401(k) Plan Fiduciaries – Have you thought about your continued offering of the PIMCO Total Return Fund?

The abrupt departure of Bill Gross from PIMCO leaves many investors pondering their next move.  Should an investor stay the course and see how PIMCO’s new investment team performs?  Should an investor leave and follow Mr. Gross to Janus Funds?  Should an investor rush to find a new bond fund manager?

These questions are particularly important for fiduciaries of 401(k) and other qualified retirement programs that offer PIMCO Total Return Fund as an investment option.  Mr. Gross was the lead manager of the Total Return Fund, which reportedly is the second largest bond fund in existence and is a very common and popular choice for 401(k) and other defined contribution retirement plans. Read More ›

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IRS Issues Guidance on Longevity Annuities

The IRS recently issued guidance on the use of longevity annuities in defined contribution plans and IRAs.  These longevity annuities are known as “qualified longevity annuity contracts” or “QLACs.”

A QLAC is a deferred annuity that begins at a specified age, but not later than age 85.  This type of annuity allows individuals to have a guaranteed stream of payments beginning after the annuity starting date and continuing for the individual’s life.  A QLAC is intended to help individuals hedge against outliving their retirement benefits.

Plans that may offer QLACs

Employer sponsored defined contribution plans including Section 401(k) plans, Section 403(b) plans, government sponsored Section 457(b) plans and IRAs may provide for the purchase of a QLAC in the plan or IRA. Read More ›

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Complying with the Windsor Decision: Mid-Year Amendment for Safe-Harbor 401(k) Plans

Previously, the IRS issued guidance on what employers need to do in order to comply with the United States v. Windsor decision. The guidance insturcts employers on how and when to amend a qualified retirement plan if its current terms regarding marriage and the definition of spouse are inconsistent with Windsor.  In short, the employer must adopt an amendment by December 31, 2014 that is consistent with the Windsor decision.  Please see IRS Notice 2014-19, Anne Meyer’s blog post, and Nancy Campbell’s blog post for more information on the Windsor decision and the required amendment.

One question that was left unanswered by the IRS’s prior guidance on Windsor was whether a Section 401(k) or 401(m) safe-harbor plan could adopt a mid-year amendment without risking its safe-harbor status.  Read More ›

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