American Benefits Council
Benefits Byte

2014-056

July 7, 2014

The Benefits Byte is the American Benefits Council’s regular e-mail and online newsletter for members only, providing timely reports on legislative, regulatory and judicial developments, along with updates on the Council’s activities in support of employer-sponsored benefit plans.

The Benefits Byte is published by the American Benefits Council, based on staff reports and edited by Jason Hammersla, Council director of communications. Contact information for Council staff related to specific topics can be found at the end of each story.

Click here to read past issues on the Benefits Byte Archive page.

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Council Submits Additional Comments to EBSA on Target Date Fund Proposal

In new comments to the U.S. Department of Labor (DOL) Employee Benefits Security Administration (EBSA) on July 3, the Councilsuggested that the DOL proceed cautiously in considering any new target date fund disclosure requirements that would be based on a risk analysis of the funds.

The Council’s comment letter was submitted in response to the recent reopening of the comment period on EBSAs ongoing regulatory project addressing target date funds including the use of target date funds as a qualified default investment alternative (QDIA).

The rulemaking process in this matter has evolved over several years. EBSA initially issued proposed regulations in November 2010 that would amend the QDIA rules to require fund providers to furnish an explanation of a target-date fund’s asset allocation, how that asset allocation changes over time (often called its “glide path”) and additional disclosures to participants. The Council filed written comments on the EBSA proposal in January 2011 after having testified at a joint DOL/Securities and Exchange Commission (SEC) hearing on target date funds in June 2009.

The SEC is undertaking a concurrent project to amend its advertising rules to require target date retirement funds' marketing materials to provide investors enhanced information about those funds. The SEC issued proposed regulations in June 2010 and approved a set of additional recommendations in April 2013. On April 9 of this year, the SEC requested additional comments on the proposal.  The SEC reopened its comment period to gather comments on the SEC Investment Advisory Committee’s recommendation that the disclosure should be broadened to include an analysis of a standardized measure of risk.  The DOL reopened its comment period to seek additional comments following the reopening by the SEC.

The Council’s July 3 letter commended EBSA’s careful approach to this product, given the widespread adoption of target date funds in defined contribution plans as QDIAs, particularly in conjunction with automatic enrollment programs.

Since the EBSA notice reopening the comment period was not specific with respect to any new proposals it might be considering, the Council’s letter strongly cautioned the agency against proceeding directly to final regulations, noting that a re-proposal and comment period “would be necessary if the Department is interested in a disclosure based on a standardized measure of risk.” The Council also expressed concerns that risk-based disclosure could be misleading or misunderstood by participants.  

For more information on target date fund regulation, contact Jan Jacobson, senior counsel, retirement policy, at (202) 289-6700.



Reminder: Council Webinars May Be Used for Continuing Education Credits

The American Benefits Council is now an approved program sponsor for a number of organizations that require their members to earn continuing education credits. Council webinars may be used toward continuing education/renewal requirements for many professional accreditation programs, but only by means of self-certification.

Organizations accepting Council webinars currently include the International Society of Certified Employee Benefits Specialists (ISCEBS) and the Missouri Bar Association. In the case of the Missouri Bar, it cooperates with bar associations in a number of other states (including Alaska, California, and Colorado) to give continuing legal education credit for lawyers maintaining bar membership but not currently practicing in that particular state.

Council staff is continuing to identify as many groups with legal, accounting, actuarial, and benefits backgrounds to which we can reasonably apply for program sponsor approval. Please note that some organizations have requirements not within our resources to accommodate. However, we are happy to pursue all requests to expand this program.

Depending upon the individual organization’s requirements, the usual information required for self-certification includes verification from the Council that you attended a particular webinar. To do this, please complete the full RSVP process for each session you plan to attend. Completed registrations generate a confirmation e-mail to your inbox that also includes your access information for the webinar. Please retain your registration confirmation for your verification records. Following the session, the Council also reconciles attendance and at any time you are welcome to request an attendance report, an example of which could be:

First Name

Last Name

Meeting

Your

Name

07-24-14 P4P: Excise Tax on High-Cost Plans

Your

Name

06-25-14 Benefits Briefing: Mortality Tables & Retirement Plans

Your

Name

05-22-14 P4P: Employer Reporting Requirements

 

Various organizations will also require you to submit descriptions of the individual programs detailing the subjects covered, featured speakers, and time allotted for the discussion. These summaries are always available in our webinar archive by clicking on the hyperlinked title of each program.

For more information or assistance in obtaining an attendance report, contact Deanna Johnson, director, membership, at 202-289-6700.



NOTE: This Benefits Byte was also sent in our old format via Outlook.

You will likely receive multiple versions. If this version is erroneously routed to a SPAM filter or blocked by a firewall, please (1) consult with your technical support staff or (2) ask us to assist you with ensuring your system will accept emails from our new “send-from” address. For more information, contact Jason Hammersla, senior director, communications, at (202) 289-6700.



The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council's members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.

Notice: the information contained herein is general in nature. It is not, and should not be construed as, accounting, consulting, legal or tax advice or opinion provided by the American Benefits Council or any of its employees. As required by the IRS, we inform you that any information contained herein was not intended or written to be used or referred to, and cannot be used or referred to (i) for the purpose of avoiding penalties under the Internal Revenue Code, or (ii) in promoting, marketing or recommending to another party any transaction or matter addressed herein (and any attachment).