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Benefits in the News

Older News | December 18, 2014

arrow icon Treasury Finalizes Rules for New Retirement Savings Account: The myRA

"[T]he new regulations state that the myRA is going to be treated as a Roth IRA. This means all of the interest growth inside the myRA on the new electronic savings bond will come out tax free if certain holding period and trigger events are satisfied. By treating the myRA as a Roth IRA, the Treasury Department also helped exclude myRA account balances from required minimum distribution requirements after age 70-1/2. This could be a big benefit for some individuals looking for tax and investment class diversification."
arrow icon Upcoming Health and Welfare Plan Requirements Checklist for Employers
McDermott Will & Emery
12/17/2014 [Guidance Overview]

"As 2014 draws to a close, employers should turn their attention to several upcoming compliance obligations for the health and welfare benefit plans they sponsor. [In this article] is a list of upcoming health and welfare compliance initiatives that require action by employers, including preparation for upcoming fees and penalties under the [ACA], filing of required forms and distribution of relevant notices."
arrow icon Employers Should Prepare Now for Big Changes Coming to Multiemployer Pension Plans
Polsinelli PC
12/17/2014 [Guidance Overview]

"[E]mployers who have collective bargaining agreements that require contributions to multiemployer pension funds should begin analyzing the potential impact now ... Review the current funded status of each multiemployer pension fund. Request an updated withdrawal liability estimate from each multiemployer pension fund and all supporting documentation ... Consider making inquiries through the fund's employer trustees as to whether the fund will implement any of the changes under the Act.... Review any public statements that union representatives have made regarding the changes under the Act, whether in support of or against such changes.... Re-evaluate the company's risks of continuing to participate in the fund and adjust collective bargaining strategy accordingly."
arrow icon Big Business Promoted Private Pensions to Crush Unions
Bloomberg View
12/17/2014 [Opinion]

"[T]he long, tangled history of U.S. private pensions is equally a story of how business sought to manage labor, conserve profits and block the expansion of a modern welfare state. Research by historians such as Jennifer Klein and Steven Sass helps explain why the U.S. is almost unique in its reliance on private, company-sponsored pensions instead of comprehensive, government-sponsored benefits."
arrow icon IRS Releases Inflation-Adjusted Limits for 2015
Towers Watson
12/17/2014 [Guidance Overview]

"[Rev. Proc. 2014-61 includes] 2015 inflation-adjusted limits for certain benefit-related tax provisions. [This chart] shows the limits that apply to health flexible spending arrangements, qualified transportation fringe benefit plans, adoption assistance programs, qualified long-term care premiums and qualified retirement plans. The chart also identifies the Social Security taxable wage base, personal exemption and standard deduction amounts for 2015."
arrow icon Text of D.C. Court of Appeals Opinion Regarding Liability of 'Related Person' for Premiums to United Mine Workers Health Plan After Employer Ceased Operations and Contributions (PDF)
U.S. Court of Appeals for the District of Columbia Circuit

17 pages. "The Coal Act requires coal operators and 'any related person' to pay for miners' health care in monthly installments. 26 U.S.C. Section 9712(d)(3), (4); see 29 U.S.C. Section 1145. A cause of action to collect such installment payments separately accrues with each missed payment.... Like the MPPAA installment liability, ... Coal Act installment liability separately accrues with each missed payment.... Bibeau maintains that it owes interest only on delinquent contributions... The remedial provision, 29 U.S.C. Section 1132(g)(2), does not distinguish between unpaid contributions and interest ... Accepting Bibeau's approach would mean that if employers were not 'delinquent' for purposes of interest until they received notice from the Plan, then they would also not be 'delinquent' for purposes of unpaid contributions." [Holland v. Bibeau Construction Co., No. 13-7093 (D.C. Cir. Dec. 16, 2014)]
arrow icon Being Proactive v. Reactive: ACA's Prohibition on Discrimination in Group Health Insurance
Benefits Bryan Cave
12/17/2014 [Guidance Overview]

"[T]he IRS has informally indicated that an extension of eligibility to former employees who are [highly compensated individuals (HCIs)] would raise an eligibility discrimination issue, and all former employees should be considered in the test....If the IRS does not change its position when it issues new guidance, ... all former employees will need to be aggregated and tested in a group distinct from active employees. Thus, if the group of former employees extended continued coverage benefits all or mostly HCIs, it will not pass the eligibility test....[If] an insured plan is determined to be discriminatory, the penalty for the employer would be much more severe than the penalty for a discriminatory self-funded plan."
arrow icon There Are No 'Economies of Scale' in 401(k) Plans -- Unless You Are Trying to Beat the Market
Employee Fiduciary
12/17/2014 [Opinion]

"Here is my problem with these 'magic' MEPs. At what level do we achieve 'scale?' And what will be the investment vehicle -- mutual funds? If mutual funds are used, how much will small plan sponsors save? Very few funds have significant minimum purchase requirements, so the savings would be limited. True savings would come from aggregating about $1 billion and hiring institutional investment managers directly -- just like the large pension and endowment plans do now."
arrow icon ACA Cadillac Tax: Essential Issue for 2015 Labor Contract Negotiations
Clifton Budd & DeMaria, LLP

"The Cadillac tax has been recently described as more of a 'Camry' or 'Chevy' tax.... [E]ven ACA-silver tier plans, depending on geographic location, could be subject to the excise tax soon after 2018 due to the tax's thresholds being tied to the general CPI-U, rather than the faster increasing index of health care costs. According to a recent Towers Watson survey, 54% of employer plans will trigger the excise tax by 2020 if current health care benefit strategies remain unchanged.... Employers who will be negotiating new three year contracts in 2015 do not have the luxury of deferring consideration of this issue as the Cadillac tax will begin before the expiration date on such contracts."
arrow icon Tax Extenders Reinstated Temporarily
Michael Kitces in Nerd's Eye View
12/17/2014 [Guidance Overview]

"In its final form, the legislation 'patches' the tax extenders for one year, retroactively reinstating a wide range of provisions that technically lapsed at the end of 2013, to now be available for the current 2014 tax year. This includes the popular rule allowed those over age 70-1/2 to make a qualified charitable distribution (QCD) from an IRA, satisfying the current year's required minimum distributions while simultaneously completing a charitable bequest and excluding the IRA distribution from income entirely for tax purposes, with just enough time left to complete a QCD before year end."
arrow icon Estimating Stock Compensation Volatility

"[This study] found that stock compensation volatility estimates are predicted just as well by using historical volatility as by blending historical with implied volatility. Further, longer-term windows of up to 15 years were shown to outperform the comparable-window forecasts typically in use."
arrow icon American Airlines Settlements to Be Eligible for IRA Rollover

"Both the U.S. House and Senate have passed a bill (H.R. 2591) amending the 2012 FAA Modernization and Reform Act to extend an expired deadline for bankrupt airline employees and former employees who received retirement plan settlements to roll over these settlement amounts to IRAs."
arrow icon More Details on myRA Program; Comerica Identified as Custodian

"The Treasury Department's myRA terms and conditions document, titled 'Master Terms of myRA Custodial Account,' indicates that Comerica Bank is the custodian for myRAs. Earlier this year, the Treasury Department issued a request for proposal seeking a financial partner to administer these custodial accounts. Though not publicly announced, Comerica is identified as providing this service."
arrow icon Teacher Retirement Plans: Case Studies in Washington and Ohio Indicate Value of Defined Benefit Plans (PDF)
National Institute on Retirement Security [NIRS]

"Evidence from these two states suggests that teachers are unlikely to choose an alternative retirement plan design unless the state undertakes significant risk in the individual account portion of the plan. Furthermore, because research suggests that offering a choice could have adverse effects on teacher retention and quality, policymakers should proceed with caution before implementing a choice between a DB pension and a combined DB-DC plan."
arrow icon Text of CMS Bulletin #15: Guidance for Issuers on Special Enrollment Periods Related to the Passive Re-Enrollment Process During the 2015 Open Enrollment Period (PDF)
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]
12/17/2014 [Official Guidance]

"CMS will provide the following Special Enrollment Periods (SEPs) for a small number of Qualified Individuals affected by the passive re-enrollment process. These SEPs will allow certain Qualified Individuals to enroll in a Qualified Health Plan through the Federally-facilitated Marketplace with a January 1, 2015 coverage effective date. The SEPs [listed in a table in this document] are specifically for Qualified Individuals who may otherwise experience a gap in coverage as a result of the passive re-enrollment process ... CMS is providing Qualified Individuals 60 days to select a plan from the later of the following two dates: [1] January 1, 2015; or [2] Five days after the date provided on the enrollment confirmation message."
arrow icon ISS Modifies Elements of Its CEO Pay-for-Performance Test
Meridian Compensation Partners, LLC

"The first modification alters ISS scoring methodology under its quantitative pay-for-performance tests that may result in slightly fewer U.S. companies showing a pay misalignment. The second modification revises ISS's peer group selection methodology for certain energy companies."
arrow icon Tick, Tock: The Time for Year-End Financial and Tax Planning with Equity Comp Is Almost Over

"The clock is running out for year-end decisions that may have a big impact on your equity awards, including restricted stock units or stock options. [This article provides] an introduction to the major issues arising with equity compensation at the close of the year."
arrow icon 2014 Pension Plan Report Card, and Planning Ahead for 2015
P-Solve LLC

"With lower rates and decent asset returns, most plan sponsors will be starting off the New Year worse off then they started 2014.... 2015 will not be as advantageous for offering lump sums; however, sponsors that are looking to systematically de-risk their plans that did not do a cashout window in 2014 may still want to look at offering one in 2015.... Plan sponsors will want to have a game plan for identifying what the 'right' contribution amount is for 2015 as it may be different from the minimum required contributions once all factors are taken into account."
arrow icon De Facto Private Right of Action Under HIPAA: Is Ohio Next?
Thompson Hine

"HIPAA does not provide a private cause of action to individuals affected by a health care privacy breach. This means that an individual whose PHI has been used or disclosed by a health care provider in violation of HIPAA may not bring a civil claim against the health care provider under HIPAA. Moreover, HIPAA specifically preempts any contrary provision of state law ... Recent decisions by state courts, however, have held that HIPAA is the standard industry practice for health care providers and may form the basis for state law negligence claims involving disclosure of patient medical records."
arrow icon Supreme Court Invites Solicitor General Brief on Petition for Certiorari in Vermont ERISA Preemption Case

"Issue: Whether the Second Circuit -- in a two-to-one panel decision that disregarded the considered opinion advanced by the United States as amicus -- erred in holding that [ERISA] preempts Vermont's health care database law as applied to the third-party administrator for a self-funded ERISA plan." [Gobeille v. Liberty Mutual Ins. Co., No. 14-181 (2d Cir. Feb. 4, 2014; cert. pet. filed Aug. 13, 2014)]
arrow icon Text of Superseding Ninth Circuit Opinion: District Court Directed to Consider Surcharge as Equitable Remedy Where Benefits Paid in Error (PDF)
U.S. Court of Appeals for the Ninth Circuit

37 pages. "The opinion filed on June 6, 2014 ... is withdrawn. [This] superseding opinion will be filed concurrently with this order.... [B]ecause the district court made its ruling prior to the Supreme Court's decision in CIGNA Corp. v. Amara, the district court did not consider the availability of the 'monetary remedy against a trustee, sometimes called a 'surcharge,' which the Court held may be 'appropriate equitable relief' for purposes of Section 1132(a)(3). Accordingly, we vacate the district court's ruling that Gabriel is not entitled to any form of 'appropriate equitable relief' and remand for the district court to reconsider the availability of surcharge in this case, and, if available, whether Gabriel has adequately alleged a remediable wrong." [Gabriel v. Alaska Electrical Pension Fund, No. 12-35458 (9th Cir. Dec. 16, 2014)]
arrow icon Findings from the SHRM/EBRI 2014 Health Benefits Survey (PDF)
Employee Benefit Research Institute [EBRI]

"[O]nly 1 percent of plan sponsors are planning to eliminate health benefits in 2015.... A relatively large number of employers continue to introduce wellness rewards and penalties ... Few employers are planning to make changes to eligibility for spousal coverage and part-time worker benefits, and few are moving toward tiered networks, private health insurance exchanges, value-based insurance design, and reference pricing."
arrow icon Multiemployer Pension Plan Reforms: Lessons from the Lame-Duck Session (PDF)
Earl Pomeroy, via American Benefits Council
12/17/2014 [Opinion]

"While Solutions Not Bailouts drew loud opposition, no alternatives to address this problem, other than involving a bailout funded by taxpayers -- a political fantasy -- were presented as alternatives. There is a reason for this: if there were an easier way to save failing pensions, those concerned about the fate of these plans would have embraced it. Pretending something can be fixed less painfully later is not a plan, it's denial. After three years, several congressional hearings and many public events on Solutions Not Bailouts, no serious alternative plans emerged -- a clear indication there were no easy or painless ways to tackle this problem."
arrow icon Lockheed Settles Lawsuit Over Retirement Plan Investments
The Daily Record

"Lockheed Martin Corp. agreed to the provisional settlement of a $1.3 billion lawsuit by workers who claimed the Bethesda-based defense contractor mismanaged their retirement benefit plans, soaking them with fees while depriving participants of returns on company stock at least equal to those of investors on the open market. The accord, which requires court approval, was disclosed [Tuesday, December 16] by U.S. District Judge Michael Reagan ... The workers filed their class action in 2006."
arrow icon Seven Questions to Ask Non-Profit Plan Sponsors
The Principal Blog

"[1] Does your organization's management and board feel confident with the plan's governance and their own responsibilities as plan fiduciaries? ... [2] Who is helping you with your fiduciary due diligence? ... [3] Do you have an investment policy statement and review process in place? ... [4] Do you have an education policy in place? ... [5] What challenges has your organization faced as a result of plan regulatory changes.... [6] If your plan uses multiple providers, or has legacy plan assets with multiple providers, how do you coordinate appropriate administration? ... [7] How are you measuring the success of your plan?"
arrow icon Overview of the Multiemployer Pension Reform Act of 2014 (PDF)
Dexter Hofing LLC
12/17/2014 [Guidance Overview]

8 pages. "Significant changes the Act makes include the following: [1] Repeals the sunset provisions of the Pension Protection Act of 2006; ... [2] Limits the effect that future required contribution increases will have on employer withdrawal liability; [3] Adds to the list of documents that a plan is required to provide to participants, beneficiaries, unions or employers upon request; [4] Increases PBGC premiums to be paid by multiemployer pension plans; ... [5] Modifies rules regarding mergers of plans and partitioning of plans by the PBGC; [6] Adds a new zone status for seriously underfunded plans called 'Critical and Declining' and allows a plan in that status to cut some previously protected benefits; [7] Extends PBGC guarantees to some pre-retirement death benefits."
arrow icon IRS Advisory Committee Asks 403(b) Plan Sponsors and Service Providers to Participate Now in Confidential Online Survey About Plan Compliance Issues
Employee Plans Subgroup, IRS Advisory Committee on Tax Exempt and Government Entities
12/17/2014 [Guidance Overview]

The Employee Plans subgroup of the IRS Advisory Committee on Tax Exempt and Government Entities would like input from the 403(b) plan community -- plan sponsors and vendors/providers alike -- regarding the problems they face/see in administering 403(b) programs and what steps/actions they think the IRS could take to help facilitate the compliance process. Click here to participate in the survey (all responses are anonymous and will not be sent to the IRS).
arrow icon IRS Employee Plans News 2014-23, December 16, 2014 (PDF)
Internal Revenue Service [IRS]
12/17/2014 [Guidance Overview]

Topics include: [1] Certain funding elections for Cooperative and Small Employer Charity Act and eligible charity plans due December 31 2014; and [2] Informational Forms 5500 and 5500-SF, and final Form M-1.
arrow icon CRomnibus includes 'Expatriate Health Coverage Clarification Act' (PDF)
ABD Employee Benefits
12/17/2014 [Guidance Overview]

"The CRomnibus provides a permanent statutory exemption from most of the ACA's requirements for statutorily-defined 'expatriate health plans.'... Expatriate health plans now officially qualify as an eligible employer-sponsored plan that is minimum essential coverage. This means that an expatriate health plan will satisfy the enrollee's individual mandate.... [T]he exemption does not apply for the new health information reporting requirements for the beginning of 2016."
arrow icon State of the Insured Retirement Industry: 2014 Review and 2015 Outlook
Insured Retirement Institute [IRI]

20 pages. "[As] Boomers increasingly work to calculate savings goals and contemplate their expected expenses and longevity, they are becoming less confident in their ability to achieve a successful retirement. But when those investing for retirement work with financial professionals and/or incorporate annuities into their retirement strategies, they report being better prepared and more confident.... Despite some macroeconomic challenges, the insured retirement industry is financially sound and in a strong position to expand its share of the retirement market as continually evolving demographics lead to increased consumer demand."
arrow icon Guidance on Reimbursing Individual Health Insurance Premiums and Offering High-Risk Employees a Choice Between Enrollment and Cash
Sibson Consulting
12/17/2014 [Guidance Overview]

"In some circumstances, it is acceptable to provide more favorable treatment based on a health factor, a practice known as benign discrimination. For example, some plans allow disabled dependents to remain covered past age 26. However, the Departments state that offering cash in lieu of coverage only to employees with high medical claims risk is not a permissible form of benign discrimination under the HIPAA rules."
arrow icon Text of Amicus Brief by Pension Rights Center to Supreme Court in Tibble v. Edison (PDF)
Pension Rights Center

"Participants should be permitted to enforce the fiduciary duty to review and replace imprudent investments more than six years after the funds were chosen in light of the mechanics of the market for mutual funds available to 401(k) plans. Participants in plans managed by fiduciaries who do not comply with the duty to review and replace imprudent investments will pay unnecessarily high fees on their retirement savings. Further, insulating fiduciaries from claims challenging their failure to monitor mutual fund expenses after six years will reduce competition over fees and raise the cost of mutual fund investments in 401(k) plans, thereby eroding the retirement savings of American workers." [Tibble v. Edison International, No. 13-550 (9th Cir. Aug. 1, 2013; cert. pet. granted Oct. 2, 2014)]
arrow icon Text of Eighth Circuit Opinion Upholding 'Prejudice and Good Faith' Standard When Awarding Penalties for Failure to Provide COBRA Notice (PDF)
U.S. Court of Appeals for the Eighth Circuit

"The Coles finally contend the district court abused its discretion by considering the wrong factors when declining to award statutory penalties.... We believe instead the district court did not abuse its discretion where there was no evidence Trinity Health willfully failed to notify the Coles of their COBRA rights or of the retroactive termination of their coverage, and where the district court reasoned 'if Trinity Health intended to act in bad faith, free health care coverage would not have been extended to the Coles.' " [Cole v. Trinity Health Corp., No. 14-1408 (8th Cir. Dec. 15, 2014)]
arrow icon The Importance of Workplace Retirement Plans and Guaranteed Lifetime Income (PDF)

"The latest [National Retirement Risk Index (NRRI)] update indicates that the percentage of households at risk of being unable to maintain their pre-retirement standard of living has improved slightly to 52 percent, from 53 percent three years earlier.... Twenty percent of households with a DB plan through their current employer are at risk of not being able to maintain their living standard in retirement, while 53 percent with only a DC plan are at risk. The percentage of households at risk jumps to 68 percent when the household does not currently participate in a workplace retirement plan of any kind."
arrow icon Multiemployer Pension Reform Bill Passed by Congress, Obama Expected to Sign
Segal Consulting
12/16/2014 [Guidance Overview]

"MEPRA reflects many of the recommendations included in Solutions not Bailouts, the Report issued by the Retirement Security Review Commission of the National Coordinating Committee for Multiemployer Plans [NCCMP]. The one receiving the most attention is the provision that gives trustees of deeply troubled plans the ability to help their plans avoid insolvency by reducing some benefits (including benefits in pay status), subject to various safeguards and requirements. This Bulletin briefly describes the key provisions of MEPRA, which generally become effective for plan years beginning on or after January 1, 2015."
arrow icon The 2015 ABC's of Employee Benefits, Part 2
Ed Bray, in Employee Benefit News

"From ERISA 510 to skinny plans and private health care exchanges, the ABC's of employee benefits outlines the issues benefit decision-makers need to be aware of in the coming year."
arrow icon Individual Mandate Regs Address Affordability, and Here's Why Employers May Care
Benefits Bryan Cave
12/16/2014 [Guidance Overview]

"If employer-sponsored coverage is unaffordable, and the employee does not enroll in it, then the employee may be eligible for a premium tax credit for ACA Marketplace/Exchange coverage. Receiving that tax credit could trigger a play or pay penalty for the employer. We say 'could' because the employer play or pay regulations do have safe harbors for determining affordability[.]"
arrow icon Health Insurers Provide Additional Flexibility for Premium Payments
America's Health Insurance Plans [AHIP]

"To provide a smooth transition in the first year of the auto-enrollment and renewal process, America's Health Insurance Plans' (AHIP) Board of Directors today announced that health plans are voluntarily providing flexibility with payment deadlines for consumers purchasing coverage through the federal Marketplace."
arrow icon Advance Copies of 2014 Form 5500s: Avoid Penalties by Confirming Compliance
Solutions Law Press
12/16/2014 [Guidance Overview]

"The MEWA Form M-1 compliance information that was filed as an attachment for 2013 now appears as three new questions on the Form 5500.... Filers are now required to provide the total number of active participants at the beginning of the plan year and at the end of the plan year on both forms. Form 5500-SF filers now must provide the number of participants that terminated employment during the plan year with accrued benefits that were not fully vested.... New Line 4f requires plans in critical status to indicate the plan year in which a plan is projected to emerge from critical status or, if the rehabilitation plan is based on forestalling possible insolvency, the plan year in which insolvency is expected."
arrow icon Culturally and Linguistically Appropriate Services (CLAS) County Data, December 2014 (PDF)
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS]
12/16/2014 [Official Guidance]

"PHS Act section 2719 requires non-grandfathered group health plans and health insurance issuers offering non-grandfathered health insurance coverage to provide relevant notices in a culturally and linguistically appropriate manner ... Section 2715 of the PHS Act requires group health plans and health insurance issuers offering group and individual coverage to provide the summary of benefits and coverage (SBC) and uniform glossary in a culturally and linguistically appropriate manner ... The list [in this report] includes all counties which meet or exceed the 10 percent threshold ... for the 2009-2013 ACS data and is applicable until the next edition.... Sullivan County in Missouri has been added as a county that meets the 10 percent threshold with respect to Spanish. In the last update, no counties in Missouri had met the threshold."
arrow icon At Companies with DC Plans, Most Employees Participate, But Many Acknowledge Ignorance About Investing

"[A]mong private-sector employees who are offered a DC plan at work, 79 percent participate, up two percentage points from 2013. Eighty percent of public-sector employees eligible for a DC plan participate, up from 79 percent a year earlier. The research also reveals a continued decline of defined benefits in the private sector: in 2014, just 16 percent of employers offered them. While 401(k)s are wildly popular, over 40 percent of employees eligible for them at work are also saving for retirement outside of work."
arrow icon Retiree Health Care Benefits for State and Local Employees in 2014
National Association of State Retirement Administrators [NASRA]

"The brief discusses how different plan designs, coverage levels, and financing arrangements are associated with varying costs for sponsoring state governments. Among the findings: [1] States' unfunded OPEB liabilities (UAAL) remained relatively unchanged when compared to 2013 data; [2] Over three-fourths of the total state OPEB UAAL is held by 10 states; [3] 33 states set aside assets to prefund OPEB in FY13, up from 18 for the period FY09-FY11."
arrow icon Attitudes Towards Retirement Readiness in 403(b) Plans (PDF)
Plan Sponsor Council of America [PSCA]

"Half of organizations are equally concerned about all age groups of employees saving enough for retirement -- only 5 percent have no concerns.... About a quarter of organizations do not have a specific retirement plan education program.... 27.1 percent of employers feel that they have a responsibility to encourage savings, and a quarter think they do but would like to do more.... About half of plans consider automatic enrollment to be a way of improving participant outcomes, and half do not or are unsure."
arrow icon 2014 Instructions for IRS Form 1095-A, Health Insurance Marketplace Statement (PDF)
Internal Revenue Service [IRS]
12/16/2014 [Official Guidance]

"Form 1095-A is used to report certain information to the IRS about individuals who enroll in a qualified health plan through the Marketplace. Form 1095-A also is furnished to individuals to allow them to claim the premium tax credit, to reconcile the credit on their returns with advance payments of the premium tax credit (advance credit payments), and to file an accurate tax return.... Health Insurance Marketplaces must file Form 1095-A to report information on all enrollments in qualified health plans in the individual market through the Marketplace. Marketplaces may be State Marketplaces, regional Marketplaces, subsidiary Marketplaces, or the Federally-facilitated Marketplace." [Also available: Form 1095-A, Health Insurance Marketplace Statement.]
arrow icon Disclosure 'Terrible,' Would 'Confuse' Investors
Skip Schweiss, via Fiduciary News
12/16/2014 [Opinion]

"The insurance advice industry is fundamentally opposed to anything that looks like a fiduciary standard.... They seem to be looking for some kind of disclosure-based avenue to being considered fiduciaries.... Investors want to feel they are being taken care of and getting good financial advice, but it's beyond their bandwidth to care about these distinctions between 'suitable' advice vs. 'fiduciary' advice and how those distinctions can lead to impairment of optimal financial advice and outcomes."
arrow icon Treasury Releases Regs Governing Retirement Savings Bonds for myRA Accounts
Bloomberg BNA
12/16/2014 [Guidance Overview]

"The Preamble to the final regulations provides that participants have the flexibility to withdraw their contributions at any time without a penalty. This is overly simplistic to the unwary and is not meant to imply that the entire account balance can be withdrawn without a penalty, however. The definition of a Roth IRA ... is incorporated into the final regulations by reference.... [P]articipants who withdraw taxable amounts (e.g., earnings) prior to age 59-1/2 could be hit with the 10% penalty tax. In addition, earnings may still be taxed if the account has not been in existence for at least five years."
arrow icon Should Plan Sponsors Adopt the New Mortality Tables?
Findley Davies

"Some plan provisions would make the adoption of the new tables somewhat of a moot point. [For] a plan that pays lump sums ... the impact will be minimal as the table used for lump sums is not changing at this time. For cash balance plans, because the benefit is calculated as an account balance and not as a life annuity, extending life expectancy is largely irrelevant. Another facet to consider is the demographics of your plan. The new mortality tables are showing a bigger increase in cost for women as their life expectancy outpaced men. For plans that employ a union or industrial workforce, use of one of the sub-tables, such as the Blue Collar Mortality Table, probably makes more sense."
arrow icon Congress Passes Multiemployer Pension Reform (PDF)
Groom Law Group
12/16/2014 [Guidance Overview]

"The Act permanently extends the Pension Protection Act of 2006 (PPA) multiemployer plan critical and endangered status funding rules that had been scheduled to sunset at the end of 2014. It also includes a series of technical corrections and enhancements to the PPA funding rules, including significant new reforms that allow the trustees of multiemployer plans facing insolvency to apply to the [PBGC] for a suspension of benefits. In addition, the Act gives the PBGC greater flexibility in facilitating plan mergers and approving plan partitions. [In this article, the authors] provide an overview of each of these provisions, and address key questions regarding the relief made available by the Act."
arrow icon Review of ERISA Advisory Council Findings on Outsourcing of Employee Benefit Plan Services
October Three Consulting

"The EAC's recommendations, if acted on, would significantly improve current outsourcing practice, mainly by clarifying what the ERISA rules are. That clarification would make outsourcing contracting -- allocating liability between the sponsor and the outsourcing provider -- much easier and effective.... [T]he key issues are: [1] Can the sponsor fully delegate away named fiduciary responsibilities, with no residual 'select and monitor' responsibility/liability? And [2] if it cannot, what is the extent of those retained responsibilities/liabilities? Some bright-line guidance on those issues would be immensely helpful."
arrow icon Review of ERISA Advisory Council Recommendations on Lifetime Plan Participation
October Three Consulting

"The recommendations focus primarily on getting terminating participants to leave their retirement savings in their (former) employer's plan. This has been presented by many as a solution to the 'leakage' problem. It's unclear, however, whether sponsors actually want to retain the assets of terminating participants. And the changes in sponsor practice which the [ERISA Advisory Council] proposes to encourage participants to do this -- post-termination loan initiation, brokerage and mutual fund windows, lifetime income options and stable value funds, allowing consolidation of multiple accounts and providing access to financial advice -- all come with a cost."

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