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Headlines re Ret plans - admin, gathered by BenefitsLink.com



 



[Guidance Overview] Your 401(k) Plan 'Brokerage Window' May Require An S-8 Registration
"[T]he SEC set out standards a 401(k) plan sponsor should follow to keep its involvement from constituting an 'offer for sale' of a security such that registration would be required. Under these standards, plan sponsors should do no more than: [1] announce the existence of the 401(k) plan (sponsors may describe the self-directed 'brokerage window' as part of the investment alternatives but should take no action to draw employees' attention to the possibility of investing in employer securities); [2] make payroll deductions; and [3] pay administrative expenses, which cannot be tied to particular investments selected by employees. All communications of a soliciting nature should come from the broker." (Cadwalader, Wickersham & Taft LLP)



DOL Fiduciary Rule: A To-Do List for Plan Sponsors (PDF)
"[C]urrent employment arrangements for employees providing investment advice ... should be conformed before the applicability date (April 10, 2017).... [I]nvestment education materials, rollover and distribution forms, call center scripts, human resources procedures and related processes should be refined to reflect the modified rules.... Develop a procedure, or modify existing procedures, for ongoing monitoring of plan service providers and the information they are providing to participants ... Adapt existing plan practices and procedures to accept, and be prepared to receive and evaluate, the additional documentation and disclosures expected from product and service providers." (Sutherland Asbill & Brennan LLP)



[Guidance Overview] IRS Issues Draft Forms for 2016 ACA Reporting (PDF)
"The IRS expects to release final 2016 forms and instructions by the end of the year -- in time for the next reporting cycle in early 2017.... The IRS has made only minor changes to the forms, including adding two new 'Offer of Coverage' codes for use on Form 1095-C. The draft instructions also included some helpful clarifications." (EPIC)



[Guidance Overview] Fundamentals of Section 415(b) (PDF)
8 pages. "In some plans, it may be obvious that no one is affected by the Section 415(b) limit. In most other plans, simplified procedures may be applied to test the vast majority of retiring participant's benefits against the Section 415(b) limit and to isolate those few individuals whose benefits are close enough to the applicable limit to warrant detailed testing. In most cases, detailed testing will require the services of one or more outside experts[.]" (Gabriel, Roeder, Smith and Company)



Report of EPCU Completed Project: Partial Termination/Partial Vesting
"Over a span of 3 years, nearly 2,000 letters were sent. Approximately half of the contacts were due to errors on the Form 5500 return.... Taxpayers made errors in participant counts. Also, a significant number of plans had fully vested all their participants as a result of a partial termination but it was indicated on their Form 5500 that there were participants who were not fully vested. The plan administrators misinterpreted the Form 5500. They counted eligible participants who chose not to participate in their 401(k) plan as not being fully vested." (Internal Revenue Service [IRS])



New EPCU Compliance Project: Partial Termination
"[Q1:] Why did I receive an EPCU Compliance Check Letter? [A1:] You filed a Form 5500 series return indicating that the plan had a significant decrease in plan participants. Employers who have a decrease of 20% or more in participation may have experienced a partial termination. [Q2:] What is the EPCU attempting to determine? [A2:] We want to determine if the plan did experience a partial termination and did the plan administrators comply with the vesting requirements of Internal Revenue Code (IRC) section 411(d)(3). Additionally, we want to determine the accuracy of the information provided on Form 5500." (Internal Revenue Service [IRS])



EPCU Compliance Project: 5310-A Filing Project, Phase II
"[Q1:] Why did I receive an EPCU Compliance Check Letter? [A1:] This compliance check project will focus on plan sponsors who filed Form(s) 5310-A, Notice of Plan Merger, or Consolidation, Spinoff, or Transfer of Plan Assets or Liabilities; Notice of Qualified Separate Lines of Business with the [IRS].... [Q2:] What is the EPCU attempting to determine? [A2:] We want to clarify the reason for filing the form, its relationship pertaining to plan asset movement, and whether timely compliance under IRC section 6652(e) was met. In addition to timely filing, this project is focusing on trust and operational related areas of the plan based on the merger, consolidation, spinoff, or transfer of plan assets or liabilities." (Internal Revenue Service [IRS])



New EPCU Compliance Project: SIMPLE IRA Plans - Eligible Sponsors
"[Q1:] Why did I receive an EPCU compliance check letter? [A:] The information we have indicates you sponsor a SIMPLE IRA Plan, but appear to employ more than 100 employees who earn at least $5,000. [Q2:] What is the EPCU attempting to determine? [A:] Our goal is to ensure that employers sponsoring a SIMPLE IRA Plan are eligible to sponsor those plans." (Internal Revenue Service [IRS])



2016 Recordkeeper Services Guide
"Most providers that work with advisers are fairly flexible in terms of types of adviser partners.... [W]hile several providers work with designated adviser firms, none indicated that they will work only with designated firms, and just four out of the 45 said they work only with unaffiliated advisers. More than seven in 10 providers said they will work with nonaffiliated advisers or designated firms, as well as with their own affiliates.... All but two recordkeepers can support registered-investment-adviser (RIA)/hard-dollar fees; 83% (up from 77%) offer them ongoing trailing commissions; and 33 (72%) make [ERISA] accounts available." (planadviser)



[Guidance Overview] IRS Simplifies Rules for Allowing Participants to Take Partial Lump-Sum Distributions
"The new regulation permits a plan to bifurcate a participant's benefit and have the present value requirements of Section 417(e) apply only to the portion of the benefit that is payable in an accelerated form. The determination of the remaining percentage payable as an annuity depends on how the plan determines the accelerated form." (Cheiron)



[Guidance Overview] Filing an S-8 Might Be Required Even If Your Plan Does Not Offer a Company Stock Fund
"Companies that offer a company stock fund know that they need to register shares on a Form S-8 filed with the SEC. But what about companies that do not offer a company stock fund investment option under their 401(k) Plan? ... [T]he SEC published a new C&DI, Question 139.33, confirming its position ... that a company that does not offer a company stock fund investment option under its 401(k) Plan still may be required to file a Form S-8 if it makes available a brokerage window feature through which participants could invest their own contributions in company stock." (Winston & Strawn LLP)



How to Calculate the Value of Your Benefits
"It's 'open enrollment' season ... [and] a good time ... to estimate how much the benefits you choose are worth to you: Health Insurance (typically $5,000 -- $30,000) ... Retirement Plan (typically 3-6 percent of your salary in matching contributions) ... Stock Purchase Plan (typically 10 to 15 percent of market value per share purchased) ... Disability Insurance ($2,000 to $5,000 per year) ... Life Insurance ($250 to $500 per year) ... Employer Contribution to FICA (7.65 percent of salary) ... Unemployment Insurance (0.3-1.5 percent of salary) ... Your company may offer other benefits such as tuition reimbursement, pre-paid legal assistance, commuter benefits, health and wellness programs, access to group long term care insurance[.]" (Financial Finesse)



New IRS e-Services Authentication Process Requires Re-Registration
"The IRS ... is strengthening the authentication process for identifying users and that the new, more stringent procedures will require existing users to re-register (Oct. 24 is the target date for the start of re-registration) ... Any current e-account holder is affected, which the IRS said includes: [1] Electronic return originators; [2] Return transmitters; [3] Large business taxpayers required to e-file; [4] Software developers; [5] Health care law insurance provider fee/branded prescription drug filers; [6] Health care law information return transmitters/issuers; [and] [7] Reporting agents[.]" (Journal of Accountancy)



The Costs to Small Businesses of Starting Up a Retirement Plan
"[T]here are a variety of factors to be considered ... but, [when] asked how much (on average) out-of-pocket would it cost a 10-person firm to set up a DC plan, such as a 401(k), the answers broke down as: 44.3%: $2,000-$3,000; 27.5%: $1,500-$2,000; 17.5%: $500-$1,000; 7.7%: more than $5,000; 3.0%: less than $500." (National Association of Plan Advisors [NAPA])



[Guidance Overview] Proposed Missing Participant Program Expansion (PDF)
"The proposed PBGC defined contribution plan program is optional for most defined contribution plans subject to ERISA.... [Such plans] would either transfer all missing participant accounts to the PBGC or notify the PBGC of where all the missing accounts were transferred ... Because defined contribution plans already have guidance for addressing missing participants in terminated plans (Field Assistance Bulletin 2014-01), the proposed program seeks to incorporate those requirements into the program, requiring the same search or determination outlined in existing guidance before the plan determines a participant is missing." (Ascensus)



Kubler-Ross and IRS Announcement 2016-32
"In Announcement 2016-32, the IRS requested comments on how [individually designed] plans can maintain compliance going forward since determination letters are no longer available.... The IRS is asking if there are additional provisions that would also be appropriate to incorporate by reference.... The IRS would like to know if there are other provisions that could possibly be avoided and the likelihood that the plan sponsor will actually amend the plan when the provision becomes applicable.... [T]here are challenges to switching to a pre-approved prototype or volume submitter plan, and the IRS wants to know about them ... What might depress practitioners most is that [these] are the only ones the IRS came up with as possibilities." (Benefits Bryan Cave)



[Guidance Overview] Death Master File Certification Program Finalized
"Pension plan administrators often need DMF information to determine when to terminate benefits to a deceased participant or when to direct payments to a beneficiary. The final regulations [issued by the National Technical Information Service of the U.S. Department of Commerce] outline the procedures for becoming certified to access DMF information. The final rules take effect on November 28, 2016. People who were certified before then will remain certified for one year after their certification date. After that, they must obtain recertification." (Willis Towers Watson)



[Official Guidance] 2016 IRS Form 4972 and Instructions: Tax on Lump-Sum Distributions (PDF)
"Use Form 4972 to figure the tax on a qualified lump-sum distribution you received in 2016 using the 20% capital gain election, the 10-year tax option, or both. These are special formulas used to figure a separate tax on the distribution that may result in a smaller tax than if you reported the taxable amount of the distribution as ordinary income. You pay the tax only once, for the year you receive the distribution, not over the next 10 years. The separate tax is added to the regular tax figured on your other income." (Internal Revenue Service [IRS])



[Guidance Overview] PBGC Finalizes Reduced Late Premium Filing Penalties (PDF)
"As proposed in April, PBGC has cut their penalties for late payment of annual premiums in half and slice d them even further for plan sponsors who have a history of timely payment. The rule applies to both single-employer and multiemployer plans." (Xerox HR Services)



ERISA: How Do You Spell (Equitable) Relief?
"In an ERISA case, what does it take to assert a claim for equitable relief? If the complaint does not assert an alleged breach of fiduciary duty, the claim for equitable relief should be dismissed." [Owens v. Liberty Life Assurance Co. of Boston, No. 15-00071 (W.D. Ky. Sept. 12, 2016)] (Lane Powell PC)



[Guidance Overview] Proposed Regulations Would Establish PBGC Missing Participant Program for Terminating 401(k) Plans
"A DOL safe harbor allows fiduciaries to make distributions to IRAs on behalf of individuals who fail to make distribution elections upon a plan termination. Once finalized, the PBGC's proposal would provide another option for terminating 401(k) plans; it would not, however, help continuing plans locate missing participants." (Thomson Reuters / EBIA)



Supreme Court Pauses Ninth Circuit's Decision in Church Plan Case
"Associate Justice Anthony Kennedy granted Dignity Health a temporary reprieve from complying with [ERISA] until the eight justices decide whether or not to take up their appeal. In July, the Ninth Circuit determined that Dignity Health didn't qualify for a religious exemption from ERISA and its employee pension system couldn't be considered a church plan. Dozens of lawsuits have been filed against faith-based organizations over the issue. The lawsuits target some of the nation's largest health systems." [Dignity Health v. Rollins, No. 16-258 (S.Ct. Sept. 21, 2016)] (Modern Healthcare; registration may be required)



[Official Guidance] Text of DOL Notice of Extension of Comment Period on Proposed Changes to Annual Information Return/Reports (Form 5500)
"The comment period for the Notice of Proposed Revision of Annual Information Return/Reports and the Notice of Proposed Rulemaking is extended to December 5, 2016.... The Agencies are not prepared at this time to grant a more extended deadline for public comments on the proposed form revisions and regulatory amendments because of concern about potential adverse effects on the timing and cost of the EFAST2 recompete process.... The deadline for capable businesses to respond on the Request for Industry Feedback is not being extended in this Notice.... It is not clear at this time that a public hearing will necessarily contribute to the decision-making process by clarifying one or more significant issues affecting the proposal, but the Agencies will be in a better position to evaluate that issue after receiving the public comments on the proposals. Similarly, the issue of the effective date of final form changes is better addressed in a final notice of form revisions after the Agencies have had the benefit of public input on the proposals and have decided upon the final form changes and regulatory amendments that will be adopted." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])



[Official Guidance] Text of PBGC Final Rule: Late Premium Payment Penalty Relief
13 pages. "The [PBGC] is lowering the rates of penalty charged for late payment of premiums by all plans, and providing a waiver of most of the penalty for plans with a demonstrated commitment to premium compliance.... There are two levels of penalty, which heretofore have been 1 percent per month (with a 50 percent cap) and 5 percent per month (capped at 100 percent).... This final rule cuts the rates and caps in half (to 1/2 percent with a 25 percent cap and 2-1/2 percent with a 50 percent cap, respectively) and eliminates the floor. The rule making also creates a new penalty waiver that applies to under payments by plans with good compliance histories if corrected promptly after notice from PBGC. PBGC will waive 80 percent of the penalty assessed for such a plan." (Pension Benefit Guaranty Corporation [PBGC])



Fiduciaries Need to Answer These Questions About Target Date Funds (PDF)
"[The DOL has] five main issues with the first generation of TDFs and how the industry uses them today.... [F]or each plan you work with, you must: [1] Establish an objective process for comparing, selecting and reviewing your TDFs. [2] Understand the fund's investments and how they change over time. [3] Determine if the expenses are appropriate for the services given. [4] Know if the TDFs chosen have the ability to get defensive in market failures. [5] Develop effective employee communications." (Beaumont Capital Management)



Not-for-Profit Hospitals and Health Care Providers Face Retirement Plan Class Actions
"[S]teps such plan sponsors may want to consider: [1] Adopting a robust governance structure ... [2] Adopting an investment policy statement ... [3] Setting up performance standards for the plan's service providers and regularly monitoring their performance.... [4] Conducting a confidential, comprehensive, and objective review ... of all current investment options available in the plans ... [5] Implementing a periodic competitive bidding process for record-keeping, administrative, investment consulting, plan participant education, and other commoditized plan services." (Greenberg Traurig)



The 401(k)/404(c) Plan Sponsor's Achilles Heel(s) -- Redux
"401(k)/404(c) plan sponsors need to realize that the primary reason that plans are being successfully sued involves a plan sponsor's fiduciary duty that will not be changed due to the DOL's announcement ... In far too many cases, liability is based primarily on a plan sponsor's failure to properly perform the personal investigation and evaluation of a plan's investment options." (The Prudent Investment Adviser Rules)



In the Ninth Circuit, a New Burden of Proof for Employers in Benefits Litigation
"For employers facing benefits litigation in the Ninth Circuit, the burden-shifting rule announced in this decision may be a game-changer. On remand, if the participant can make a prima facie case that he is entitled to benefits, the defendants will bear the burden of production regarding whether the participant worked sufficient hours for participating employers. This determination would involve records from several decades ago. As the dissenting judge notes, the plan administrator in this case could therefore be forced to provide benefits to the participant even though it did not abuse its discretion under established ERISA caselaw." [Estate of Barton v. ADT Security Serv. Pension Plan, No. 13-56379 (9th Cir. Apr. 21, 2016; rehearing en banc denied Sept. 20, 2016)] (Practical Law Company)



Text of Ninth Circuit Denial of Rehearing of Benefit Claim Decision Shifting Burden of Proof to Plan Sponsor (PDF)
Excerpt, from the dissenting judges: "A party may petition for rehearing en banc when 'the panel decision conflicts with a decision of the United States Supreme Court or of the court to which the petition is addressed ... and consideration by the full court is therefore necessary to secure and maintain uniformity of the court's decisions.' ... In this case, the majority ignores United States Supreme Court precedent and our own [ERISA] precedent ... In Metropolitan Life Insurance Co. v. Glenn, the Supreme Court applied Firestone's deferential standard, even where the plan administrator had a conflict of interest arising from her dual role of both evaluating and paying benefits claims.... The Court refused to create special burden-of-proof rules, or other special procedural or evidentiary rules, as an exception to Firestone deference." [Estate of Barton v. ADT Security Serv. Pension Plan, No. 13-56379 (9th Cir. rehearing en banc denied Sept. 20, 2016)] (U.S. Court of Appeals for the Ninth Circuit)



[Opinion] Holy Smokes! The 401(k) Form 5500 May Become Useful Soon
"When 401k market data is not readily accessible, it's more difficult for 401k fiduciaries to evaluate the reasonableness of plan fees, making excessive fees -- and fiduciary liability -- more likely. Further, any additional fees necessary to maintain a second set of 401k fee records do not offer value to 401k participants, they just lower returns. Fortunately, the government agencies responsible for the Form 5500 ... know the Form 5500 is a problem and want to do something about it." (Employee Fiduciary)



[Guidance Overview] IRS Overview of Methods for Correcting Common Hardship Distribution Errors
"If your plan terms require an employee to be suspended from contributing to the plan making the distribution and all other employer plans for at least six months after receiving a hardship distribution, then your plan must suspend salary deferrals. If your plan fails to do this, here are some correction options[.]" (Internal Revenue Service [IRS])



[Guidance Overview] IRS Overview of Rules for Hardship Distributions
"Although not required, a retirement plan may allow participants to receive hardship distributions. A distribution from a participant's elective deferral account can only be made if the distribution is both: [1] Due to an immediate and heavy financial need. [2] Limited to the amount necessary to satisfy that financial need." (Internal Revenue Service [IRS])



[Official Guidance] IRS Explanation, Worksheet (Alert Guidelines), and Deficiency Checksheet: Minimum Vesting Standards for DB Plans (PDF)
45 pages; revised April 2016. This single PDF document contains three items: Publication 4962, Form 5624, and Form 8401. Excerpt: "The purpose of the Worksheet Number 2A (Form 5624) and this explanation is to identify major problems in the area of plan vesting.... The worksheet applies only to plans to which Internal Revenue Code section 411 applies, except plans mentioned in section 411(e) (such as governmental plans) and plans that cover participants who are employed in maritime or seasonal industries." [Cycle A Submission Period, 2/1/2016 through 1/31/2017] (Internal Revenue Service [IRS])



[Official Guidance] IRS Explanation, Worksheet (Alert Guidelines), and Deficiency Checksheet: Miscellaneous Provisions (PDF)
25 pages; revised April 2016. This single PDF document includes Publication 6392, Form 5626, and Form 6043. Excerpt: "A plan which generally is more generous than the statutory minimum requirement for qualification in any given area will not fail to qualify merely because it fails to adhere to specific language found in the statute if it can be otherwise demonstrated that the minimum statutory requirement is met." [Cycle A Submission Period, 2/1/2016 through 1/31/2017] (Internal Revenue Service [IRS])



[Official Guidance] IRS Explanation, Worksheet (Alert Guidelines), and Deficiency Checksheet: Section 436 Limitations (PDF)
15 pages; revised April 2016. This single PDF document includes Publication 5139, Form 14582, and Form 14583. Excerpt: "The worksheet applies only to plans to which Internal Revenue Code section 436 applies, that is, single employer defined benefit plans (including multiple employer plans) that are subject to the minimum funding requirements of section 412. Thus, the worksheet does not apply to governmental plans and nonelecting church plans." [Cycle A Submission Period, 2/1/2016 through 1/31/2017] (Internal Revenue Service [IRS])



[Official Guidance] IRS Explanation, Worksheet (Alert Guidelines), and Deficiency Checksheet: Affiliated Service Groups (PDF)
6 pages; revised April 2016. This single PDF document includes Publication 7005, Form 8388, and Form 8400. Excerpt: "The general rule of section 414(m) is that employees of employers that are members of an affiliated service group are considered to be employed by a single employer for purposes of certain provisions of section 401(a), and sections 408(k), 408(p), 410, 411, 415 and 416." [Cycle A Submission Period, 2/1/2016 through 1/31/2017] (Internal Revenue Service [IRS])



[Official Guidance] IRS Explanation, Worksheet (Alert Guidelines), and Deficiency Checksheet: Top-Heavy Requirements (PDF)
10 pages; revised April 2016. This single PDF document contains three items: Publication 7002, Form 8385, and Form 8397. Excerpt: "Worksheet Number 7 (Form 8385) and this explanation are designed to aid the specialist in determining whether a plan is top-heavy as defined in Internal Revenue Code section 416 and, if so, whether the plan meets the special top-heavy requirements of that section." [Cycle A Submission Period, 2/1/2016 through 1/31/2017] (Internal Revenue Service [IRS])



[Official Guidance] IRS Explanation, Worksheet (Alert Guidelines), and Deficiency Checksheet: Limitations on Contributions and Benefits (PDF)
18 pages; revised April 2016. This single PDF document contains three items: Publication 7001, Form 6044, and Form 8384. Excerpt: "The purpose of Form 8384, Worksheet Number 6, is to assist in determining if a plan meets the major requirements of section 415. However, there may be section 415 issues not mentioned in the worksheet that could affect the plan's qualification." [Cycle A Submission Period, 2/1/2016 through 1/31/2017] (Internal Revenue Service [IRS])



[Official Guidance] IRS Explanation, Worksheet (Alert Guidelines), and Deficiency Checksheet: Safe Harbor Nondiscrimination Requirements for DC Plans (PDF)
6 pages; revised April 2016. This single PDF document contains three items: Publication 6393, Form 5627, and Form 6045. Excerpt: "The purpose of Form 5627, Worksheet Number 5 and this explanation is to determine whether a defined contribution plan satisfies the nondiscrimination safe harbor requirements of section 1.401(a)(4)-2(b) of the Regulations and associated requirements such as the nondiscriminatory compensation requirements of section 414(s)." [Cycle A Submission Period, 2/1/2016 through 1/31/2017] (Internal Revenue Service [IRS])



[Official Guidance] IRS Explanation, Worksheet (Alert Guidelines), and Deficiency Checksheet: Safe Harbor Nondiscrimination Requirements for DB Plans (PDF)
12 pages; revised April 2016. This single PDF document contains three items: Publication 4965, Form 9638, and Form 9640. Excerpt: "The purpose of Form 9638, Worksheet Number 5A, and this explanation is to determine whether a defined benefit plan satisfies the nondiscrimination safe harbor requirements of section 1.401(a)(4)-3(b)(3) of the Regulations and associated requirements such as the nondiscriminatory compensation requirements of section 414(s)." [Cycle A Submission Period, 2/1/2016 through 1/31/2017] (Internal Revenue Service [IRS])



[Official Guidance] IRS Explanation, Worksheet (Alert Guidelines), and Deficiency Checksheet: Permitted Disparity (PDF)
10 pages; revised April 2016. This single PDF document contains three items: Publication 4964, Form 9637, and Form 9639. Excerpt: "The purpose of Form 9639, Worksheet Number 5B, is to identify major problems relating to permitted disparity requirements of section 401(l) of the Code. This worksheet is to be used in reviewing plans that are intended to satisfy a design-based safe harbor and that provide for a disparity in the rate of employer contributions (in the case of a defined contribution plan) or employer-provided benefits (in the case of a defined benefit plan) that favors highly compensated employees." [Cycle A Submission Period, 2/1/2016 through 1/31/2017] (Internal Revenue Service [IRS])



[Official Guidance] IRS Explanation, Worksheet (Alert Guidelines), and Deficiency Checksheet: Joint and Survivor Determination of Qualification (PDF)
16 pages; revised April 2016. This single PDF document contains three items: Publication 6391, Form 5625, and Form 6042. Excerpt: "The purpose of Worksheet Number 3 (Form 5625) and this explanation is to identify major problems regarding joint and survivor annuity requirements under Internal Revenue Code sections 401(a)(11) and 417.... The joint and survivor annuity requirements of sections 401(a)(11) and 417 apply to plans to which section 411 applies, except those mentioned in section 411(e) (such as governmental plans)." (Internal Revenue Service [IRS])



[Official Guidance] IRS Explanation, Worksheet (Alert Guidelines), and Deficiency Checksheet: Minimum Vesting Standards for DC Plans (PDF)
19 pages; revised April 2016. This single PDF document contains three items: Publication 6389, Form 5623, and Form 6041. Excerpt: "The purpose of the Worksheet Number 2 (Form 5623) and this explanation is to identify major problems in the area of plan vesting.... The worksheet applies only to plans to which Internal Revenue Code section 411 applies, except plans mentioned in section 411(e) (such as governmental plans) and plans that cover participants who are employed in maritime or seasonal industries." [Cycle A Submission Period, 2/1/2016 through 1/31/2017] (Internal Revenue Service [IRS])



[Official Guidance] IRS Explanation, Worksheet (Alert Guidelines), and Deficiency Checksheet: Minimum Participation Standards (PDF)
11 pages; revised April 2016. This single PDF document contains three items: Publication 6388, Form 5622, and Form 6040. Excerpt: "The purpose of the Worksheet Number 1 (Form 5622) and this explanation is to identify any major problems an employee benefit plan might have in satisfying the minimum participation standards of Internal Revenue Code section 410(a).... The worksheet concerns plans to which Code section 410 applies, except those mentioned in section 410(c) (such as governmental plans) and plans that cover participants who are employed in maritime or seasonal industries." [Cycle A Submission Period, 2/1/2016 through 1/31/2017] (Internal Revenue Service [IRS])



[Official Guidance] DOL Announces Two-Month Extension for Public Comments on Proposed Form 5500 Revisions
"The [DOL], IRS and PBGC decided to extend the public comment period on the proposed forms revisions and regulatory amendments from the original Oct. 4, 2016 deadline to the new Dec. 5, 2016 deadline. The result will be a total of almost five months for interested persons to prepare and submit comments. This step is intended to facilitate robust and thoughtful public input on the proposals while respecting the need to keep the rulemaking aspects of the project moving forward and on pace with procurement and system development objectives to recompete the contract acquisition plan." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])



[Guidance Overview] 2016 Enrolled Actuaries Meeting 'Blue Book': Questions to the PBGC and Summary of Responses
Contains questions posed to PBGC staff by representatives of the Enrolled Actuaries Program Committee at discussions on March 3, 2016. Questions 1-6 were published on April 27. The report has been updated to include questions 7 through 23. (Enrolled Actuaries Program Committee and Pension Benefit Guaranty Corporation [PBGC])



Some 2017 Retirement Limits Likely to Climb
"With both the July and August rates in hand, there is little doubt that we will see some increases in the benefit limits for 2017 ... From time to time we have seen the CPI-U retreat slightly, but we would need to see a fairly significant decrease in the September figure to eliminate the projected increases shows below. More likely, the September CPI-U will advance slightly. But for any of these limits to jump to the next level, a 2.7% increase would be needed in just one month. That's not likely to happen." (Xerox HR Insights)



When Will PBGC Premiums Force a Change in Contributions?
"For many years, contribution policy was not a particularly complex issue. Few plan sponsors saw much incentive to pay more than the minimum required contribution; most simply paid what they were told to pay by the IRS.... Two things changed since then, though: funding relief and PBGC premiums.... PBGC premiums are, in effect, a tax on not making contributions, a tax that gets larger every year.... Not every plan sponsor is going to decide that 2017 is the year where the minimum contribution policy is finally unsustainable, but every sponsor should be asking the question." (Russell Investments)



[Guidance Overview] IRS Extends Temporary Nondiscrimination Relief for Closed DB Plans Through 2017 (PDF)
"If the conditions in [Notice 2016-57] are satisfied, defined benefit plan sponsors may continue to rely on its relief for plan years beginning before 2018 -- at which point IRS anticipates the changes to the nondiscrimination regulations will be finalized." (Xerox HR Services)



[Guidance Overview] Missed a 60-Day Rollover? Try Self-Certification
"Plan administrators and IRA custodians are not required to accept the self-certification and ... many of the larger institutions [may] continue to insist upon a private letter ruling.... [T]he IRS itself has cautioned that self-certification is not the equivalent of a waiver of the 60-day requirement." (Fox Rothschild LLP)



2016 Intersector Group Meeting with the IRS and Treasury: Excerpt from Notes on Form 5500 Schedule H/I Line 4L (PDF)
"These meeting notes are not official statements of the Treasury Department or the IRS and have not been reviewed by their representatives who attended the meeting. The notes merely reflect the Intersector Group's understanding of Treasury Department/IRS representatives' views expressed at the meeting ... Pending review of complete meeting notes, [the Intersector Group is] publishing this excerpt dealing with Form 5500 filings due in October for most calendar-year plans." (American Academy of Actuaries, Conference of Consulting Actuaries, Society of Actuaries, and ASPPA College of Pension Actuaries)



Lost Track of an Old 401(k)? PBGC Program May Help to Find Your Money
"Under the voluntary service, businesses closing down a 401(k) could transfer stranded accounts to the PBGC or send the agency information on the location of the stranded assets, to be added to a database. The agency estimates that about 24,000 defined-contribution plans are ended each year, mostly at small employers.... Currently, stranded 401(k) accounts are often transferred to private companies ... which set up IRAs, notify the account holders, and search for any who can't be found." (Bloomberg)



[Official Guidance] Text of PBGC Draft Forms and Instructions for Proposed Expanded Missing Participants Program
"PBGC [has issued] a proposed rule that would expand its existing Missing Participants Program to cover terminated 401(k) and other defined contribution plans and certain defined benefit plans that are not currently covered by the Program.... These forms are for information purposes only. PBGC-insured single-employer plans in the process of doing a standard termination should use the current forms to report missing participants." (Pension Benefit Guaranty Corporation [PBGC])



[Official Guidance] Text of PBGC FAQs on Proposed Expanded Missing Participants Program
"Why is PBGC proposing a missing participants regulation? ... Will terminating plans be required to use PBGC's Missing Participants Program? ... How will the program work for defined contribution plans that choose to use it? ... What are the benefits to plans and participants of PBGC's proposed defined contribution Missing Participants Program? ... Did PBGC coordinate with other federal agencies? ... What types of defined contribution plans could use the Missing Participants Program? ... Does PBGC propose any changes to the current program for single-employer PBGC-insured defined benefit plans? ... When will the proposed expanded Missing Participants Program be available? ... Under the proposal, will plans pay a fee to participate in the Missing Participants Program? Where can I find more information about this proposal?" (Pension Benefit Guaranty Corporation [PBGC])



[Official Guidance] Text of PBGC Proposed Regs: Expanded Missing Participants Program to Cover Multiemployer Plans, Most DC Plans, and Certain Other DB Plans
108 pages. "The [PBGC] administers a program to hold retirement benefits for missing participants and beneficiaries in terminated retirement plans and to help those participants and beneficiaries find and receive the benefits being held for them. The program is currently limited to single-employer defined benefit pension plans covered by the pension insurance system under title IV of [ERISA]. PBGC proposes to make changes to its existing program and, as authorized by the Pension Protection Act of 2006, to establish similar programs for multiemployer plans covered by title IV, certain defined benefit plans that are not covered by title IV, and most defined contribution plans. PBGC seeks public comment on its proposal." (Pension Benefit Guaranty Corporation [PBGC])



[Official Guidance] Text of IRS Notice 2016-57: Temporary Nondiscrimination Relief for Closed DB Plans Extended through 2017 (PDF)
"Many detailed and thoughtful comments have been submitted on the proposed regulations, including oral comments made at the public hearing held on May 19, 2016. The [IRS] and the Treasury Department are taking the recommendations received from the public into account in finalizing the regulations. It is anticipated that the final regulations will not be published in time for plan sponsors to make plan design decisions based on the final regulations before expiration of the relief provided under Notice 2014-5 (as extended by Notice 2015-28). Accordingly, the IRS and the Treasury Department have determined that it is appropriate to extend the relief provided under Notice 2014-5 for an additional year. (Internal Revenue Service [IRS])



Employee Benefit Issues in Mergers and Acquisitions (PDF)
"This article looks primarily at M&As involving ... 401(k) plans ... [and] explores other types of 'qualified' plans, health care plans, and 'nonqualified' deferred compensation plans.... [It] is critical that the buyer and seller engage in due diligence to understand the plans that exist and discover any problems, review and negotiate the terms of the purchase agreement, and take appropriate pre- and post-close actions to avoid creating problems and to facilitate any future plan mergers." (The ERISA Law Group, via The Advocate)



[Official Guidance] Text of IRS Ann. 2016-32: Request for Comments on Facilitating Compliance with Qualified Plan Document Requirements (PDF)
"This announcement requests comments on ways in which the Department of the Treasury and the [IRS] can improve compliance with plan qualification requirements by making it easier for plan sponsors to satisfy requirements for qualified plan documents, particularly in light of the changes to the determination letter program described in Rev. Proc. 2016-37 ... Treasury and the IRS request comments on the following: [1] Incorporation by reference ... [2] Circumstances under which plan provisions may not be required.... [3] Conversion to pre-approved plans.... [4] Additional ways to facilitate compliance.... Comments may be submitted in writing on or before December 15, 2016." (Internal Revenue Service [IRS])



[Official Guidance] Text of IRS Notice 2016-54: Update for Weighted Average Interest Rates, Yield Curves and Segment Rates, September 2016 (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. In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under Section 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under Section 431(c)(6)(E)(ii)(I)." (Internal Revenue Service [IRS])



Text of Sixth Circuit Opinion Affirming Summary Judgment for Employee Under Equitable Estoppel, Fiduciary Breach and Anti-Cutback Rule (PDF)
19 pages. "After working for ten years at a Bridgestone plant in Canada, Andre Deschamps transferred to a Bridgestone facility in the United States.... [U]pon receiving assurances from members of Bridgestone's management team that he would keep his ten years of pension credit, Deschamps accepted the position. For over a decade, Deschamps received various written materials confirming that his date of service for pension purposes would be August 8, 1983.... In 2010, Deschamps discovered that Bridgestone had changed his service date to August 1, 1993, the date he began working at the American plant." [Deschamps v. Bridgestone Americas, Inc. Salaried Employees Pension Plan, No. 15-6112 (6th Cir. Sept. 12, 2016)] (United States Court of Appeal for the Sixth District)