulting & Compliance Quarterly Update 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 (PDF File)

Curtailment of Determination Letter Program Will Impose New Compliance Burdens 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

The Voluntary Fiduciary Correction Program — How to File an Application 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

What Was Hot in the Second Quarter of 2015 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

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

DOL Proposed Investment Fiduciary Definition Rule — Update 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

“Cycle E” Determination Letter Application Deadline Approaching It will take considerable time and effort to review, restate and amend a plan document to incorporate the 2014 List. The restatement process should begin soon in order to meet the January 31, 2016, filing deadline. In addition to the time and effort required to review, restate and amend a plan document, further time will be necessary (1) to complete the determination letter application and (2) to permit the plan sponsor to formally adopt the amended and restated plan. Source: Benefitslawinsider.com

IRS Shuts Down Email Questions to Employee Plans Office Beginning Oct. 1, it’s back to the 20th century for anyone who used to ask a question of the IRS Employee Plans Office. Source: Asppa.org

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