Compliance September 21, 2016

IRS Extends Nondiscrimination Relief for Closed DBs

The IRS says final nondiscrimination rules will not be published in time for plan sponsors to make decisions before the last relief provided expires.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In Notice 2016-57, the agency noted that it is anticipated that the final regulations will not be published in time for plan sponsors to make plan design decisions based on the final regulations before expiration of the latest relief provided.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

Products September 21, 2016

Mutual of Omaha Launches Retirement Solution for Small-Market Plans

The retirement plan option built with SPDR exchange traded ETFs is designed to equip participants with individualized retirement strategies versus traditional target-date methods, the company says. 

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Mutual of Omaha Retirement Services announced that it has expanded its retirement platform with Stadion Money Management’s StoryLine 401(k) solution aimed at participants in adviser-sold, small-market plans. This solution uses SPDR exchange traded funds (ETFs).

According to Stadion, StoryLine’s Web interface allows participants to develop investment strategies based on their personal risk profiles, expectations and goals. At the employee’s discretion, StoryLine will also allow the inclusion of outside and spousal assets.

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“A common problem we see in the retirement landscape today is that many plan participants are asking for professional advice and tailored solutions but it’s simply not made available to them,” says John Corrieri, vice president of 401(k) at Mutual of Omaha Retirement Services. “StoryLine helps us give all of our plan participants the opportunities to prepare for retirement. This service enhances the customer-focused approach we’re known for and is filling an important void.”

Tim McCabe, senior vice president and national retirement sales director at Stadion adds, “We’re delighted that Mutual of Omaha has elected to make StoryLine available on its platform. They see in this solution precisely what we set out to develop—a democratization of the retirement planning process so that all participants have access to the best solutions and advice available.”

Stadion Money Management is an independent firm with a proprietary money management process focused on minimizing risk and participating in up markets through investments in ETFs. As of June, the firm managed approximately $3.6 billion. 

More information about StoryLine can be fund online here. 

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