Products September 21, 2016

Cybersecurity Defense from Schwab Advisor Services

The firm announced availability of a new suite of resources and tools to help independent financial advisers develop, strengthen and maintain their cybersecurity defense. 
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A new cybersecurity defense program from Schwab Advisor Services promises to help financial professionals stay up-to-date on cyber-attack trends, regulatory developments and best practices for educating employees and clients about keeping data secure.

As part of its offering, Schwab is also releasing “action-oriented” tools to guide advisers through the cybersecurity planning process, available through a new online Cybersecurity Resource Center.

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According to the firm’s research, the new cybersecurity initiative comes at a time when preventing cyber-attacks is top of mind for the advisory industry, with almost 90% of independent financial professionals pointing to “cybersecurity, privacy and identity theft” as their top compliance concern for 2016.

Schwab’s Cybersecurity Resource Center features educational materials to guide advisers through the process and offers the opportunity for one-on-one consulting for firms with more complex needs. The content aligns with the National Institution of Standards and Technology (NIST) framework, which the Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) have encouraged.

More information is available at www.aboutschwab.com. 

Compliance September 21, 2016

Nondiscrimination Relief for Closed DBs Extended Again

The relief is available for plan years beginning before 2018, if certain conditions are satisfied.
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The Internal Revenue Service (IRS) is extending the temporary nondiscrimination relief for closed defined benefit (DB) plans by making that relief available for plan years beginning before 2018, if certain conditions are satisfied.

In December 2013, the IRS released Notice 2014-5, which permitted certain employers that sponsor closed DB plans and also sponsor a defined contribution (DC) plan to demonstrate the aggregated plans comply with the nondiscrimination requirements of Internal Revenue Code Section 401(a)(4) on the basis of equivalent benefits, even if the aggregated plans do not satisfy the current conditions for individual testing on that basis. Last year, the IRS extended the relief for an additional year by applying that relief to plan years beginning before 2017, if the conditions of Notice 2014-5 are satisfied.

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In January, the IRS proposed rules to help closed DB plans continue to satisfy minimum coverage and other testing requirements as grandfathered employees in the old system typically build seniority and become more highly compensated than younger workers entering the DC plan.

In Notice 2016-57, the agency noted that it is anticipated that the final regulations will not be published in time for plan sponsors to make plan design decisions based on the final regulations before expiration of the latest relief provided. That is why it is extending the relief for another year.

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