Tag Archives: BLS

Regulatory roundup

More retirement-related regulatory news for plan sponsors, including links to detailed information.

IRS issues memo on the application of section 409A to back-to-back arrangement
The Office of Chief Counsel of the Internal Revenue Service (IRS) has issued a memorandum (No. 201725027) on the application of section 409A to back-to-back arrangement. According to the memo, “Treas. Reg. Section 1.409A-3(i)(6) provides that the amount of the payment under the ultimate service recipient plan may not exceed the amount of the payment under the intermediate service recipient plan. Therefore, the USR Plan fails to meet the requirements of section 409A because the USR Plan provision providing for a payment to Taxpayer in the event of a Participant’s separation from service before vesting is an impermissible payment event.”

For more information, read the entire memo here.

Higher-paid workers more likely to have access to retirement benefits
According to data published by the Bureau of Labor Statistics (BLS), “Sixty-six percent of private industry workers had access to employer-provided retirement plans in March 2016. Having access means employers offered the benefit, regardless of whether employees chose to participate. Forty-nine percent of private industry workers participated in retirement plans in March 2016. That results in a take-up rate—the percentage of workers with access to a plan who participate in the plan—of 75 percent. Access, participation, and take-up rates were all higher for workers in higher wage groups than for workers in lower wage groups.”

To learn more about the BLS’s data, click here.

Regulatory roundup

More retirement-related regulatory news for plan sponsors, including links to detailed information.

Guidance on midyear amendments to safe harbor 401(k) plans and notices
The Internal Revenue Service (IRS) has posted a summary of Notice 2016-16. This issued guidance is intended to help plan sponsors comply with the safe harbor plan and notice rules if they make midyear plan changes.

To read the entire notice, click here.

IRS compliance questions on the 2015 Form 5500-series returns
Because the proposed 2015 IRS compliance questions on the Forms 5500 and 5500-SF and Schedules H, I, and R were not approved by the Office of Management and Budget when the 2015 Form 5500 and Form 5500-SF were published on December 7, 2015, the IRS has decided that plan sponsors should not complete these questions for the 2015 plan year.

Trends in employer costs for defined benefit plans
A new article published on the Bureau of Labor Statistics website explores how defined benefit plan costs fluctuate by industry, occupation, establishment size, and region. The article also reviews trends in costs for employees with access to these plans from 2008 to 2015.

To read the entire article, click here.

Regulatory roundup

More retirement-related regulatory news for plan sponsors, including links to detailed information.

PBGC posts premium filing instructions
The 2016 comprehensive premium filing instructions have been approved by the Office of Management and Budget (OMB). The instructions are now available on the website of the Pension Benefit Guaranty Corporation (PBGC).

To access the premium filing instructions, click here.

IRS releases cumulative list of changes for plan qualification requirements
The Internal Revenue Service (IRS) has issued Notice 2015-84, providing the 2015 cumulative list of changes in plan qualification requirements. Plan sponsors and practitioners should use the list to submit determination letter applications for plans during the period beginning February 1, 2016, and ending January 31, 2017.

To read the entire notice, click here.

GASB issues new pension guidance designed to assist certain multiple-employer DB plans
The Governmental Accounting Standards Board (GASB) has issued guidance designed to assist governments that participate in certain private or federally sponsored multiple-employer defined benefit pension plans such as Taft-Hartley plans.

This new guidance removes an impediment to complying with the GASB’s financial reporting requirements for governments participating in certain multiple-employer defined benefit pension plans. It also promotes enhanced consistency among those applying the standards. The new guidance in GASB Statement No. 78, Pensions Provided Through Certain Multiple-Employer Defined Benefit Pension Plans, assists these governments by focusing employer accounting and financial reporting requirements for those pension plans on obtainable information.

To read the full text of GASB Statement 78, click here.

CBO’s 2015 Social Security policy options
The Congressional Budget Office (CBO) has published a report analyzing 36 policy options commonly proposed by policymakers and analysts. Many of them could improve Social Security’s long-term finances, but only a few would significantly postpone the combined trust funds’ exhaustion date.

To read the entire report, click here.

Benefits, retirement, and savings make up larger percentage of government employee compensation
According to a U.S. Bureau of Labor Statistics chart, state and local government employer costs for employee benefits over the last 10 years have increased as a share of total compensation. This can be mostly attributed to increases in retirement and savings, specifically defined benefit plans. Retirement and savings as a share of total compensation increased from 6.6% in March 2005 to 10.4% in September 2015.

To view the chart, click here.

Regulatory roundup

More retirement-related regulatory news for plan sponsors, including links to detailed information.

SEC guidance on the terms “spouse” and “marriage” following United States v. Windsor
The U.S. Securities and Exchange Commission (SEC) is publishing interpretive guidance to clarify how it will interpret the terms “spouse” and “marriage” in response to the U.S. Supreme Court’s ruling in United States v. Windsor.

In light of the Supreme Court decision on Windsor, the SEC will read the terms “spouse” and “marriage,” where they appear in the federal securities statutes it administers, and in the rules and regulations promulgated thereunder, releases, orders, and any guidance issued by the staff or SEC, to include, respectively, (1) an individual married to a person of the same sex if the couple is lawfully married under state law, regardless of the individual’s domicile, and (2) such a marriage between individuals of the same sex. This guidance is consistent with Windsor.

For more information, click here.

Senate Finance Committee releases memo from tax reform working group
The U.S. Senate Finance Committee’s Tax Reform Working Group released a memorandum on July 8 that provides an overview of the data related to retirement plan access and participation. The report addresses current law, the questions the group sought to address based on some shortcomings identified with current law, and some concepts and proposals the group has identified that seek to address these shortcomings.

The Savings and Investment Working Group has jurisdiction over the tax treatment of capital gains and dividends, financial products, defined benefit (DB) pension plans, and private retirement savings accounts.

Among the proposals cited in the report were enabling the formation of multiple employer plans, creating safe harbors for small businesses to offer retirement plans, allowing part-time workers to enroll in plans, making benefits more portable, and addressing leakage. The group also called for clarifying rules for church-sponsored retirement plans.

The entire report can be downloaded here.

SEC Investor Advocate issues annual report
The SEC’s Office of the Investor Advocate has published the report entitled “Report on objectives: Fiscal year 2016.”

To read the entire report, click here.

GAO issues a report on financial literacy in the workplace
The U.S. Government Accountability Office (GAO) published a report entitled “Financial literacy: The role of the workplace.” The report provides a summary of the discussion of a forum on financial education in the workplace, which was held on March 17, 2015. The following subjects were discussed:

• The role of the employer in promoting financial literacy
• The effectiveness of such efforts
• How best to serve low-income and other underserved populations
• The federal government’s role in supporting these efforts

To read the entire report, click here.

Bureau of Labor Statistics publishes article on savings and thrift plans
The latest edition of Beyond the Numbers, from the U.S. Bureau of Labor Statistics, looks at the growth in the prevalence of employer-provided savings and thrift plans in private industry in the United States.

To read the entire article, click here.

Regulatory roundup

More retirement-related regulatory news for plan sponsors, including links to detailed information.

PBGC releases data tables
The Pension Benefit Guaranty Corporation (PBGC) has released its annual update on pension data. The data tables cover information recently reported by pension plans and the PBGC, comparing them with values for prior years.

The data tables provide researchers, journalists, and others interested in the federal pension insurance program easily accessible, detailed statistics for the single-employer and multiemployer plans that PBGC insures. The tables include the numbers of people and plans that the PBGC protects, the number of people receiving or eligible to receive benefits from the PBGC as well as the benefits paid to them, claims against the PBGC, the funded status of PBGC-protected plans, and other statistics.

To read the latest PBGC data tables, click here.

BLS: Automatic enrollment, employer match rates, and employee compensation in 401(k) plans
The latest Monthly Labor Review article on the U.S. Bureau of Labor Statistics (BLS) website uses restricted-access employer-level micro data from the National Compensation Survey to examine the relationship between automatic enrollment and employee compensation in 401(k) plans.

To read the entire article, click here.

GAO report: Most households approaching retirement have low savings
The U.S. Government Accountability Office (GAO) recently released the report “Most households approaching retirement have low savings” (GAO-15-419). According to this report, many retirees and workers approaching retirement have limited financial resources. About half of households age 55 and older have no retirement savings, such as in a 401(k) plan or IRA. Additionally, many older households without retirement savings have few other resources, such as a defined benefit (DB) plan or nonretirement savings, to draw on in retirement.

To read the entire report, click here.

SEC memo addresses pay ratio disclosure
The Division of Economic and Risk Analysis of the Securities and Exchange Commission (SEC) released a memorandum to assist the SEC in developing final rules regarding pay ratio disclosure. The division analyzed the potential effects on the pay ratio calculation of the exclusion of different percentages of employees. The memorandum states that excluding some employees from the determination of median employee compensation, which some commenters suggested, can affect the calculation of that median and thus change the ratio of the annual total compensation of the principal executive officer (PEO) to the median of the annual total compensation of employees (“pay ratio”).

To read the entire memo, click here.

Regulatory roundup

More retirement-related regulatory news for plan sponsors, including links to detailed information.

DOL issues proposed fiduciary rule
The U.S. Department of Labor (DOL) has released a proposed rule that will protect 401(k) and IRA investors by mitigating the effect of conflicts of interest in the retirement investment marketplace. Under the proposals, retirement advisers will be required to put their clients’ best interests before their own profits. Those who wish to receive payments from companies selling products they recommend and forms of compensation that create conflicts of interest will need to rely on one of several proposed prohibited transaction exemptions.

To read the entire proposed rule, click here.

Bureau of Labor Statistics: A look at today’s pension equity plans
Among the changes in pension plans tracked by the U.S. Bureau of Labor Statistics (BLS) since the late 1970s are different formulas for calculating benefits. One of those formula types is the pension equity plan (PEP). These plans were first identified by BLS private industry surveys conducted in the late 1990s; today, they make up a small share of all pension plans. The latest issue of BLS’s Beyond the Numbers examines the concept behind pension equity plans and looks at some unique features of these plans.

To read the latest issue, click here.

FASB issues accounting standards update on employer’s defined benefit obligation and assets
The Financial Accounting Standards Board (FASB) has issued a new accounting standards update, “Practical expedient for the measurement date of an employer’s defined benefit obligation and plan assets.” The update gives companies “practical expedient” to decide fair value measurement dates for plan benefits when there is a mismatch in timing.

The amendments are effective for public business entities for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. For all other entities, the amendments in this update are effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. Earlier application is permitted. The amendments in this update should be applied prospectively.

To read the entire update, click here.