Tag Archives: SEC

Regulatory roundup

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

BLS publishes chart on lump-sum distributions related to DC plans
The U.S. Bureau of Labor Statistics (BLS) has published a new chart highlighting the most common payment option for participants in defined contribution (DC) retirement plans. According to the BLS, “As workers approach retirement, they might wonder how their retirement savings will be paid out. Among private industry workers in defined contribution plans in 2017, most participated in savings and thrift plans (73 percent). Other common plan types include deferred profit sharing (25 percent) and money purchase pensions (18 percent). A lump sum was the most common payment option available to workers in these plans. A lump sum provides retiring workers the full amount of their retirement savings and earnings with no further benefits received from the plan.”

To learn more, click here.

Final rule aimed at improving investors’ experience issued by SEC
The U.S. Securities and Exchange Commission (SEC) issued a final rule aimed at improving investors’ experience when investing in mutual funds, exchange-traded funds (ETFs), and other investment vehicles. The rule permits asset managers to deliver shareholder reports by making them publicly accessible on a free website and sending investors a paper notice of each report’s availability via mail. If an investor prefers to continue receiving shareholder reports by mail, they may do so. The new rule goes into effect January 21, 2021.

To learn more about the final rule, click here.

Regulatory roundup

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

DOL files final rule on savings arrangements established by states for nongovernmental employees
The U.S. Department of Labor (DoL) filed at the Federal Register a final rule entitled “Savings Arrangements Established by States for Non-Governmental Employees.” The final rule describes circumstances in which state payroll deduction savings programs with automatic enrollment would not give rise to the establishment of employee pension benefit plans under ERISA.

The final rule provides guidance for states in designing such programs so as to reduce the risk of ERISA preemption of the relevant state laws. The final rule also provides guidance to private-sector employers that may be covered by such state laws. This rule affects individuals and employers subject to such state laws.

The final rule is effective 60 days after publication in the Federal Register. It is scheduled for publication on August 30, 2016.

To read the entire final rule, click here.

Proposed rule on savings arrangements established by states for nongovernmental employees
The DoL filed a proposed rule entitled “Savings Arrangements Established by State Political Subdivisions for Non-Governmental Employees.” The proposed rule would amend a regulation that describes how states may design and operate payroll deduction savings programs, using automatic enrollment, for private-sector employees without causing the states or private-sector employers to establish employee pension benefit plans under ERISA. The proposed amendments would expand the current regulation beyond states to cover programs of qualified state political subdivisions that otherwise comply with the current regulation. This rule would affect individuals and employers subject to such programs.

Written comments should be received on or before 30 days after the date of publication in the Federal Register. Publication is scheduled for August 30, 2016.

To read the entire proposed rule, click here.

New procedure to help people making IRA and retirement plan rollovers
The Internal Revenue Service (IRS) provided a self-certification procedure designed to help recipients of retirement plan distributions who inadvertently miss the 60-day time limit for properly rolling these amounts into another retirement plan or IRA.

IRS Revenue Procedure 2016-47 explains how eligible taxpayers, encountering a variety of mitigating circumstances, can qualify for a waiver of the 60-day time limit and avoid possible early distribution taxes. In addition, the revenue procedure includes a sample self-certification letter that a taxpayer can use to notify the administrator or trustee of the retirement plan or IRA receiving the rollover that they qualify for the waiver.

To read the entire revenue procedure, click here.
For more information on rollovers and transfers, click here and here.

Guidance for one-participant plan sponsors
One of the most common reasons why a retirement plan becomes an orphan plan is because the plan sponsor no longer exists. The IRS has published some information offering sponsors guidance on how to prevent orphan plans.

For more information, click here.

SEC adopts rules to enhance information reported by investment advisers
The Securities and Exchange Commission (SEC) adopted amendments to several Investment Advisers Act rules and the investment adviser registration and reporting form to enhance the reporting and disclosure of information by investment advisers. The amendments will improve the quality of information that investment advisers provide to investors and the SEC.

For more information, 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.

Supreme Court rules state bans on same-sex marriage are unconstitutional
The U.S. Supreme Court held that the 14th Amendment requires a state to license a marriage between two people of the same sex and to recognize a marriage between two people of the same sex when a marriage was lawfully licensed and performed out of state.

To read the court’s opinion paper, click here.

Census releases quarterly survey of public pension funds
The U.S. Census released the 2015 1st Quarter Survey of Public Pension Funds. The 100 largest U.S. public employee retirement systems had $3.398 trillion in assets as of March 31, a 1.6% increase from three months earlier, according to the survey. The increase was due primarily to $80.2 billion in earnings on investments and $34.3 billion in contributions, partially offset by $61.8 billion in benefit payments in the first quarter.

To read the entire survey, click here.

SEC establishing retirement project
The U.S. Securities and Exchange Commission (SEC) Office of Compliance Inspections and Examinations (OCIE) is launching a multiyear Retirement-Targeted Industry Reviews and Examinations (ReTIRE) Initiative.

OCIE, through the National Examination Program (NEP), will conduct examinations of SEC-registered investment advisers and broker-dealers (collectively, registrants) under the ReTIRE Initiative that will focus on certain higher-risk areas of registrants’ sales, investment, and oversight processes, with particular emphasis on select areas where retail investors saving for retirement may be harmed.

For more information, 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.

New GAO report focuses on lump-sum information for plan participants
The Government Accountability Office (GAO) has released “Private pensions: Participants need better information when offered lump-sums that replace their lifetime benefits” (GAO-15-74). The report reviews the critical issues associated with lump-sum window offerings by large pension plan sponsors. The GAO’s review focused on the prevalence of lump-sum offers and sponsors’ incentives to use them, the implications for participants, and the extent to which selected lump-sum materials provided to participants include key information.

To read the entire report, click here.

SEC no-action letter extending Rule 482 relief
The Securities and Exchange Commission (SEC) has released a letter sent to the American Retirement Association in which it extends its position concerning Rule 482 to certain information furnished to participants and beneficiaries in certain retirement savings plans under Section 403(b) of the Internal Revenue Code of 1986 (Code) that are not subject to ERISA, i.e., non-ERISA 403(b) plans.

According to the letter, the SEC agrees to treat investment information required by the U.S. Department of Labor (DOL) furnished, in the manner described, to non-ERISA 403(b) plans, and participants and beneficiaries in such plans, as if it were a communication that satisfies the requirements of Rule 482 under the Securities Act.

The views expressed in the letter also extend to retirement savings plans that similarly are not subject to ERISA, including governmental 457(b) and 401(a) plans, 415(m) plans, church 401(a) plans, non-governmental 457(b) plans, and 409A plans or 457(f) plans of governmental or tax-exempt entities, i.e., other non-ERISA plans.

To read the entire letter, click here.

IRS changes address for 403(b) pre-approved plan determination letters submissions
The Internal Revenue Service (IRS) has issued Revenue Procedure 2015-22 containing a modification to Revenue Procedure 2013-22, 2013-18 I.R.B. 985, as modified by Revenue Procedure 2014-28, 2014-16 I.R.B. 944, and modifications to Revenue Procedure 2015-8, 2015-1 I.R.B. 235.

In particular, this revenue procedure changes the addresses to which applications for opinion and advisory letters for § 403(b) preapproved plans should be submitted and inserts a user fee that was omitted from Rev. Proc. 2015-8. This revenue procedure will be in Internal Revenue Bulletin 2015-11 dated March 16, 2015.

For more information, click here.

IRS issues employee plans newsletter
The IRS has issued the February 27, 2015, edition of Employee Plans News. To download the newsletter, click here.