Retirement Plans Webinar
•
1 like•229 views
The document provides information about an upcoming webinar, including details about listening to the audio and accessing resources. It states that a dial-in number will not be provided and listeners should use their computer speakers or headphones. Frequently asked questions are answered, noting that the presentation slides and recording will be available afterwards and certification may be obtained. The webinar introduction then provides background about the presenter before beginning the presentation on retirement plan risks and regulatory compliance strategies.
Recommended
Recommended
More Related Content
What's hot
What's hot (20)
Similar to Retirement Plans Webinar
Similar to Retirement Plans Webinar (20)
More from Human Capital Media
More from Human Capital Media (20)
Recently uploaded
Recently uploaded (14)
Retirement Plans Webinar
- 1. #WFwebinar Sponsored by The presentation will begin at the top of the hour. A dial in number will not be provided. Listen to today’s webinar using your computer’s speakers or headphones. Welcome to the webinar!
- 2. #WFwebinar Sponsored by Tools You Can Use Audio Control – A dial in number will not be provided. – Adjust the volume by sliding the indicator in the Media Player box to the right. – Also check your computer’s volume for external speakers or headsets.
- 3. #WFwebinar Sponsored by Tools You Can Use Speaker Bios Resources Media Player Q&A Slides Twitter Help Post Event EvaluationShare This Group Chat HRCI & SHRM WF Webinars
- 4. #WFwebinar Sponsored by 1. May I receive a copy of the slides? YES! Click on the resource list located on the top right portion of your screen. 2. May I review the webinar recording at a later date? YES! You may log in again using today’s link to review the presentation on-demand. 3. Is this webinar HRCI or SHRM certified? YES! The HRCI and SHRM certification codes will appear in the box to the right of the slides after the required watch-time has elapsed. Frequently Asked Ques6ons
- 5. #WFwebinar Sponsored by Steve J. Friedman Shareholder and Cochair of the Employee Benefits Prac<ce Group Li$ler Mendelson Re6rement Plans Under A:ack by Plan Par6cipants and Government Agencies: An Ac6on Plan for Employers
- 6. Re6rement Plans Under A:ack by Plan Par6cipants and Government Agencies – An Ac<on Plan for Employers Steven J. Friedman • New York
- 7. Current Regulatory Environment – IRS Employee Plans Examina<on Program IRS imposes monetary sanc<ons on employer plan sponsors for: • Failure to operate 401(k)/403(b) plans in accordance with Internal Revenue Code requirements • Failure to follow the terms of the plan documents even if plan opera<on is within compliance with Internal Revenue Code requirements
- 8. Issuance of IRS Revenue Procedures establishing Employee Plans Compliance Resolu<on System: • Requires review of internal controls to qualify for IRS self-‐ correc<on program and mi<gate the amount of IRS monetary sanc<ons • Sanc<ons imposed by IRS on audit even if failures are uninten6onal discrepancies between plan opera<on and plan documents that result in no harm to plan par<cipants • Sanc<ons are based on a percentage of plan assets and can be quite substan<al Current Regulatory Environment – IRS Employee Plans Examina<on Program
- 9. Current Regulatory Environment – IRS Employee Plans Examina<on Program Substan<al increase in enforcement ac<vi<es: • Significant increase in number of audits in the last several years • IRS audits have well exceeded 11,000 • Significant changes to IRS Plan Determina<on Program • IRS examina<on ac<vi<es increases importance of annual review of internal controls to qualify for self-‐correc<on
- 10. Current Regulatory Environment – IRS Employee Plans Examina<on Program Closing agreement = sanc6ons and fines in addi6on to IRS required correc6ons Fact: every re<rement plan has disqualifying defects
- 11. DOL Inves<ga<ons Focus on • Timeliness of Contribu<ons • Expenses – Should they be paid by the plan? – Are they too high? – Vendor Choices • Services • Fiduciary Prac<ces – Commiee Mee<ngs – Minutes of Mee<ngs – Investment Policy – Costs of Investments – RFPs/RFIs – Confiden<ality Policy (Employer Stock Funds) – Vendor Contracts • Disclosures – SPDs/SMMs – Summary Annual Reports – Fees/Services – Mapping/Blackout – QDIAs – Auto enrollment
- 12. Screening Reviews • Replicate IRS and DOL Audits • Discover Defects • Adopt Best Prac<ces • U<lize IRS and DOL Voluntary Correc<on Programs • It is best accomplished through an independent PRIVILEGED legal review that affords protec<on
- 13. 401(k)/403(b) Plan Screening Review The Opera<onal Screening Review would cover one or more problem areas, for example: – Plan eligibility and entry (with a focus on re-‐hires) – Automa<c Enrollment/Increase – Limits on elec<ve deferrals – Timely deposits of par<cipant contribu<ons – Alloca<on of employer and matching contribu<ons – Nondiscrimina<on tes<ng and controlled group – Par<cipant loans and hardship withdrawals, and plan distribu<ons – Composi<on of eligible compensa<on – Spousal consent – 5500 Repor<ng – Corporate ac<on and Plan governance
- 14. 401(k)/403(b) Plan Screening Review • Gather all Plan documenta<on • Interview company employees who administer the Plan to make sure they’re following the Plan; if necessary conduct training • Review vendor contracts and interview vendors for compliance with the Plan documents • Review Par<cipant disclosures and enrollment materials • Review Plan procedures for compliance with the law (e.g., are all required no<ces being given) • Do some sample tes<ng of par<cipant records (e.g., look at plan loans processed over the last year or two) • Correct any errors
- 15. Plan Draeing and Opera<on – Top 10 Errors 1. Automa<c Enrollment/Automa<c Increase – No<ces – QDIA 2. Compensa<on – Overstated – Understated 3. Eligibility of Employees – Too early – Too late – Ineligible Altogether 4. Employee Exclusions – Non Discrimina<on pigalls – Seasonal, part-‐<me, per diem 5. Ves<ng – Elapsed <me or hours pigalls
- 16. Plan Draeing and Opera<on – Top 10 Errors 6. Forfeitures – Timing – Reduce or reallocate 7. Safe Harbor Contribu<ons – No<ces – Alloca<ons – Amendments 8. In-‐Service Distribu<ons – Loans – Hardship – Illiquid assets 9. Distribu<on Types – Lump Sum – Installment 10. Matching True-‐up
- 17. IRS Voluntary Correc<ons • Self-‐Correc<on Program – Insignificant failures – Significant failures if corrected quickly enough • Voluntary Correc<on Program – Significant failures – Retroac<ve plan amendment
- 18. Who are the Plan Fiduciaries? • If any of the following – – Discre<onary responsibility for administra<on – Exercises discre<onary authority or control over plan assets – Provides investment advice for a fee • DOL’s expansion of fiduciaries
- 19. Iden<fying the ERISA Fiduciary • Named fiduciary – a fiduciary who is named in the plan document or who, pursuant to a procedure specified in the plan, is iden<fied as a fiduciary. Common named fiduciaries are the sponsoring employer and the employer’s board of directors. • Deemed fiduciary – an individual or en<ty that performs a fiduciary func<on regardless of whether such individual or en<ty is actually named as a fiduciary – For late deferrals, this would be the person who approves the ACH transfer of contribu<ons to the trust or signs the contribu<on check
- 20. Fiduciary Func<ons • Plan administra<on, including claims • Plan investments • Plan expenses paid from plan assets • Selec<on and monitoring persons performing fiduciary du<es • Par<cipant communica<ons
- 21. Which Hat Are You Wearing? • ERISA allows employers to wear “two hats” • It is important to know which hat you are wearing because ERISA’s fiduciary rules may apply
- 22. Which Hat Are You Wearing? Selor • Plan Design • Amendment or Termina<on • Employee Communica<ons about corporate issues • Aorney-‐Client Privilege applies Fiduciary • Plan Administra<on • Implementa<on of Amendment/Termina<on • Holding/Inves<ng Plan Assets • Appoin<ng a fiduciary • Par<cipant Communica<ons • Aorney-‐client privilege may not apply
- 23. General ERISA Fiduciary Du<es • Exclusive Benefit Duty • Prudent Person Duty • Diversifica<on Duty • Plan Adherence Duty • Disclosure Duty • Duty to Monitor • Co-‐Fiduciary Liability
- 24. How the Commiee Implements Procedural Prudence • Selec<on of providers • Request compe<ng bids from service providers • Evaluate creden<als and capabili<es • Understand compensa<on arrangement • Evaluate contract terms for reasonableness (e.g., termina<on penal<es) • Check references • Regularly monitor and adjust when appropriate
- 25. Diversifica<on Requirement: Fiduciary Protec4on • ERISA Sec<on 404(c) provides some fiduciary relief for investment losses resul<ng from par<cipant elec<ons in par<cipant directed plans • Plan which complies with ERISA Sec<on 404(c): – Opportunity to Control: Par<cipant must be provided an opportunity to control assets of his or her individual account – Diversified Choice: Par<cipant must be en<tled to choose from a broad range of diversified investment alterna<ves – Actual Control: Par<cipant must actually exercise independent control
- 26. Managing Fiduciary Responsibility Plan Commiee Opera<on • Set a structure for opera<ons, such as guidelines for reviewing investment alterna<ves or for handling claims • Select service providers to assist with Commiee func<ons (e.g., investment advisor, accountant, fiduciary advisor) • Determine how plan-‐related expenses will be evaluated and, if permied under the plan, paid out of plan assets • Set up regular mee<ngs • Set up procedure for documen<ng all mee<ngs held and ac<ons taken and providing minutes to monitoring fiduciary
- 27. Breach of Fiduciary Rules Protec<ons from Fiduciary Liability • Monitor other fiduciaries/ service providers • Conduct plan self-‐screening reviews • U<lize IRS/DOL compliance programs to correct plan and fiduciary failures when they occur • Procure liability coverage for fiduciaries
- 28. DOL Voluntary Correc<on Programs • Voluntary Fiduciary Correc<on Program – Online calculator • Delinquent Filer Program – Large Plans – Small Plans
- 29. Recent Li<ga<on • 401(k) Fee Cases – ERISA breach of fiduciary duty lawsuits were filed against large publicly traded companies and several 401(k) service providers
- 30. Recent Li<ga<on • The suits included a variety of allega<ons, including: – Fees and expenses paid by the plans were unreasonable – Plan fiduciaries failed to monitor the fees and expenses, and did not understand the fees – Plan fiduciaries failed to properly disclose fees – Plan fiduciaries failed to select lowest investment class – Plan fiduciaries were conflicted – Plan fiduciaries failed to have procedures to properly iden<fy, review, and monitor fees and expenses
- 31. What to Do to Prevent Errors? • Communicate with Vendors • Communicate within organiza<on (Payroll/HR/Legal) • Read and Retain Documents and Contracts • Review Regularly – Plan Document and Opera<on Review – Fiduciary Compliance Review
- 32. Fiduciary Compliance Review A Fiduciary Compliance Review would examine: – Prudent selec<on and monitoring of plan investments – “Reasonable” Plan fees and costs – Par<cipant disclosures and communica<ons – Timely deposits of par<cipant contribu<ons – Poten<al conflicts of Company and plan interests – Plan governance and procedural due diligence – Adequacy of fidelity bonds, fiduciary liability insurance, and indemnifica<ons
- 33. Fiduciary Compliance Review • Review Plan documenta<on (i.e., including the “boilerplate”) to determine who does what • Iden<fy all the Plan fiduciaries and their intended func<ons • Make sure all delega<ons are in place • Interview fiduciaries who are Company employees to make sure they’re doing what they’re supposed to do (especially payroll) • Establish and conduct periodic fiduciary training • Review vendor contracts for extent of fiduciary liability • Interview third-‐party service providers (e.g., investment managers) for compliance with the Plan • Review Plan fiduciary mee<ngs and minutes for adherence to DOL guidance • Correct any errors
- 34. Ques<ons?
- 36. #WFwebinar Sponsored by Register for the next Webinar! Reimagining a Performance Culture Wednesday, January 11, 2016 Webinars start at 2 p.m. Eastern / 11 a.m. Pacific Register for all upcoming Workforce Webinars at events.workforce.com/webinars OR click the icon on the widget bar!