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.
Reported by

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.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

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In Notice 2016-57, the agency noted that it is anticipated that the final regulations will not be published in time for plan sponsors to make plan design decisions based on the final regulations before expiration of the latest relief provided.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

Products September 21, 2016

Vestwell Introduces Fiduciary, White-Labeled Retirement Platform

The platform gives financial advisers the ability to better service employers and employees, the company says.
Reported by

Vestwell has introduced what it says is the industry’s first and only full-fiduciary, white-labeled retirement platform for the registered investment adviser (RIA) community.

Vestwell’s turnkey solution modernizes the traditional 401(k), 403(b), and defined contribution solutions by combining the best parts of automated investing with the human touch of trusted advisers, the company says. The full product suite includes investment services, trading, administration, custody, recordkeeping, and trustee services.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

The recent U.S. Department of Labor’s “conflict of interest” rule changes the way investment advisers will have to run their firms. Vestwell would assume 3(38) and 3(16) fiduciary responsibility which ultimately will reduce both financial cost and legal liability, the firm says. 

“Retirement savings is a $25 trillion market opportunity which we think is still best served by financial advisers. Vestwell’s mission is to provide advisers with a modern platform which reduces fees, increases transparency, and ensures compliance in a quickly shifting regulatory landscape,” says Aaron Schumm, founder and CEO of Vestwell. 

More information may be found here.

«