Compliance November 19, 2015

IRS to Give Employee Plans Examinations Update

The agency will share examination program priorities for the new year, among other things.
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The Internal Revenue Service (IRS) is hosting a free webcast about the latest activities in Employee Plans Examinations.

Attendees will learn about:

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  • Examination program priorities for the new fiscal year;
  • Form 5500 Series return errors and how to avoid them;
  • Recurring errors found in 401(k), 403(b), large case, and multiemployer plans;
  • Hot topics and issues in Employee Plans today; and
  • The recent EP Compliance Unit projects and summaries of completed projects.

The webcast is December 8 at 2 p.m. Eastern. Interested individuals can register for the event here. 

Administration November 19, 2015

Pension Annuity Buy-Out Acceleration Continues

Trends show more small and medium-sized companies are seeking pension buy-outs, LIMRA says.
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In the third quarter of 2015 U.S. group pension buy-out sales reached $3.2 billion, according to a LIMRA Secure Retirement Institute sales survey.

Following second quarter sales of $3.8 billion, this marks the first time consecutive quarters experienced $3 billion in sales.

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LIMRA says traditionally, pension buy-out sales tend to spike in the fourth quarter with far less activity in the first three quarters. In 2015, however, pension buy-out sales have eclipsed $8 billion for the first nine months of the year—a 415% increase over the $1.53 billion in sales for the first nine months of 2014. Sales in the first three quarters of 2013 totaled $1.43 billion, and sales in the first three quarters of 2012 totaled $1.42 billion.

“We’ve seen 195 new contracts so far in 2015, compared to 159 contracts in the first nine months of 2014,” notes Michael Ericson, research analyst for LIMRA Secure Retirement Institute.

Trends show more small and medium-sized companies are seeking pension buy-outs, LIMRA says. Years of low interest rates and increasing premiums charged by the Pension Benefit Guarantee Corporation (PBGC) has compelled more organizations to consider transferring their pension risk to a group annuity.

To date, 13 financial services companies provide group annuity contracts for this market.

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