2014 Year-End Qualified Retirement Plan Checklist
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In This Issue
Compliance and Regulatory Related 2014 Year-End Qualified Retirement Plan Checklist Summary: It's time to ensure year-end qualified plan deadlines are satisfied. Here is a checklist designed to help employers with this process. This checklist addresses both year-end deadlines and January 2015 deadlines which sponsors of qualified retirement plans may wish to begin preparing for now. Source: Benefitsbryancave.com ERISA Disclosure or Reporting Violations -- Potential for Criminal Liability Summary: ERISA requires plan administrators to provide various documents to plan participants, including: summary plan description, summary of material modification, summary annual report and periodic pension benefit statements. In addition, plan administrators must file annual reports with the DOL. Violating these disclosure and reporting obligations, or the obligation to retain records necessary to verify information on annual reports, could lead to criminal liability. Source: Groom.com New IRS Program for Delinquent 5500 Filers for Plans Without Employees Summary: The IRS recently announced a temporary program to provide delinquent-filer relief for One-Participant plans. The program will run through June 2, 2015, but may be made permanent after that date. No penalty or other fee must be paid for a report filed under the program. The IRS did indicate that if the program is made permanent a filing fee may be required. Source: Bcgbenefits.com IRS Simplifies Procedures for Favorable Tax Treatment on Canadian Retirement Plans Summary: The Internal Revenue Service just made it easier for taxpayers who hold interests in either of two popular Canadian retirement plans to get favorable U.S. tax treatment and took additional steps to simplify procedures for U.S. taxpayers with these plans. Source: 401khelpcenter.com Consequences of Plan Disqualification Summary: When a retirement plan is disqualified, the plan's trust loses its tax-exempt status and becomes a nonexempt trust. Plan disqualification has sever affects three groups: employees, employer, and the plan's trust. Here is an overview. Source: Ekonbenefits.com Summary: The PPA restatement process is underway. The Pension Protection Act of 2006 restatement process for pre-approved defined contribution, 401(a) plans, which began May 1, 2014, will run until April 30, 2016. This article addresses frequently asked questions about the restatement process and suggests some broad considerations to bear in mind as plans are restated. Source: Ftwilliam.com
403(b) Plans Another Strategy for Increasing Participation in the 403(b) Plan Summary: Are there recommendations for increasing participation in 403(b) plans? One is adding the Roth 403(b) option to the plan which will appeal to a wider audience of employees. As an example, we know that younger employees, currently in low income tax brackets, may not be particularly interested in income tax deferral. But those same employees, will be motivated with the opportunity to save after-tax dollars in the Roth option, in order to look forward to a significant number of years in which growth or earnings can be accumulated, and ultimately, distributed tax free. Source: Ntsa-net.org
Fiduciary and Plan Governance Material Employer's Fiduciary Liability in Investing Profit Sharing Contributions Summary: A prospective client has a 401k plan. The investment of the plan's assets is directed by the participants with the exception of the employer profit sharing contribution. That is invested at the discretion of the employer. Article answers the question, "What is the employer's potential fiduciary liability with regard to the profit sharing source?" Source: Tagdata.com
Insight: Studies, Research and White Papers Millennials Worry About Finances, but Don't Know Who to Trust Summary: According to Fidelity Investments' first-ever Millennial Money Study, far too many Millennials (aka Gen Y, born 1980-1989) struggle to answer that question. When asked who they trust most for information on money matters, one third (33 percent) of Gen Y-ers identify their parents as the top choice, but almost one in four (23 percent) indicate they trust "no one" when it comes to advice about money, making it the second most common response. Source: 401khelpcenter.com
Items of Special Interest to Service Providers Protection From Creditors for Retirement Plan Assets Summary: Clients and their advisers are rightfully concerned about insulating retirement plan assets from potential creditor claims both inside and outside a federal bankruptcy action. This article will greatly help CPAs and tax lawyers come to grips with the overlapping and, seemingly, conflicting laws on the issue. Source: Aicpa.org SEC Commissioner Questions Need for Expanded Fiduciary Rule Summary: SEC Commissioner Michael Piwowar has expressed doubts about the need to expand the "standard of care" fiduciary obligation to retail brokers. "It is not clear that changes in the regulations applicable to broker-dealers and investment advisers are necessary, including the adoption of a uniform fiduciary duty," said Piwowar. Source: Benefitspro.com Advisor Share of DC Assets Growing Summary: Retirement plan advisors controlled 28 percent of the defined contribution market at the end of 2013, according to Cerulli Associates. That figure is expected to grow if only because plan sponsors facing greater regulatory oversight are more frequently turning to advisors to manage plans. Source: Benefitspro.com
Issue of Lifetime Income Helping Participants Manage Longevity Risk: Proceed With Caution Summary: The DOL and IRS have published final rules for a certain type of annuity, called a qualifying longevity annuity contract or QLAC. These rules do not solve all the problems or answer all the questions related to QLACs. Income adequacy, including maximizing retirement income and managing it during retirement, is a major challenge for DC plan participants that requires a cohesive solution involving participants, employers and government. These regulations may be a first step along the road to helping participants manage the risk of outliving their retirement income, but plan sponsors should proceed with caution. Source: Sibson.com
Court, Legal, Legislative and Washington DC Judge Rejects Citigroup Bid to Dismiss 401k Fee Case Summary: Nearly seven years after their lawsuit was filed, the plaintiffs in a "self-dealing" case against Citigroup will be allowed to move ahead with their claims. On Sept. 30, U.S. District Judge Sidney Stein denied Citigroup's motion for summary judgment, which would have thrown the case out of court based on Citigroup's assertion that the statute of limitations had passed. Source: Benefitspro.com Supreme Court to Hear Imprudent 401k Fees Case Summary: The U.S. Supreme Court on Oct. 2 agreed to hear a case that, if overruled, could make 401k fee lawsuits by participants in employer-sponsored defined contribution retirement plans much easier. Source: Thompson.com
Marketplace News Walter Ziffer Joins Cafaro Greenleaf's D.C. Office OneAmerica Opens Honolulu Retirement Services Office Lincoln Financial Announces In-Plan Guarantee Income Option SageView Adds New Associates to Midwest Team Retirement Solution Group and RPC Announce Merger Redhawk Wealth Advisors Launches Fiduciaryk James Napoli Joins D.C. Office of Seyfarth Shaw
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