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College Professors Give Themselves a 'B' Grade in Financial Literacy
"[N]early one third (29 percent) of professors aren't sure of the investment mix of their retirement savings, suggesting they don't know if the investments they selected align to a specific financial goal and timeline.... When it comes to the financial wellness of non-faculty employees, 64 percent say they often worry about their financial situation, compared to 44 percent of professors." (Fidelity)

DOL Rule Generates Flood of Comments and Petitions
"The DOL reported 1,001 individual comments received during the [15-day comment] period, which closed March 17. These comments came from all corners -- activists, consumers, advisors and agents, companies such as Northwestern Mutual, trade associations and even lawmakers -- and appear split for and against the rule." (

IRS Requests Input for May Webinar on Minimum Present Value Requirements for Defined Benefit Plans
"The presentation will be posted to the IRS Video Portal in May 2017. The webinar will cover: [1] Final Regulations on IRC Section 417(e) partial annuity distributions; [2] Proposed regulations on other IRC Section 417(e)(3) requirements; [3] Types of benefit payments subject to minimum present value requirements; [4] Application of mortality discounts; [5] Proposed clarification of existing IRC Section 417(e)(3) rules. Email IRS [at] by 5 p.m. ET on April 17, 2017, with any suggestions for this presentation." (Internal Revenue Service [IRS])

[Official Guidance] Text of IRS Announcement 2017-4: Non-Applicability of Section 4975 Excise Taxes to Conform with DOL Temporary Enforcement Policy on Fiduciary Duty Rule (PDF)
"This announcement provides relief from certain excise taxes under Section 4975 of the Internal Revenue Code, and any related reporting requirements, to conform to the temporary enforcement policy described by the [DOL] in Field Assistance Bulletin (FAB) 2017-01 with respect to the final fiduciary duty rule ... and related prohibited transaction exemptions[.]" (Internal Revenue Service [IRS])

The Educated Participant: How Employers Can Improve Retirement Readiness
"After plan sponsors recognize that their participants need more help, the next question is almost always: Do we expose ourselves to liability for participant investment losses if we voluntarily provide participant education? Fortunately, the [DOL] provides a number of protections for plan sponsors who provide education or more personalized advice, and the safe harbor for participant-directed investments may provide additional protection." (PenChecks)

Five Reasons Millennials Aren't Saving for Retirement
"They take jobs without retirement benefits.... They aren't eligible for the 401(k) plan.... They fail to sign up.... Parenthood and homeownership responsibilities ... Low salaries." (U.S. News & World Report)

Use of Electronic Medium to Furnish Participant Notices, Documents and Elections (PDF)
"In this age of electronic communication the ability to deliver participant documents, notices, consents and election options through electronic medium can be a great convenience and cost savings to plan sponsors. Both the Treasury and the DOL recognize this and each has its own regulation for use of electronic media.... The document, notice, election or consent will be treated as provided in writing if all the requirements of the appropriate regulation are met." (VOYA Financial)

Court Rules No Deferential Review Where Discretionary Authority Was Addressed in SPD But Not in Plan
"Including discretionary language only in the SPD may not ensure deferential review of plan decisions -- particularly in light of cases emphasizing the supremacy of the formal plan document under ... While it is impossible to gauge whether this denial would have survived deferential review, this decision illustrates some potential pitfalls that can arise from common practices." [Nieves v. Prudential Ins. Co. of America, No. 16-768 (D. Ariz. Jan. 17, 2017)] (Thomson Reuters / EBIA)

Bill to Help Small Business Retirement Plans Introduced in House, Senate
"Bipartisan legislation has been introduced in both the House and the Senate to make it easier for small businesses to offer retirement plans -- or at least easier to file Form 5500. The bill directs the [DOL] and the Treasury Department to allow employers and sole-proprietors participating in retirement plans administered in the same way to file a single aggregated Form 5500." (American Society of Pension Professionals & Actuaries [ASPPA])

Sixth Circuit Joins Six Other Circuits in Ruling Exhaustion of Plan's Administrative Procedures Not Required When Asserting Statutory Violations
"The Sixth Circuit [ruled] that the district court erred by ordering the workers to pursue a 'futile' administrative process before bringing their suit in court.... The court also highlighted that '[i]f such exhaustion were required for those statutory claims, in order for Plaintiffs to receive proper resolution from the plan administrator, the administrator would need to determine whether the retroactive amendment was properly instituted in the first place, i.e., whether the amendment was legal.' The Sixth Circuit held this not to be the administrator's role, but the role of the courts. The decision aligns the Sixth Circuit with the Third, Fourth, Fifth, Ninth, Tenth, and D.C. circuits[.]" [Hitchcock v. Cumberland Univ. 403(b) DC Plan, No. 15-1215 (6th Cir. Mar. 14, 2017)] (Greenberg Traurig)

[Guidance Overview] Notable Changes to Form 5500 for 2016
"The IRS decided not to require certain information to be entered on the form ... The new maximum penalty for a plan administrator who refuses to file or fails to file a complete or accurate return has been increased to $2,063 per day ... Schedules H and I: Line 5c is added which asks plans if it is a defined benefit plan does it maintain coverage by the PBGC insurance program.... Schedule SB: Updated for guidance issued in the Cooperative and Small Employer Charity Pension Flexibility Act, Pub. L. No.113-97 (CSEC Act)." (WithumSmith+Brown, PC)

[Guidance Overview] The Paradox of Participant Loans in Default: A Taxable Distribution of a Loan Balance Still Considered to Remain Outstanding
"[K]eeping two sets of books is sometimes a legitimate practice, required precisely to comply with IRS rules that regulate different aspects of each set of books. For example, the difference between deemed distributions of loans in default and the actual loan offset requires a double set of books.... The first set of books is needed to comply with the taxable distribution rules and the second one to comply with the top-heavy test and the maximum available loan computations." (Belfint Lyons & Shuman, CPAs)

The Top Four Lies Told by 401(k) Providers
"[1] Your 401(k) plan is free ... [2] I can setup your 401(k) plan in 15 minutes ... [3] Index funds deliver only average returns ... [4] I will eliminate your fiduciary liability." (Employee Fiduciary)

IRS Plans to Begin Issuing 'Sub-Regulatory' Guidance Again
"The [IRS] is continuing to have productive conversations with the Treasury Department and the Office of Management and Budget, said IRS Commissioner John Koskinen. And 'as we've been having discussions, we have made clear -- and people have agreed -- that a lot of the sub-regulatory guidance we issue is really for the benefit of the taxpayers,' he said March 21 ... 'I think we will begin to issue some greater guidance in those areas.' " (Bloomberg BNA)

[Guidance Overview] IRS Publishes Audit Guidelines for Hardship Withdrawals from 401(k) and 403(b) Plans
"The IRS audit guidelines only relate to the documentation requirements that apply to safe harbor hardship withdrawals, but are likely to also be relevant to non-safe harbor hardship withdrawals." (Miller Johnson)

Can Smaller Plan Sponsors Dream Big? Yes! A Case Study
"Recordkeeping fees were cut in half and a new best-in-class investment menu with a low cost index tier was implemented, along with transparent, direct-billed participant fees to replace revenue sharing (a unique arrangement for a 403(b) plan of this size). How did a plan sponsor such the size of [the Anglican Church in North America] accomplish so much and so quickly?" (Cammack Retirement Group)

Investment Management M&A Activity: Considerations for Plan Sponsors
"[A] reduction in the number of firms and strategies could actually be beneficial for investors due to improved fee transparency, reduced trading costs, upgrades in technology and potential enhancements in risk-appropriate allocations through the growing utilization of TDFs. Perhaps most important for defined contribution investors will be the streamlining of their investment lineup ... [T]here are also several downsides of which investors should be aware[.]" (Cammack Retirement Group)

Why You Shouldn't Stick With Your 401(k) Plan's Default Settings
"Sticking with a low default savings rate might cause you to miss out on part of the 401(k) match your employer offers.... [T]he more money you save up to the annual contribution limit, the bigger the dollar value of your tax break.... [C]heck out whether the target-date fund's underlying investments, the rate at which the fund grows more conservative and the fees charged suit your risk tolerance and investment needs." (U.S. News & World Report)

Please Pass the Matches: The Unfortunate Truth About Your SPDs
"Litigation has changed the original focus of the SPD from being a clear and concise summary of benefits to being an extensive and legalistic enumeration of a plan's provisions. Instead of plain, easy-to-understand English, the typical SPD is crammed with detailed minutia about the plan, which is generally written in the finest 'legalese.' ... [P]lan sponsors should consider communication and design techniques that will make the SPD a better reference tool by making it: [1] Easy to navigate; [2] Easy to understand; [3] Easy to access." (Findley Davies | BPS&M)

[Guidance Overview] New IRS Audit Guidelines for Safe Harbor Hardship Distributions
"[M]any third party administrators offer streamlined hardship withdrawal services and do not maintain source documents or summaries. Employers using such services should ask the third party administrator if it will be modifying its services in light of the new IRS guidance. If not, the employer should maintain summaries to meet the new guidelines in the event of an IRS audit." (Wilkins Finston Friedman Law Group LLP)

Why You Should Share Total Compensation Statements with Your Employees
"Most comp statements will at minimum provide information on the employee's cash compensation and a monetary value for non-cash benefits.... [S]hare compensation reports when it is relevant to the employee: Upon hire, after an increase in pay, or after a promotion." (PayScale)

[Opinion] ERIC Comment Letter to DOL Supporting Extension of Applicability Date of Fiduciary Rule (PDF)
"Not only is the plan sponsor harmed by the uncertainty on the state of the rule, but also the participants who may see a sudden decrease in important services if the plan sponsor is not provided adequate time to replace those services.... [ERIC] strongly encourage[s] the DOL to provide a new implementation date that allows for adequate time for service providers to notify plan sponsors of changes in services as well as adequate time for plan sponsors to implement any changes in retirement plan services." (The ERISA Industry Committee [ERIC])

DB Plan Providers Still Investing in Innovation
"[S]ome providers dedicated to the DB administration business are looking at online features.... Another innovation is providing DB plan sponsors with self-service ... When looking at DB plan providers, plan sponsors should question when they developed their software and how easy it is to enhance it ... [S]ome DB plan sponsors are surprised that fees aren't reduced when they freeze their plans." (PLANSPONSOR)

[Guidance Overview] IRS Reminds Taxpayers of April 1 Deadline to Take Required Retirement Plan Distributions
"[The IRS] reminded taxpayers who turned age 70-1/2 during 2016 that, in most cases, they must start receiving required minimum distributions (RMDs) from [IRAs] and workplace retirement plans by Saturday, April 1, 2017. The April 1 deadline applies to owners of traditional (including SEP and SIMPLE) IRAs but not Roth IRAs. It also typically applies to participants in various workplace retirement plans, including 401(k), 403(b) and 457(b) plans." (Internal Revenue Service [IRS])

[Guidance Overview] IRS Clarifies Permissible Substantiation Procedures for Hardship Withdrawals
"[B]efore relying on an employee's summary of the underlying documents, the plan must first [1] notify the requesting employee of various items of information, and then [2] obtain both general information concerning the participant and his or her request and more specific information concerning the event cited as justifying the hardship withdrawal.... Plans that have been relying on employee self-certifications should certainly do so. By providing the appropriate notice and obtaining the specified information, such self-certifications may be continued." (Spencer Fane)

TPA Alpha: A New Approach to Evaluating TPAs
"Much like investment managers, there are TPAs that underperform the market and deliver negative Alpha; some that are level with the market and deliver no Alpha; and other quality TPA firms that outperform the market with regard to services and capabilities that can deliver positive Alpha. If a similar premise was utilized in selecting TPAs, then the firm that has the highest probability of delivering positive Alpha would be the most obvious and prudent choice. How can this evaluation be conducted?" (Jason Brown and Patrick Shelton, via

Another Question is Answered in the Who's the Employer Q&A Column
"If the IRS just issued a determination letter to our client on a Cycle E submission ruling, stating that an affiliated service group does not exist, can we 'hang our hat on that' forever, provided the facts and circumstances never change?" (S. Derrin Watson, Esq. on BenefitsLink)

[Official Guidance] Text of 2016 IRS Form 8955-SSA: Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits (PDF)
"This form is required to be filed under section 6057 of the Internal Revenue Code. Information about Form 8955-SSA and its instructions is [online]." (Internal Revenue Service [IRS])

[Official Guidance] Text of 2016 IRS Form 5500-EZ: Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan (PDF)
"This form is required to be filed under section 6058(a) of the Internal Revenue Code. Certain foreign retirement plans are also required to file this form[.]" (Internal Revenue Service [IRS])

[Guidance Overview] Avoid Overpaying User Fees for Your VCP Submission
"The Employee Plans Voluntary Compliance function (VC) has noticed an increase in submissions with incorrect user fees. Many of these submissions include user fees higher than what is required.... Plan sponsors need to refer to Rev. Proc. 2017-4, Appendix A.08 to determine the appropriate VCP user fees for submissions made in 2017. As of February 1, 2016, we lowered the user fees for many types of 401(a) and 403(b) plan VCP submissions. Only use the 2016 version of Form 8951 (Rev. Sept. 2016), Compliance Fee for Application for Voluntary Correction Program (VCP), to determine specific user fee amounts; don't use the pre-2016 versions of this form as they contain inaccurate information." (Internal Revenue Service [IRS])

[Guidance Overview] Internal Memo Reveals IRS Expectations for Hardship Distributions
"According to the IRS, documenting an immediate and heavy financial need ... can be evidenced by either source documents, (e.g., estimates, contracts, bills, statements), or a summary of information from source documents. Whichever approach is taken, there must be sufficient detail to support the need for a hardship distribution." [Article includes a checklist of specific information needed for each type of hardship request.] (Ascensus)

How to Service Small Retirement Plans and Still Make a Profit
"Outsourcing ongoing investment monitoring and education meetings, taking work on a project basis and charging a flat fee are ways advisers can help small plans while making revenue." (InvestmentNews)

[Guidance Overview] IRS Views on Self-Certification of Financial Hardship
"In cases where any participant has received more than two financial hardship distributions in a single plan year, the guidelines advise agents to request source documents supporting those distributions if a credible explanation for the multiple distributions cannot be provided.... [P]lan sponsors may wish to consider limitations on the number of financial hardship distributions that a participant may take or to apply a more stringent process for approving requests for financial hardship distributions where more than two requests are made in any plan year." (Benefits Bryan Cave)

Put It in Writing! Why Your Pension or 401(k) Plan Should Have Written Policies
"Plan fiduciaries sometimes think that they have total flexibility to deal with issues if they don't commit their processes to writing, but ... when fiduciaries act without policies that set out good fiduciary processes, they may be missing important issues, such as benchmarking fees regularly, or monitoring the limits on plan loans. Just putting a policy together forces you to focus on how you will do what needs to be done.... Here are some of the policies that are becoming more common and the reasons to consider them[.]" (Cohen & Buckmann, P.C.)

[Guidance Overview] IRS Issues Substantiation Guidelines for Safe-Harbor Hardship Withdrawals
"Although the guidance does not have binding legal or regulatory effect, it nonetheless highlights what auditors of plans offering safe-harbor hardship distributions will be looking for ... and reinforces that plan administrators should be regularly reviewing their record retention practices. It also emphasizes the need for proper documentation and internal controls for such distributions, including, to the extent applicable, understanding between TPAs and employer plan sponsors regarding their respective roles in the review and documentation process, as well as the importance of substantiation before distributions are made." (McGuireWoods LLP)

[Guidance Overview] ERISA Civil Penalties: Adjusted Amounts for 2017
"DOL's penalties as they relate to ERISA violations pursuant to the Federal Civil Penalties Inflation Adjustment Act Annual Adjustments for 2017, which became effective on January 13, 2017." (Butterfield Schechter LLP)

Lump Sum De-Risking in 2017
"[This article discusses] how changes in interest rates, [PBGC] premiums and mortality tables may affect sponsor decisions to de-risk (or not de-risk) defined benefit plan liabilities in 2017. For purposes of this article, by de-risking we mean paying out a participant's benefit as a lump sum and thereby eliminating the related liability -- the 'low-hanging fruit' for pension de-risking efforts.... [F]or some sponsors there may be significant dollars at stake." (October Three Consulting)

[Official Guidance] Text of PBGC Interest Rate Update for Valuation and Benefit Payments in Single-Employer Plans, April and Second Quarter, 2017
"The second quarter 2017 interest assumptions under the allocation regulation will be 2.15 percent for the first 20 years following the valuation date and 2.60 percent thereafter.... The April 2017 interest assumptions under the benefit payments regulation will be 1.00 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." (Pension Benefit Guaranty Corporation [PBGC])

Five Things Every New CFO Should Know About the 401(k) Plan
"[1] Compliance: Understanding fiduciary responsibilities and liabilities ... [2] Investments: What are the options and are they low cost? ... [3] Overall plan costs: How much does your current plan cost and how much would your ideal plan cost? ... [4] Administrative work: Who is doing what for whom? ... [5] Employee experience: How well is the 401(k) serving the employees?" (ForUsAll)

[Guidance Overview] New IRS Guidance Makes Substantiating Hardship Withdrawals Easier (PDF)
"While not intended to be a statement of law, the memorandum provides IRS examiners with insight as to how to evaluate a plan's hardship withdrawal program. Most importantly, the memorandum provides plan sponsors an alternative, and much less burdensome, process to meet their hardship substantiation obligations." (Lockton)

The Misperception of Fiduciary Risk and Active Management in DC Plans: A Legal Perspective
"This white paper aims to help fiduciaries navigate the waters of plan investment selection and monitoring processes by: [1] Decoding the legal standards that apply to fiduciaries who are responsible for choosing investment options for their plans. [2] Identifying some guiding principles drawn from legal authorities that may assist fiduciaries assessing investment strategies such as active and passive as part of a plan lineup. [3] Emphasizing the importance of process as the most important factor in fiduciary decision-making." (T. Rowe Price)

PBGC 2015 Data Book (PDF)
27 pages. This edition of the PBGC Data Book, updated for the PBGC's 2015 fiscal year, contains financial information about the PBGC and the single-employer and multiemployer pension plans for which it provides benefit guarantees, with charts comparing the data to prior years. PBGC is now releasing data in groups, as they become available. The first release includes data in the Summary Tables, Claims Tables and Multiemployer Graphical Supplement. A Multiemployer Supplement includes time series data on participants in plans by zone status (as defined by PPA '06) through 2014. (Pension Benefit Guaranty Corporation [PBGC])

Is Your DC Plan's Investment Policy Statement Keeping You on Track? (PDF)
"[An] investment committee that tries to manage its DC plan without an IPS is apt to lose its way. On the other hand, if ... an IPS is unclear or confusing, it can also lead to bad outcomes.... [This article] explores the role the IPS plays in investment committee decision making, best practices in developing and maintaining an IPS, and ... how the IPS can be ideally positioned as a tool for plan management." (Callan Associates)

What Is the Difference Between a Record Keeper and a Third Party Administrator?
"A Third Party Administrator (TPA) is an organization or an individual that processes transactions and/or claims; or certain administrative aspects of employee benefit plans for a separate entity.... [A] record keeper's main function is to track how much you have, where it is, and what type of money it is (salary deferral, tax-deferred, taxable, employer-matched, etc)." (401kTV)

[Official Guidance] Text of IRS Notice 2017-22: Update for Weighted Average Interest Rates, Yield Curves and Segment Rates, March 2017 (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) of the Internal Revenue Code.... [T]his 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)." (Internal Revenue Service [IRS])

[Official Guidance] Text of DOL Field Assistance Bulletin 2017-01: Temporary Enforcement Policy on Fiduciary Rule (PDF)
"In the event the Department issues a final rule after April 10 implementing a delay in the applicability date of the fiduciary duty rule and related PTEs, the Department will not initiate an enforcement action because an adviser or financial institution did not satisfy conditions of the rule or the PTEs during the 'gap' period in which the rule becomes applicable before a delay is implemented ...

"In the event the Department decides not to issue a delay in the fiduciary duty rule and related PTEs, the Department will not initiate an enforcement action because an adviser or financial institution, as of the April 10 applicability date of the rule, failed to satisfy conditions of the rule or the PTEs provided that the adviser or financial institution satisfies the applicable conditions of the rule or PTEs, including sending out required disclosures or other documents to retirement investors, within a reasonable period after the publication of a decision not to delay the April 10 applicability date. The Department will also treat the 30-day cure period under Section IX(d)(2)(vi) of the BIC Exemption and Section VII(d)(2)(v) of the Principal Transactions Exemption as available to financial institutions that, as of the April 10 applicability date, did not provide to retirement investors the disclosures or other documents described in Section IX(d)(2)(vi) of the BIC Exemption and Section VII(d)(2)(v) of the Principal Transactions Exemption." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])

[Official Guidance] Text of FASB Accounting Standards Update 2017-07 (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (PDF)
58 pages. "The Board is issuing this Update primarily to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost... Topic 715, Compensation -- Retirement Benefits, does not prescribe where the amount of net benefit cost should be presented in an employer's income statement and does not require entities to disclose by line item the amount of net benefit cost that is included in the income statement or capitalized in assets.... To improve the reporting of net benefit cost in the financial statements, the Board added a standard-setting project to provide additional guidance on the presentation of net benefit cost in the income statement and on the components eligible for capitalization in assets." (Financial Accounting Standards Board [FASB])

Dispelling an Urban Legend: Participant Loans Do Not Result in Double Taxation
"If a plan participant needs a loan and takes a loan from the plan, or from a bank, or from a relative, the loan repayment is always made with after-tax dollars. Please note that loan proceeds are generally not taxable. If the loan repayments to a retirement plan were made with pre-tax dollars, the participant would effectively get TWO tax deductions or tax deferrals for only one distribution that will be taxable." (Belfint Lyons & Shuman, CPAs)

[Guidance Overview] 401(k) and 403(b) Plan Hardship Distribution Substantiation: What Will the IRS Be Looking For?
"In order to avoid potential unpleasantries on audit, plans that use an electronic or streamlined hardship distribution request process will need to take certain steps. First, the employer or TPA must provide the employee notice ... Second, the summary of information must include, at a minimum, the information specified in the [two recently issued IRS] memoranda ... Third, if a TPA administers hardship distributions, it should provide a report to the employer at least annually that describes the hardship distributions made during the year." (Jackson Lewis P.C.)

[Opinion] ACOPA Letter to IRS on Proposed Update to Minimum Present Value Requirements for Defined Benefit Plan Distributions (PDF)
"Many plans, especially small plans, do not use a pre-retirement mortality assumption to determine present values.... An update to the Section 417(e) regulations should make it clear that a plan that provides for no pre-retirement mortality in determining minimum present values is considered to be using Section 417(e) applicable mortality rates for those determinations.... The proposal should be revised to make bifurcation available to [Social Security Level Income (SSLI)] options with rules similar to those available for partial lump sum payments under Section 1.417(e)-1(d)(7)." (ASPPA College of Pension Actuaries [ACOPA])

[Official Guidance] Text of IRS Memo: Substantiation Guidelines for Safe-Harbor Hardship Distributions from Section 403(b) Plans (PDF)
"This memorandum sets forth substantiation guidelines for EP Examinations employees examining whether a section 403(b) plan safe-harbor hardship distribution is 'deemed to be on account of an immediate and heavy financial need' pursuant to Section 1.401(k)-1(d)(3)(iii)(B) of the Income Tax Regulations.... [The Feb. 23, 2017] 401(k) Memorandum and Attachment are also applicable to hardship distributions from section 403(b) plans[.]" (Internal Revenue Service [IRS])

Preparing Participants for the Next Market Downturn
"The best time to communicate to participants about how investment returns and market cycles work and the ongoing importance of proper diversification is not when a year like 2008 happens, but when the market is doing well (i.e., right now!). While a significant number of participants did experience the 2008 market correction and (hopefully) behaved prudently to maintain well-diversified portfolios (for those who did, their equity loss was generally recouped by 2012), there are now a number of early career workers who have never experienced a significant market downturn." (Cammack Retirement Group)

[Guidance Overview] Recent IRS Guidance for Hardship Distributions
"The Guidelines indicate that if the employer or administrator received a summary of source documents ... the IRS examining agent should inquire whether the employer or TPA had provided a specified notification to the participant prior to making the hardship distribution. Three of the four items on that notice are tax-related items ... The fourth item requires the participant's agreement to preserve source documents and make them available on request to the employer or administrator, without specifying the consequences of the participant's failure to comply with his or her agreement." (The Wagner Law Group)

TIAA Dodges Retirement Fee Lawsuit by University Workers
"Castel's decision puts an end to a proposed class action alleging that TIAA misused its dual position as record keeper and seller of group annuity contracts to take excessive compensation from retirement plan assets. Castel said TIAA's practice of refusing to share certain fees as a record-keeping offset with third-party providers wasn't an exercise of discretion that would make TIAA a fiduciary." [Malone v. Teachers Ins. & Annuity Ass'n of Am. (TIAA), No. 15-8038 (S.D.N.Y. Mar. 7, 2017)] (Bloomberg BNA)

Does the Fiduciary Exception Apply to Legal Advice Received By Insurers During the Claims Process?
"Adding to the body of conflicting authority on the scope of the attorney-client privilege in ERISA lawsuits, a district court has found that the fiduciary exception to attorney-client privilege applies to an insurance company that acts as a claim administrator, thus requiring disclosure of communications between the insurer and its lawyers regarding a claim for benefits during the claims process." [McFarlane v. First Unum Life Ins. Co., No. 16-7806 (S.D.N.Y. Feb. 6, 2017)] (Seyfarth Shaw LLP)

Three Common 401(k) Plan Errors (as Told by Employee Benefit Plan Auditors)
"[P]lan administrators and management must clearly understand the definition of eligible compensation, not only when the plan is created, but on an ongoing basis.... Plan sponsors should determine when contributions can be reasonably segregated, and this conclusion should be documented and monitored to make sure remittances are timely and that any late remittances are reported and appropriately corrected.... [P]lan sponsors and third-party administrators should have a formal approval process for hardship distributions, including obtaining documentation of the hardship reason, certification of the unavailability of alternative funding sources, and a procedure to assure employee contributions cease, if applicable." (EisnerAmper)

In a Significant Change, Second Circuit Requires Strict Compliance with DOL Claim Regs
"At least in the 2nd Circuit, new pitfalls await ERISA administrators processing claims and appeals from adverse benefit determinations. If that administrator fails to comply strictly with all [DOL] regulations regarding claims administration, it is likely to lose the significant benefit of the arbitrary and capricious standard of review." [Salisbury v. Prudential Ins. Co. of America, No. 15-9799 (S.D.N.Y. Feb. 28, 2017)] (Thompson Coburn)

Understanding the Role of a Benefit Plan Committee (PDF)
12 pages. "[T]he plan committee -- that is generally responsible for operating the plan -- is the party whose actions are critical for minimizing potential exposure to fiduciary violations that could lead to DOL enforcement and/or private litigation." (The Wagner Law Group, for Legg Mason)

Cybersecurity Threats: What Retirement Plan Sponsors and Fiduciaries Need to Know and Do
"While there is no comprehensive federal regulatory scheme governing cybersecurity for retirement plans and their service providers, many state laws ... include breach notification and private rights of action for the unauthorized disclosure of protected personal information, and state attorney generals have been active in enforcing these laws in cyber breach cases. In addition, existing guidance under ERISA already recognizes the risks associated with the electronic communication of plan information." (Poyner Spruill LLP)

[Guidance Overview] IRS Issues Memorandum on Substantiation Guidelines for Safe-Harbor Hardship Withdrawals from 401(k) Plans
"Although the Memorandum is not formal guidance, it does provide information on what the IRS considers sufficient substantiation and documentation for a hardship withdrawal.... [T]he Memorandum does not address substantiation of non-safe-harbor hardship withdrawals, although the employer should consider applying these standards for any hardship withdrawal." (Sherman & Howard)