Current Events

Lifetime income disclosure bill introduced in Senate

July 23, 2015

On May 13, 2015 Senators Isakson (R-GA) and Murphy (D-CT) introduced the Lifetime Income Disclosure Act, a bill that would require defined contribution plan sponsors to provide participants an annual estimate of the ‘lifetime income stream equivalent’ of their accrued benefit. In this article we briefly discuss the proposal; we then discuss (and compare with the Isakson-Murphy bill) DOL's project on the same issue. Read More

DOL proposed redefinition of ERISA fiduciary – Best Interest PTE

July 15, 2015

The Department of Labor's proposed regulation package re-defining who is an ERISA ‘fiduciary’ as a result of the provision of investment advice would re-label many relationships as ‘fiduciary’ that, under current rules, are not so labeled. With respect to ‘retail’ advice, including advice to plan participants, as part of the package, DOL also proposed a Best Interest Contract Prohibited Transaction Exemption (PTE). The PTE would allow advisers receiving ‘conflicted payments’ and related financial institutions to provide advice to participants, so long as certain requirements are met. In this article we discuss the PTE in detail. Read More

DOL re-proposes rules redefining ERISA ‘fiduciary’

June 01, 2015

On April 14, 2015, the Department of Labor released its long-awaited re-proposal of a regulation re-defining ‘fiduciary’ under ERISA. The proposal, if finalized, would significantly change what sorts of advice may be given, to whom and in what circumstances. It will probably have its greatest effect on brokers, mutual funds, and certain other financial services providers and on consultants and third party administrators. The proposal does not just cover 401(k) plans – it covers any employee benefit plan or IRA. Read More

Pension regulatory and legislative update – May 2015

June 01, 2015

In this Current outlook we review a number of recent developments: DOL's new rule providing a 2-month ‘cushion’ for the annual statement deadline; IRS's extension of its ‘closed plan’ relief to 2016; Congressional questioning about why the SEC is not more involved in the conflicted advice regulation project; the reintroduction of the SEAL Act, providing (among other things) rollover relief for loans distributed on termination of employment; the decision by the ERISA Advisory Council to re-study de-risking in 2015; and the Supreme Court's invitation to the Solicitor General to submit a brief with respect to RJR's request for a review of the Fourth Circuit's decision in Tatum v. R. J. Reynolds Tobacco Company. Read More

IRS provides safe harbor for correcting missed pension contributions

May 28, 2015

Under IRS's Employee Plans Compliance Resolution System, if a 401(k) plan sponsor fails to make a contribution that an employee has elected, ‘correction’ generally requires that the sponsor, make a contribution equal to 50% of the employee's ‘missed deferral.’ In Revenue Procedure 2015-28, released on April 2, 2015, IRS provided two new safe harbors, effectively waiving the 50%-of-missed-deferrals contribution requirement for certain failures related to automatic contributions and certain short duration failures. In this article we describe the new safe harbors, beginning with some background on the issue. Read More

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