Products August 5, 2015

Millennium Trust Updates Web Capabilities

A new website offers remote access to rollover tools and resources from Millennium Trust. 
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The new website of Millennium Trust Co., at www.mtrustcompany.com, allows clients to remotely access agreements, tools and resources from the firm’s line of retirement account rollover solutions.

Through the enhanced website, clients can now “complete the automatic rollover process in three easy steps,” the company says. Clients can also download and read about current issues affecting the automatic rollover industry, while sharing important information with colleagues and business partners.

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Speaking with PLANADVISER, Terry Dunne, Millennium Trust senior vice president and managing director of the rollover solutions group, said retirement plans today “are not created for the benefit of a former employee. They’re really designed for the benefit of a current employee, so they have the right incentives to join a company and stay.”

He suggested that employers are eager for more rollover support from companies such as Millennium Trust (see “Is Auto-Portability the Next Big Thing?”). The main reason is that, when employees leave a firm but stay in the plan, they continue to cost the company administrative fees. They also remain a fiduciary concern for the plan sponsor.

“If you have 100 participants, and 20% to 25% of your employees are leaving in a given year, within four or five years, you’ve turned over the whole population and might well end up with more and more participants that are incurring costs,” Dunne observed.

He noted that Millennium provides bilingual, direct phone support. The phone support is critical, he feels, since most people do not like to use automated phone menus when making tough decisions about executing a rollover.

Compliance August 5, 2015

IRS Unveils Mortality Tables for 2016 Pension Funding

“The misery of uncertainty is worse than the certainty of misery,” commented one retirement industry expert, on the release of 2016 IRS static mortality tables. 
Reported by

Stewart Lawrence, national retirement practice leader for Sibson Consulting, notes sponsors of private pension plans in the U.S. “now have clarity that the IRS will not change the mortality basis used to calculate the 2016 funding requirement, nor [the assumptions] for minimum lump sum amounts that may be paid to participants in lieu of an annual annuity.”

This clarity comes after the Internal Revenue Service (IRS) published Notice 2015-53, which contains in full the updated static mortality tables for use in important defined benefit (DB) pension plan calculations for 2016.

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The IRS notice provides mortality assumptions “to be used for defined benefit pension plans under Section 430(h)(3)(A) of the Internal Revenue Code [IRC] and Section 303(h)(3)(A) of the Employee Retirement Income Security Act of 1974, Pub. L. No. 93-406, as amended (ERISA). These updated tables, which are being issued using the methodology in the existing final regulations under Section 430(h)(3)(A), apply for purposes of calculating the funding target and other items for valuation dates occurring during calendar year 2016.”

This notice also includes a modified unisex version of the mortality tables for use in determining minimum present value under Section 417(e)(3) of the IRC and Section 205(g)(3) of ERISA for distributions with annuity starting dates that occur during stability periods beginning in the 2016 calendar year.

“This allows plan sponsors to move ahead in crystallizing their funding and de-risking strategies on a basis similar to the current environment,” Lawrence adds.

Analysis of the impact of updated mortality numbers on DB plan sponsors and providers is here.

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