2013 Year-End Benefit Plan Compliance Update and Reminders
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Compliance and Regulatory Related 2013 Year-End Benefit Plan Compliance Update and Reminders Summary: As 2013 draws to a close, there is no shortage of benefit plan administrative challenges with which employers must contend. While the Patient Protection and Affordable Care Act of 2010 remains very much at the forefront of these challenges, retirement plan and deferred compensation plan administration also require attention. This is a non-exhaustive summary of key legal compliance matters to keep in mind while closing out this year and planning for next year. Source: Employeebenefitsupdate.com 2013 End of Year Plan Sponsor To-Do List for Qualified Retirement Plans Summary: This plan sponsor to-do list focuses on year-end qualified plan issues. It is broken into five categories: All qualified plans, 401k plans, defined contribution plans other than 401k's, defined benefit plans, and 403(b) plans. Source: Swlaw.com 2014 Planning for ERISA Single-Employer Defined Contribution Plan Operations Summary: The calendar provided in this article will help you set up your own schedule of activities to address as the year progresses so that you do not miss important deadlines for your qualified plans. As you evaluate the various tasks, you can confirm suitable deadlines with your vendors for getting them done. Source: Buckconsultants.com Impact of Same-Gender Marriage on Beneficiary Designations Summary: Because of the impact of the decision on beneficiary designations, we recommend that practitioners notify participants who are affected by the Supreme Court decision to review their beneficiary designations and make the appropriate changes. Source: Relius.net Video: What Is a Limited Scope Financial Statement Audit? Summary: Talk about the "limited scope" audit disclaimer. According to DOL statistics, approximately 70% of all plan financial statements filed with the DOL have limited scope auditor opinions. Generally speaking, for a limited scope engagement, the Plan administrator retains the auditor to perform the audit engagement, without performing audit procedures on investments and investment activity. Source: Erisasunscreen.com Required Puerto Rico Qualified Retirement Plan Amendments and Determination Letter Filing Deadline Summary: This article provides a summary of required Puerto Rico qualified retirement plan amendments that must be adopted generally by April 15, 2014, under the Puerto Rico Internal Revenue Code of 2011 and an overview of the requirements for applying for a determination letter under the PR Code. Source: Groom.com Roth Conversion Reporting on Form 1099-R Summary: There is confusion about reporting the existing variety of Roth conversion transactions on Form 1099-R. This article shows some fact sets and examples of Form 1099-R reporting. Source: Mhco.com In-Plan Rollovers to Designated Roth Accounts in Retirement Plans Summary: This notice provides guidance on rollovers within a retirement plan to designated Roth accounts in the same plan. The guidance relates to the expansion of these rollovers under new section 402A(c)(4)(E) of the Internal Revenue Code. This notice also provides guidance that applies to all in-plan Roth rollovers described in section 402A(c)(4). Source: Irs.gov
Fiduciary Related Material and Insight Best Practices for ERISA Plan Revenue-Sharing Account Arrangements Summary: The DOL has closely examined ERISA plan revenue-sharing account arrangements. In light of the DOL's continued focus on these activities, if your plan is contemplating or renewing such an arrangement, consider implementing these four best practices. Source: Winston.com Where Does Fiduciary Responsibility End? One Plan Committee Member's Thoughtful Perspective Summary: How can an employer truly be considered to be acting in the best interests of plan participants and beneficiaries in terminating a defined benefit plan or in freezing benefits under such a plan? Source: Fiduciaryplangovernance.com Six Criteria for Evaluating Your 401k Plan Investment Adviser Summary: Most employer plan sponsors use an investment adviser to help them with their 401k plans. This is a smart decision since most advisers are able to save plan sponsors at least as much as they charge in fees each year. How can you tell if you are working with a good investment adviser? Source: Benefitnews.com Offering Self-Directed Brokerage Accounts in a 401k Plan is a Bad Bet Summary: 401k plans with self-directed brokerage accounts that allows participants to choose almost any type of investment is another form of gambling and a plan sponsor may unknowingly expose themselves to liability by offering this feature. This article is about the hidden dangers of 401k plans in offering self-directed brokerage accounts to plan participants. Source: Jdsupra.com
Insights: Studies, Research and White Papers Study Finds Typical Households of Color Have No Retirement Savings Summary: A new report calculates the severity of the U.S. retirement security racial divide. The analysis finds that every racial group faces significant risks, but people of color face particularly severe challenges in preparing for retirement. Americans of color are significantly less likely than whites to have an employer-sponsored retirement plan or an individual retirement account (IRA), which substantially drives down the level of retirement savings. Source: 401khelpcenter.com Retirement Perception Differs From Reality Summary: A new report calculates the severity of the U.S. retirement security racial divide. The analysis finds that every racial group faces significant risks, but people of color face particularly severe challenges in preparing for retirement. Americans of color are significantly less likely than whites to have an employer-sponsored retirement plan or an individual retirement account (IRA), which substantially drives down the level of retirement savings. Source: 401khelpcenter.com 80% Salary Replacement Rule: Origins and Exceptions for 401k Retirement Savers to Consider Summary: Nearly every retirement adviser, financial planner and tax consultant faithfully follows the rule. Some may question it, only to return to it as a convenient proxy. What is it? Where is it used? How has it been justified? And why could it be the single most critical data element that will stand between a comfortable retirement and working longer? We're talking about the "80% Salary Replacement Rule." Source: Fiduciarynews.com Employers Playing Increased Role Helping Americans Navigate to and Through Retirement Summary: During the last two years, the challenging and ever-changing economic, regulatory and public policy environment has caused HR professionals and other corporate benefit plan leaders to review their workplace benefits -- be they retirement, health care or related resources offered to employees. Due in part to increased complexity in these areas, the majority (73 percent) of HR professionals report having to develop greater expertise across various retirement and health care-related topics in order to effectively do their jobs. Source: 401khelpcenter.com After One Year Are Fee Disclosures Working? Summary: In 2012, the Department of Labor issued final regulations requiring the disclosure of fee and expense information to defined contribution plan participants and sponsors. The intent was to provide greater transparency and awareness to the costs of providing and participating in an employer-sponsored retirement plan. Across the retirement industry there is consensus that fee disclosure is important and government regulation was the most effective means of delivering widespread transparency. So where are we a year later? Source: Limra.com
Items of Special Interest to Advisors Fiduciary Insurance for Advisors Summary: In this era of fee disclosures, complex financial products and complex financial institutions, there are many ways an advisor can get drawn into litigation. ERISA fiduciary insurance doesn't just protect you; it also protects your clients in case something goes wrong. This article provides some key tips on what to look for. Source: Groom.com Small 401k Market Ripe for Advisor Picking Summary: Financial advisors have an opportunity to enter the 401k market through small businesses, according to a financial services executive. "There is a huge opportunity for financial professionals to help at this end of the market and business owners need their help," says Steve Davis, national sales manager for Guardian Retirement Solutions. Source: Fa-mag.com
Court, Legal, Legislative and Washington DC 'Presumption of Prudence' in ERISA Cases at Risk? Summary: The U.S. Supreme Court must soon decide whether to grant Fifth Third Bancorp's petition for writ of certiorari, and review the Sixth Circuit's 2012 decision in Dudenhoefer v. Fifth Third Bancorp. The petition presents two significant issues in the realm of ERISA litigation: (1) whether the "presumption of prudence" regarding employer stock is a proper legal standard for evaluating breach of fiduciary duty claims; and (2) whether SEC filings become actionable ERISA fiduciary communications merely by incorporating them by reference into plan documents. Source: Alston.com High Court Ruling on Stock-Drop Could Chase Company Shares Out of 401k's Summary: A brief from the U.S. Solicitor General recommending that the U.S. Supreme Court hear a "stock-drop" class-action case could make it the most important ERISA litigation of the High Court's current term. Employee benefits attorneys watching the case's progress say a High Court decision could deter employers from offering employer stock as a 401k plan investment option. Source: Thompson.com Summary: ERISA defendants have long maintained that there is no statutory or constitutional right to a jury trial in ERISA cases. Almost always, the courts have agreed, citing ERISA's trust law origins and the Seventh Amendment's application only to suits seeking legal, not equitable, relief. The reasoning goes that because under ERISA you may obtain only relief that was traditionally available in courts of equity, the right to a jury trial does not exist. Source: Erisa-employeebenefitslitigationblog.com
Marketplace News Lincoln Financial Adds Three to Retirement Plan Sales BrightScope Eliminates Fees, Updates Advisor Pages Platform SimPlus Savings DC Platform Introduced by Aon Hewitt Great-West Launches Interactive Online Retirement Savings Tool ABG-Illinois Launches Plan Contribution Limits App DCIIA Executive Committee Elects New Members Bloomberg BNA Publishes 2013 Cumulative Supplement to ERISA Litigation Transamerica Expanses Pension Sales and Distribution Team
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