This summer, for the first time in more than 20 years, Hawaii was hit by a named tropical system. ays later, a second churned offshore. Hurricane Arthur splashed through North Carolina’s Outer Banks just before July 4. And the height of the Atlantic hurricane season is about to arrive. This portends the possibility of significant property losses, business disruption and the need for hardship distributions from 401(k)s.
The Department of Labor’s Inspector General is looking at how the department’s Employee Benefits Security Administration monitors plans that claim the “small plan” exemption from the annual independent audit requirement that applies under ERISA, the ASPPA Government Affairs Committee has learned.
With the ERISA fiduciary community still absorbing the impact of the Supreme Court’s rejection of the presumption of prudence standard for company stock in retirement plans, a federal appellate court has introduced a new and potentially complicating aspect to consider.
The U.S. Department of Labor has published a request for information on the use of brokerage windows, self-directed brokerage accounts and “similar features” in 401(k)-type plans.
How can the fiduciaries of terminated DC plans fulfill their obligations under ERISA to locate missing participants and properly distribute the participants’ account balances? That’s a question the DOL answered in a Field Assistance Bulletin released Aug. 14.
The SEC on Aug. 11 announced securities fraud charges against the state of Kansas, claiming that the state failed to disclose that the state’s pension system was significantly underfunded, and that the unfunded pension liability created a repayment risk for investors in those bonds.
Fidelity has changed the way it manages its 401(k) plan. That took some convincing — it had been sued by 29 current and former employees on behalf of 50,000 of their peers over conflicts of interest in its plan.
The Joint Committee on Taxation (JCT), the congressional scorekeeper of tax legislation, on Aug. 5 issued its latest estimates of the increasing costs of the tax incentives for retirement savings. The numbers are eye-popping.
ASPPA and ACOPA, in an Aug. 13 letter to Robert Choi, Director, Employee Plans at the IRS, have requested guidance regarding the application of the funding stabilization provisions in section 2003 of the Highway and Transportation Funding Act of 2014 (HTFA) to plan years beginning in 2013 and 2014.
The Wells Fargo/Gallup Investor and Retirement Optimism Index slipped eight points in the second quarter driven largely by a 17-point decline in optimism among retired investors.
During the last week of July, the Bipartisan Policy Center hosted a panel on retirement security — and shared some interesting perspectives on the state of America’s retirement readiness. Pension professionals should understand these perspectives, as they could well find their way into future retirement policy proposals.
The Government Accountability Office (GAO) has identified companies that offer advances in exchange for receiving all or part of their pension funds and questionable practices that may put plan participants at risk. “Pension Advance Transactions: Questionable Business Practices Identified,” a report the GAO prepared for the Senate Committee on Health, Education, Labor and Pensions, identified questionable elements of these transactions.
Maryland Gov. Martin O’Malley (D) has named the members of a panel charged with finding “…ways to better secure retirement savings for private-sector employees in Maryland.” Established by executive order in May and chaired by former Lt. Gov. Kathleen Kennedy Townsend (D), the task force brings together representatives from key sectors across the state to find ways to better secure retirement savings for private-sector employees in Maryland.
The Senate capitulated to the House on a bill to replenish the dwindling federal Highway Trust Fund by a vote of 81-13 on the evening of July 31. The final version of the bill that will now go to President Obama’s desk will include the MAP-21 pension smoothing extension initially rejected by the Senate on July 29.
The U.S. Senate passed legislation July 29 to fund the nation’s Highway Trust Fund — legislation that does not include a pension smoothing provision. The vote tally on the $8.1 billion bill was 79-18.
Is the Form 5500 worth filling out and filing in the first place? Not everyone is convinced, reports Benefitspro. But file they must, and the Government Accountability Office (GAO) has come to the rescue, offering suggestions in its recent report, “Private Pensions: Targeted Revisions Could Improve Usefulness of Form 5500 Information” regarding how the form could be made more useful.
Plan participants take money out of their 401(k)s prematurely for different reasons — such as plan loans and hardship withdrawals. But the biggest driver of leakage, according to the Employee Benefit Research Institute (EBRI), is cashing out when changing jobs.
Recently, in the review process for determination letter applications, the IRS has taken issue with “412(d)(2)” plan amendments. Some plan sponsors have been told by IRS reviewers that the amendments were not permissible if adopted after the close of the plan year, and that a closing agreement would be necessary to avoid disqualification. ASPPA and ACOPA sent a letter to IRS on June 9, 2014, expressing disagreement with the position being taken as contrary to the clear statutory language of IRC Section 412(d)(2).
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