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News Items, by Subject

401(k) plans

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Fees Remain the Focus for DC Plan Sponsors
"More than 75% of sponsors calculated their DC plan fees within the past 12 months in 2018, although that is down from a high of 93% in 2013. Participants paid all investment management fees in more than three-quarters of plans, and nearly always paid a share of them. But the survey revealed a significant drop in the percentage of plans in which participants paid all administrative fees, from 63% in 2017 to 33% in 2018. Finally, slightly more than half of plan sponsors are likely or very likely to conduct a fee study in 2019." (Callan)
[Official Guidance] Text of 2018 Instructions for IRS Form 8915A: Qualified 2016 Disaster Retirement Plan Distributions and Repayments (PDF)
"Use 2018 Form 8915A if you were adversely affected by a 2016 disaster listed in Table 1 ... and you received a distribution that qualifies for favorable tax treatment.... Qualified 2016 disaster distributions can't be made in 2018. Only repayments of qualified 2016 disaster distributions can be made in 2018. You will use 2018 Form 8915A only if you are making the repayments over 3 years." (Internal Revenue Service [IRS])
Proposed Legislation Would Promote Student Loan Repayment Retirement Benefits
"[T]he Student Loan Act would open the door for student loan repayments to be treated as elective deferrals under an employer's plan and to qualify for corresponding matching contributions (rather than the special non-elective contributions described in [PLR 201833012]). In addition, the Student Loan Act would clarify nondiscrimination testing requirements for student loan repayment benefits and address how student loan repayment benefits may be provided under not only traditional 401(k) plans, but also under safe harbor 401(k) plans, 403(b) plans and SIMPLE plans." (McDermott Will & Emery)
Developing a High-Performance Retirement Plan Committee
"[1] Choose the right number of members ... [2] Appoint a Chairman and a Secretary ... [3] Utilize a Committee Charter and Committee Roster ... [4] Provide formal fiduciary training ... [5] Meet 2 to 4 times per year (but no less than annually) ... [6] Keep meeting minutes ... [7] Maintain a 'fiduciary file' ... [8] Purchase fiduciary liability insurance." (Greenspring Advisors)
[Opinion] SPARK Comment Letter to IRS on Proposed Hardship Distribution Regs (PDF)
11 pages. "By its terms, the Substantiation Memo only refers to the existing safe-harbor events. The IRS should expressly clarify that the substantiation guidelines described in the Substantiation Memo will cover the new safe-harbor event for expenses incurred as a result of federally-declared disasters and ensure that the Internal Revenue Manual is updated accordingly. This update should set forth what information and notifications the IRS would expect a plan administrator to collect and provide to substantiate the new seventh safe-harbor hardship event for expenses related to federally-declared disasters." (The SPARK Institute)
What to Do if You Missed Your RMD
"There is no effect on the prior year other than you have a potential 50% penalty.... [As] soon as you discover it, you should figure out the amount you were short or whatever the RMD that was missed, and take the makeup distribution immediately. Then, of course, take you regular distribution for the year so you stay on track. And then you report that on ... Form 5329.... [Y]ou must attach a statement saying two things: number one, that I made up the shortfall, you have to show good faith that whatever I missed, I took immediately upon discovery. Then give a short explanation of why, and IRS waives the penalty in almost every case." (Morningstar Advisor)
Considerations Before Maxing Out Your 401(k)
"Get an employer match.... Pay down high interest debt.... Create an emergency fund.... Avoid high-cost 401(k) plans.... Balance other savings goals.... Consider the tax savings." (U.S. News & World Report)
Restoring Lawsuit Winnings to an IRA
"An IRA owner sometimes has a claim against an investment advisor or a company for losses in connection with products or services provided to the IRA.... In the context of qualified plans, a recovery on a claim like this is allowed to be paid into the plan as a 'restorative payment' ... and as such the IRS does not consider it a contribution to the plan. Therefore, it is not subject to the rules and limits applicable to plan contributions. The IRS similarly has allowed IRA owners to contribute this type of recovery to their IRAs." (Morningstar Advisor)
The Do's and Don'ts of Your 401(k) Fund Lineup
"Develop a standalone menu of funds, which allows you to give participants the opportunity to develop a properly diversified portfolio on their own.... Remember that too many options can be confusing for participants and actually cause them to make poor decisions or no decision at all.... When designing the menu, make sure that decisions are made for the group collectively, not just the Committee members.... Be sure to review your fund lineup regularly. It doesn't make sense to make changes for the sake of making changes." (Conrad Siegel Actuaries)
[Opinion] American Benefits Council Comment Letter to IRS on Proposed Regs for Hardship Distributions
"The most critical issue raised by the proposed regulation that we ask the IRS to address as soon as possible is the need for confirmation that taxpayers may rely on the proposed regulation until a final regulation is published, and that any changes made in the final regulations that are more restrictive than the proposal will be applied prospectively only." (American Benefits Council)
[Opinion] Pension Rights Center Comment Letter to EBSA on Proposed Exemption Involving Retirement Clearinghouse, LLC (PDF)
"To better inform and protect participants we recommend that the conditions of the proposed exemption be more specific in several areas.... [A]ccount holders should be fully informed of their rights to place their accounts with another IRA provider or to cash out on demand ... [C]onsider imposing limits on some of the fees, particularly the monthly administration fee and the transfer and communication fees to be assessed after RCH identifies a new employer.... [I]nclude a statement that participant records must be maintained until the accounts are distributed ... [R]equire an appeals procedure for mistakes or disputes." (Pension Rights Center)
[Guidance Overview] IRS Issues Updated Eligible Rollover Distribution Notices
"The IRS recently updated its model notices in [Notice 2018-74] to include a number of significant changes in the law. There are two model notices, one for payments from a Roth account and one for payments not from a Roth account. Two changes addressed in the updated model notices apply to participants of most retirement plans, while others only apply to participants in certain governmental plans." (Frost Brown Todd LLC)
Boosting the Effectiveness of Retirement Plan Communications (PDF)
12 pages. "[T]he general public often misunderstands words that are commonly used by financial providers, employers and others in the retirement planning industry.... Even small tweaks can help break down complex ideas and make important financial information accessible to plan participants. Employers can support their participants by making their retirement communications easy to understand and free from jargon, then delivering them via the method of communication employees prefer." (Great-West Financial and Empower Retirement)
[Guidance Overview] IRS Proposed Regs Relax Requirements for Hardship Distributions
"The proposed regulations generally clarify or supplement recent statutory changes, including those made by the Bipartisan Budget Act of 2018. Except where noted, the rules and changes summarized herein also apply to plans of tax-exempt organizations under Section 403(b).... Except for the required elimination of the six-month contribution suspension as of January 1, 2020, plan sponsors generally will have flexibility with implementing the above changes after the proposed regulations are finalized." (McCarter & English)
Alight Solutions 401(k) Index Full Year 2018 Observations
"[P]articipants were very active during the year, with 46 days of above-normal daily transfer activity -- the highest number of above-normal days in the last five years, much higher than the 13 days of above-normal trading in 2017. On the other hand, net trades in 2018 amounted to only 1.42% of total plan balances, making 2018 a record low year for trading activity in the over 20-year history of the Index." (Alight Solutions)
401(k) Contribution Deadlines - You Don't Want to Miss Them!
"All 401(k) plan contributions have deposit deadlines -- and it's up to 401(k) fiduciaries to meet them.... [C]onfusion can easily lead to late contributions.... [C]onsequences for the employer ... range from mild (losing a tax deduction, making participants whole for lost earnings) to severe (plan disqualification, IRS and/or civil penalties).... [This article includes] a summary of the deposit deadlines applicable to all 401(k) plan contributions -- including how to correct late contributions." (Employee Fiduciary)
Who's Got My Beneficiary Designation ... or Who Lost It?
"When plans and participants were younger, it is likely that no one paid these important forms much attention -- after all, no one was going to die, right?! But, with the workforce aging and plans maturing, it will be increasingly important that designations are retained somewhere so that the participant's named beneficiaries get what is coming to them.... Here are a few ideas for making sure you have proper beneficiary information when it is needed[.]" (Ferenczy Benefits Law Center)
Will 401(k) Plan Sponsors Fall for These Over-Hyped Topics?
"[1] Student loans in 401(k) plans ... [2] Annuities in 401(k) plans ... [3] All-passive 401(k) plans ... [4] Financial wellness ... [5] On-line education." (Fiduciary News)
Are Cybercriminals Targeting Your 401(k)? (PDF)
"[S]teps you should take now to protect your 401(k) assets: [1] Check your account regularly.... [2] Use a unique and strong password.... [3] Beware of phishing scams ... [4] Avoid using public computers and public Wi-Fi networks ... [5] Never share your login username or password ... [6] Inquire with your 401(k) service provider or human resources department about the availability of advanced security measures." (Francis Investment Counsel LLC)
Four Critical ERISA Cases to Watch in 2019
"[1] Plan participants' role in retirement plan management put into question.... [2] Will the standard challenge finally make its way to the Supreme Court? ... [3] Courts grapple with which party must prove loss causation in a breach of fiduciary duty case.... [4] The [DOL]'s fiduciary rule meets its demise." (401K Specialist)
2017 Tax Law Change Provides Relief to Workers with 401(k) Plan Loans Who Lose Their Jobs
"[T]he Act defines the employment termination event that triggers the extended rollover period as a 'severance from employment.' ... [In] a situation in which a company sells some of its assets ... and transfers some of its employees to the buyer ... the transferred employees are in many instances doing the same work both before and after the transaction, ... with the potential implication that they did not really terminate employment, even though the transfer to the buyer's payroll means that their loans with the selling company's 401(k) plan are called." (Blank Rome LLP)
New Class Action Lawsuit Examines How a Common Definition of 'Compensation' Was Applied
"According to the complaint, the plan provided that participants could elect to make pre-tax and after-tax elective contributions, while the employer was required to make matching contributions ... equal to a percentage of a participant's compensation. Also according to the complaint, the plan defined 'compensation' to include certain post-termination payments ... The plaintiff then alleges that the plan fiduciaries re-interpreted the plan to exclude such bonuses in 2016, thus failing to take elective deferrals from such payments and not matching such deferrals." [Karlson v. ConAgra Brands Inc., No. 18-8328 (N.D. Ill., complaint filed Dec. 19, 2018)] (Groom Law Group)
[Opinion] American Benefits Council Letter to IRS Requesting Guidance on Retirement Plan Issues Related to Student Loan Repayments
"There has been some uncertainty about whether the conclusions reached in [PLR 201833012] were based in any way on the particular facts presented, such as the particular matching formula or the structure and timing of the true-up matching contribution.... For many [companies] the approach will create nondiscrimination and coverage testing problems, because the 'matching' contributions are technically nonelective contributions that must be tested separately for coverage and nondiscrimination. We believe that it is within the authority of Treasury and the IRS to address certain of these issues in guidance of general applicability." (American Benefits Council)
Market Downturn Could Accelerate 401(k) Recordkeeper Consolidation
"The 401(k) record-keeper industry is about to enter the third stage of the consolidation curve. While Stage 1 is about preserving first-mover advantage and Stage 2 is about acquisitions, Stage 3 is about ruthlessly attacking weaker competition.... The 38 national 401(k) record keepers ... are circling just five seats at the winner's table, according to the framework of the consolidation curve. Where does that leave the others? Eating scraps." (InvestmentNews)
A Fiduciary Focus: Steps 401(k) Plan Sponsors Should Resolve to Take in 2019
"[1] Outsource fiduciary liability ... [2] Remove all conflict-of-interest fees ... [3] Show employees how to take advantage of market volatility ... [4] Combine health and wealth wellness ... [5] Demonstrate the downside of leakage." (Fiduciary News)
[Guidance Overview] Changes in Hardship Withdrawal Rules for 401(k) and 403(b) Plans: What Plan Sponsors Need to Know
"The changes to these rules allow plan sponsors and participants more flexibility, as follows: [1] Six-month suspension of elective contributions is eliminated.... [2] No longer required to first take a loan.... [3] Participant representation of no available assets to satisfy need.... [4] Investment earnings can now be distributed.... [5] Safe harbor contributions, QNECs, and QMACs can now be distributed.... [6] Expanded list of 'immediate and heavy' financial needs.... [8] Documentation deadlines -- amendments and communication to participants.... [9] [S]ubstantiation of financial need." (Frost Brown Todd LLC)
Bill Would Allow Use of Retirement Plans to Provide Student Loan Repayment Benefits
"[Two U.S. senators] have introduced legislation that would allow 401(k), 403(b) and SIMPLE retirement plan sponsors to use their plans to provide student loan repayment benefits to employees. The Retirement Parity for Student Loans Act would permit these plan sponsors to make matching contributions to workers as if their student loan payments were salary reduction contributions.... The benefit cannot be provided to workers who are not eligible to participate in the retirement plan." (PLANSPONSOR)
[Guidance Overview] IRS Issues Proposed Regulations to Relax 401(k) Plan Hardship Distribution Rules
"All plan revisions related to the proposed regulations will be treated as 'integrally related' to the required change to the six-month suspension rule, so there will be only one plan amendment deadline for all plan changes, even those that are optional. Based on the proposed regulations, and required adoption deadlines set forth in IRS guidance, this means that plan amendments for both governmental and non-governmental plans to implement the changes will not be required until 2021, at the earliest." (Hanson Bridgett LLP)
New 401(k) Legislation Could Bring Big Changes For Retirement Savers
"H.R. 88 ... would allow any participant to convert their retirement savings into a stream of income.... H.R. 4524, titled 'Retirement Plan Simplification and Enhancement Act of 2017' ... [includes] a lifetime income portability option. Under the portability option, participants can avoid early withdrawal penalties and taxes of a discontinued sponsored plan by moving their funds to another plan." (Forbes)
2019 Trends for Retirement Plan Sponsors
"[1] Increased focus on non-savers ... [2] Locating 'missing' participants ... [3] The reemergence of MEPs ... [4] Focus on recordkeeper value vs. cost ... [5] Re-acquaintance with hardship distributions." (Cammack Retirement Group)
[Guidance Overview] New Flexibility for Hardship Withdrawals: Permissive Changes Starting in 2019 and Required Changes by 2020
"Plan sponsors should begin considering whether they want to make the changes that are permitted, but not required, by the new rules. The plan sponsor will need to make that decision quickly and work closely with their third party administrator to implement the change and communicate it to participants.... For those plan sponsors that currently use the six-month contribution suspension, work should begin sooner than later on the changes needed to eliminate the suspension, and to implement the required employee representations contemplated by the Proposed Regulations, by no later than 2020." (K&L Gates)
Litigation Lessons for 401(k) and 403(b) Fiduciaries: Apply These in 2019
"[1] Your process matters.... [2] Put it in writing.... [3] Know and review your options.... [4] Understand target date funds.... [5] Benchmark plan fees ... [6] Retain an expert to help you.... [7] Consult outside counsel when necessary.... [8] Hold regular committee meetings.... [9] Review your providers.... [10] Schedule regular RFPs." (Cohen & Buckmann, P.C.)
How to Manage Your 401(k) Plan in a Time of Market Volatility
"For most people with 401(k) retirement plans, stock market volatility is taking its toll.... [R]ecent dips may feel like serious threats to one's retirement plans. But investment professionals suggest that rebalancing one's account is as radical a change as one should make.... That may be hard to hear at the moment for those experiencing 'account balance trauma.' But, despite the fact that the majority of 401(k) participants have exposure to equities, only around 8 percent are all in on stocks ... And if they have been keeping up with their accounts, they may just be closer to flat than seriously down." (Born2Invest)
DOL Private Pension Plan Bulletin: Abstract of 2016 Form 5500 Annual Reports (PDF)
68 pages. "The total number of pension plans grew again in 2016 to approximately 703,000 plans, a 1.2 percent increase over 2015. The number of DC plans grew by 1.2 percent, while the number of DB plans in creased by 1.4 percent.... The number of 401(k) type plans increased yet again in 2016 by 2.5 percent, from 547,000 to 560,000. There were 67.1 million active participants in 401(k) type plans.... The share of DB plans reporting being fully frozen decreased to 19.9 percent of all DB plans; however, the amount of assets in fully frozen DB plans increased from 15.4 percent to 17.1 percent in 2016." [Also available: Data tables in XLSX and XML formats.] (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])
[Guidance Overview] IRS Issues Proposed Regs Amending Rules for Hardship Distributions
"The proposed regulations include the following changes: [1] Elimination of the six-month suspension requirement; [2] Elimination of the plan loan requirement; [3] Modifications to the list of hardship distribution events; [4] Addition of participant representation requirement; [5] Expansion of sources available for hardship distributions.... [T]he Treasury Department and IRS expect that plans will need to amend their hardship distribution provisions to reflect some or all of the changes in the proposed regulations." (Drinker Biddle)
The Impact of Automatic Enrollment
"[M]ore than 51% of 25-year-old participants investing in a plan were initially enrolled through an automatic enrollment default, potentially engaging participants who might not have invested in the plan otherwise.... [A] sizable segment of participants is starting average contributions at a minimal 3.3% rate and failing to take any action other than what the plan sponsor makes on their behalf in terms of subsequent increases." (J.P. Morgan Asset Management)
Replacing SIMPLE IRAs with a 401(k): Frequently Asked Questions
"In general, a 401(k) plan is the better choice when higher contribution limits and/or plan design flexibility are needed. When they're not, a SIMPLE IRA can be an excellent cost-saving alternative. That said, it's not uncommon for employees (or prospective employees) to view SIMPLE IRAs as inferior to 401(k) plans. This feeling can sometimes be overcome with education, but employee perception is something to consider when choosing between a SIMPLE IRA and 401(k) plan." [Article includes helpful chart of "pros" and "cons" for each type of plan.] (Employee Fiduciary)
No, Retirement Plan Participation Isn't Plummeting
"In 1979, roughly half of full-time workers reported being offered a retirement plan at work. In 2013, the figure was again about one-half. But from 2013 through 2016 reported retirement plan coverage dropped from 47% to 37%, with only a modest rebound to 38% by 2017.... What actually happened has very little to do with pension coverage and a lot to do with how we measure pension coverage." (Andrew Biggs, in Forbes)
What Makes a Reputable 401(k) Auditor?
"[1] Performs a reasonable amount of 401(k) audits per year, usually around 25 or more, but less may be sufficient based on the rest of [these] criteria ... . [2] Is a member of the Employee Benefit Plan Audit Quality Center (EBPAQC) through the [AICPA].... [3] Makes it a priority to have Continuing Professional Education (CPE) hours tailored toward employee benefit plan audits." (Pooler CPA Group, LLC)
40 Years On, 401(k) Contributions Climb to Record Levels
"As the 401(k) commemorates its 40th anniversary, ... employers are contributing an average of 5.1 percent of pay to their employees' 401(k) accounts ... This rate of contribution, combined with an average savings rate by participants of 7.1 percent, gives a total savings rate of more than 12 percent -- laying the foundation for better retirement outcomes, according to the 61st Annual Survey of Profit Sharing and 401(k) Plans." (Plan Sponsor Council of America [PSCA])
Reasons 401(k) Plan Sponsors Are Smiling
"While recent headlines play up the recent downturn of the market, it can't hide the fact we've seen tremendous growth in most investment for quite some time.... The average cost and fees of the average 401k plan are at their lowest ever in the history of the 401k plan! ... Beyond the 'auto' provisions, other elements have caused savings to increase." (Fiduciary News)
401(k) Contribution Limits 2019: What Employers Need to Know
"Compensation thresholds for Key Employees and Highly Compensated Employees have changed for the first time since 2015 ... This means potentially substantial changes to your ACP, ADP, or Top-Heavy nondiscrimination tests. Employees who counted as HCE's the tax year before may actually be NHCE's for your future testing." (ForUsAll)
What to Do with Retirement Plan Accounts After You've Left Your Employer
"Generally you cannot keep contributing to an employer-sponsored plan, such as a 401(k) or 403(b), if you have left that employer, but you do have several options when it comes to managing those savings going forward -- and they can all impact the size of your future nest egg.... [1] Do nothing ... [2] Roll into your current employer's plan ... [3] Roll into an annuity ... [4] Roll into an IRA ... [5] Cash out your retirement balance." (MassMutual)
The Proposed Hardship Distribution Regs: Some Misconceptions
"Plan sponsors are NOT required to eliminate the provision that borrowing be exhausted in order to take a hardship distribution ... Plan sponsors MUST eliminate the requirement to suspend elective deferrals for six months following a hardship distribution ... These regulations have no effect on 457(b) plans." (Cammack Retirement Group)
Missing Participants and Fiduciary Responsibilities: A Risk for TPAs
"[It] is important for plan sponsors to know that the DOL is taking demanding positions about fiduciary responsibilities for dealing with the issue of missing participants. As a result, TPAs should communicate with their plan sponsor clients about the DOL position, who has the responsibility for performing the searches required for missing participants, and what are considered to be reasonable search methods -- despite a lack of clear DOL guidance on the issue." (Drinker Biddle)
[Guidance Overview] Hardship Regs Revisited: Communications and Nonqualified Plans
"The proposed hardship regulations were silent as to whether a nonqualified deferred compensation plan can continue to cancel deferral elections following a hardship withdrawal. Considering that effective January 1, 2019, suspensions following hardship withdrawals will no longer be required, plan sponsors with nonqualified plans may wish to review the suspension language in their nonqualified deferred compensation plans[.]" (Morgan Lewis)
Ninth Circuit Upholds Dismissal of 401(k) Fee Case
"The court sided with defendants on one of the critical issues in current 401(k) fee litigation: whether a plaintiff may state a claim for breach of the ERISA duty of prudence merely by alleging that there was a less expensive, 'identical' alternative to the service/fund provider selected by plan fiduciaries.... The Ninth Circuit's most recent decision, ... while brief, included a pointed discussion of the critical issue[.]" [White v. Chevron Corp., No. 17-16208 (9th Cir. Nov. 13, 2018; unpub.)] (October Three Consulting)
Year-End Required Minimum Distribution Considerations
"If you have a RMD from a 401(k) plan, the RMD amount must be calculated separately. You cannot lump the amount together with another plan account or IRA.... RMD's are not eligible for a rollover.... If the account holder died during the year, the RMD must still be made." (Watkins Ross)
Challenges Too Many 401(k) Plan Sponsors Don't Consider
"[1] Understanding the extent of legal liability ... [2] Must proactively decide plan hardship provisions ... [3] Bad fees vs. Good fees ... [4] The link between employee financial fitness and company profitability ... [5] Don't know what they don't know." (Fiduciary News)
DOL Advisory Opinion Addresses Small Retirement Account Balance Auto-Portability Program
"The DOL explained that plan fiduciaries would be subject to ERISA's fiduciary standards -- and any associated liability -- when they opt to participate in the RCH Program under which plan accounts will be transferred to default IRAs.... [Advisory Opinion 2018‑01A] clarified, however, that neither the plan fiduciaries choosing to participate in the RCH Program nor the fiduciaries of the new employer plan that agrees to accept the roll-in transactions would be considered fiduciaries for purposes of the transfer of assets in the default IRA into the new employer's plan." (Buck)
401(k) Deposit Rules for Employers Demystified
"How to fix it if you broke the rules: [1] Make the deposit immediately ... [2] Make up for lost earnings ... [3] IRS corrective programs ... [4] Change your process (keep this from happening again)." (ForUsAll)
Latinos' Retirement Insecurity in the United States
"The retirement plan participation rate for Latino workers (30.9%) is about 22 percentage points lower than participation rate of White workers (53%). When a Latino has access and is eligible to participate in a plan, they show slightly higher take-up rates when compared to others races and ethnicities. For working Latinos who are saving, their average savings in a retirement account is less than one-third of the average retirement savings of White workers. Overall, less than one percent of Latinos have retirement accounts equal to or greater than their annual income." (National Institute on Retirement Security [NIRS])
IRS Issues Proposed Regulations on Hardship Distributions
"IRS clearly recognizes the administrative burden that some plans will face to implement system changes. Therefore, the IRS provides plan sponsors some flexibility in implementing the elimination of hardship suspensions as follows: [1] Plans may be amended to eliminate hardship suspensions on or after January 1, 2019. [2] The plan amendment may provide that all suspensions be immediately lifted (including for participants whose hardship suspension began in the second half of 2018)." (Findley)
Common 401(k) Plan Participant Misconceptions
"[1] I only need to contribute up to the maximum company match ... [2] It is OK to take a participant loan ... [3] I should stop making 401k contributions when the stock market crashes ... [4] Actively trading my 401k account will help me maximize my account balance ... [5] Target date funds are not good investments ... [6] Money market funds are good investments ... [7] A million-dollar 401k balance is enough." (Lawton Retirement Plan Consultants)
[Guidance Overview] Proposed IRS Regulations for Hardship Distributions Offer Welcome Guidance
"While the expansion of available sources for hardship distributions and the elimination of the requirement that a participant first take a plan loan are voluntary changes, the proposed regulations require that, for any hardship distribution made on or after January 1, 2020, a plan may not impose the six-month suspension of employee contributions as a condition of obtaining the distribution." (Pepper Hamilton LLP)
2019 Contribution Limits Are Up, and You Can Thank the IRS
"$500 may not seem like a lot. But it could lower your taxable income. (Every little bit helps, right?) Plus, if you already save the max amount, it's just $41.66 more per month to contribute the 'new' max in 2019.... Over the next 20 years, assuming a 6% annual return, you could have more than $18,000 more in the retirement nest egg you've built." (Principal Financial Group)
2018 End of Year Plan Sponsor 'To Do' List: Qualified Retirement Plans
Action Items for: [1] All qualified plans; [2] Section 401(k) plans; [3] Defined contribution plans (other than Section 401(k) plans); [4] Defined benefit plans; and [5] Section 403(b) plans. (Snell & Wilmer)
How Millennials Can Maximize Savings for Retirement
"Someone who consistently saves 10% of pay for 40 years should have enough -- combined with Social Security -- to maintain their pre-retirement living standard without a significant risk of going broke over the following 30 years ... But people who start saving 10 years after they've begun working and save for 30 -- rather than 40 -- years would have to set aside 20% annually to reach the same goal[.]" (The Wall Street Journal; subscription may be required)
[Guidance Overview] Proposed Hardship Withdrawal Regs Include Relief for Victims of Hurricanes Michael and Florence
"Retirement plans can provide this relief to employees and certain members of their families who live or work in disaster areas affected by Hurricane Michael or Florence and designated for individual assistance by FEMA. Currently, parts of Florida, Georgia, North Carolina and South Carolina are eligible.... To qualify for this relief, hardship withdrawals must be made by March 15, 2019." (Internal Revenue Service [IRS])
Lame Duck House Tax Proposal Includes Numerous Retirement Plan Provisions
"The Retirement, Savings, and Other Tax Relief Act of 2018, in addition to including several provisions related to employee benefits, extends various expiring provisions, contains disaster relief provisions ... includes special provisions for start-ups, and technical corrections to the Tax Cuts and Jobs Act of 2017. The legislation breaks no new ground; its provisions were included in either the Retirement Enhancement Savings Act of 2018 (RESA) or the Family Savings Act." (The Wagner Law Group)
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