IRS: Treat Same-Gender Spouses the Same

Qualified plans must treat a same-gender spouse as a spouse for purposes of federal tax laws if the marriage took place in one of the 13 states and the District of Columbia where same-gender marriage is currently legally recognized, under the terms of an IRS Revenue Ruling issued Aug. 29. A couple’s “state of celebration,” rather than the state of residence, will be the determining factor in the federal recognition of same-gender marriages.   Read More

Last Call for NAPA DC Fly-in Forum Registration

As part of the NAPA DC Fly-in Forum Sept. 17-18, top NAPA advisors from all over the country will spread out all over Capitol Hill to lobby members of Congress and their staffs. This very important advocacy project will help educate Congress on the impact of various pieces of legislation, such as tax reform, as well as regulations, such as the pending rule from the Department of Labor regarding the definition of a fiduciary. This is one of the most important functions NAPA members can undertake to help move the industry forward.   Read More

Higher Education Deferral Rates Top 13%

Does the higher education, 403(b) market offer insights that 401(k) plans should follow, as well opportunities for 401(k) advisors? According to a study by Transamerica, higher ed deferral rates are 13.4% — compared with an average of just over 6% for 401(k) plans. Transamerica attributes the results to more face-to-face meetings at these institutions of higher learning.   Read More

Proprietary TDFs: Good, Bad or Just Right?

There’s a lot of discussion about the efficacy of TDFs that invest only in the fund complex’s investments. Many are predicting that it’s only a matter of time before they’re forced to open up to outside investments, just as record keepers were forced to offer non-proprietary funds more than a decade ago. But is this conventional wisdom true, or even sound?   Read More

GLBAs Struggle in Low-return Environment

Industry blogger Michael Kitces raises doubts about the attractiveness of guaranteed living benefit annuity (GLBA) riders, which have the appeal of ensuring a certain withdrawal while providing an upside when markets are strong. By offering a floor with upside potential but lower expected returns and higher costs, GLBAs have turned the proposition sideways, Kitces believes.   Read More

Some Pensions Embrace Riskier Assets

Larger corporate pension plans are moving to riskier investments, according to recent research by Fitch Ratings. Assets in “Level 3,” which include thinly traded and hard-to-value investments like real estate, rose to 8.5% of total assets, up from 7.8% for the same period a year ago. Sixty-six of the 224 plans profiled have more than 10% in Level 3 investments. And three well-known companies have more than a third of their assets in these riskier investments: Hanesbrand (44%), Verizon (43%) and Kroger (37%).   Read More

Inside a DOL Audit

Among those advisors lucky enough to have been through a DOL audit, most wish that their clients had been better prepared, with all requested documents and materials gathered ahead of time. In the wake of the 408(b)(2) rules, the DOL’s Philadelphia region recently updated the list of documents that they typically request during an audit. The list is lengthy and although the DOL will typically work with the plan sponsor if additional time is needed to produce the documentation, it’s certainly better to have it ready, which is good practice anyway.   Read More

Brokerages’ Social Media Approach is Evolving

Following in the footsteps of their RIA brethren, broker dealers and wire houses are accelerating their use of social media. More importantly, they’re beginning to integrate new media into their marketing and business development efforts — a sign of the increasingly sophisticated view of social media platforms and content that’s taking hold.   Read More

Private Lobbyists in 20 States Get Public Pensions

As public pensions are unraveling, with cities like Stockton, San Bernardino and now Detroit burdened by huge retirement obligations owed to workers and now unable to pay their bills, news of private lobbyists entitled to receive benefits is causing concern, the Wall Street Journal reports. Hundreds of lobbying groups in 20 states are entitled to receive retirement and, in some cases, health care benefits because they represent associations of cities, counties and school boards.   Read More

The Long Haul

Planning for retirement is often compared to preparing for a big trip: trying to figure out what you’ll need for the journey, estimating the fuel you’ll need — but ultimately not being precisely sure at the outset how long the trip will last.   Read More

Last Week’s Top 5 Posts on NAPA Net

Last week’s top 5 most-read posts on NAPA Net reflected interest in a liberal think tank’s proposal to abolish the current employer-based retirement system, Yale Law School’s statement asserting they are not responsible for Prof. Ian Ayres’ research, the possibility that Bank of America may dissolve its Merrill Lynch unit, IRS examinations of qualified plans, and an explanation of profit sharing allocation alternatives.   Read More

Participant Fee Equalization: Silver Bullet or Flash in the Pan?

A few providers are offering a service that levelizes fees for all participants and are claiming that this service will become popular and important with plan sponsors. The issue is that participants don’t pay a percentage of their assets like the plan does — they pay based on the revenue sharing in the funds they purchase, commonly through Sub TA or 12(b)(1) fees. So a participant who selects no revenue-sharing funds could pay nothing to subsidize the costs of the plan, leaving others to carry the load.   Read More

Be Smart With Centers of Influence

Centers of influence like CPAs, bankers, attorneys or even other advisors that don’t service DC plans can be the greatest source of leads for a plan advisor. But creating a network of COIs is hard and takes time. A Wall Street Journal article offers a list of common mistakes and suggested solutions.   Read More

Opportunity Alert: 529 Plans

Most parents are concerned about saving for their kids’ college education, as costs continue to rise with no end in sight. Companies can offer a Section 529 college savings plan that acts much like a 401(k) plan, including automatic pretax payroll deductions. For plans with more than 200 employees, it’s common for the plan to be free.   Read More