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Distributions - misc

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How Skillful RMD Planning Can Sustain Retirement Portfolios
"[T]he mathematics of the RMD virtually guarantee that a portfolio cannot be liquidated within 45 years. The required minimum withdrawal may be inadequate to meet the needs of the retiree in the later years, but that is a different matter. On the other hand, the stipulated RMD may be more than the retiree needs to spend that year, so the excess above their needs can be reinvested into a taxable investment account -- or simply stuffed in a mattress!" (Financial Planning)
Strategies to Make the Most of Your Retirement Assets
"In the future, if the government has to increase taxes one of the first doors they may knock will be these type of accounts.... One strategy to review if standard deductions go up is the benefit of converting a portion of your qualified retirement asset to a Roth IRA.... Another option to avoid paying higher taxes in the future is to position a portion of your qualified money into a QLAC.... If tax rates go down and standard deductions increase; delaying your Social Security benefit could prove to be a solid long-term tax play." (Slott Report)
[Guidance Overview] IRS Publishes Audit Guidelines for Hardship Withdrawals from 401(k) and 403(b) Plans
"The IRS audit guidelines only relate to the documentation requirements that apply to safe harbor hardship withdrawals, but are likely to also be relevant to non-safe harbor hardship withdrawals." (Miller Johnson)
[Guidance Overview] New IRS Audit Guidelines for Safe Harbor Hardship Distributions
"[M]any third party administrators offer streamlined hardship withdrawal services and do not maintain source documents or summaries. Employers using such services should ask the third party administrator if it will be modifying its services in light of the new IRS guidance. If not, the employer should maintain summaries to meet the new guidelines in the event of an IRS audit." (Wilkins Finston Friedman Law Group LLP)
[Guidance Overview] IRS Clarifies Permissible Substantiation Procedures for Hardship Withdrawals
"[B]efore relying on an employee's summary of the underlying documents, the plan must first [1] notify the requesting employee of various items of information, and then [2] obtain both general information concerning the participant and his or her request and more specific information concerning the event cited as justifying the hardship withdrawal.... Plans that have been relying on employee self-certifications should certainly do so. By providing the appropriate notice and obtaining the specified information, such self-certifications may be continued." (Spencer Fane)
[Guidance Overview] IRS Provides New Guidelines for Documenting Hardship Distributions
"The memorandum requests that field agents follow a 2-step approach in determining if a hardship distribution was made on account of a deemed immediate and heavy financial need ... [If] the notification provided to employees in Step 1 or the information reviewed in Step 2 is incomplete or inconsistent on its face, the agent may ask for source documents from the employer or third-party administrator." (EisnerAmper)
[Guidance Overview] IRS Views on Self-Certification of Financial Hardship
"In cases where any participant has received more than two financial hardship distributions in a single plan year, the guidelines advise agents to request source documents supporting those distributions if a credible explanation for the multiple distributions cannot be provided.... [P]lan sponsors may wish to consider limitations on the number of financial hardship distributions that a participant may take or to apply a more stringent process for approving requests for financial hardship distributions where more than two requests are made in any plan year." (Benefits Bryan Cave)
[Guidance Overview] IRS Issues Substantiation Guidelines for Safe-Harbor Hardship Withdrawals
"Although the guidance does not have binding legal or regulatory effect, it nonetheless highlights what auditors of plans offering safe-harbor hardship distributions will be looking for ... and reinforces that plan administrators should be regularly reviewing their record retention practices. It also emphasizes the need for proper documentation and internal controls for such distributions, including, to the extent applicable, understanding between TPAs and employer plan sponsors regarding their respective roles in the review and documentation process, as well as the importance of substantiation before distributions are made." (McGuireWoods LLP)
[Guidance Overview] Fiduciary Rules and 401(k) Hardship Distributions: The Latest
"An interesting byproduct of the regulatory process over the past several years is that both advisors and plan-related clients have been sensitized to many of the issues addressed -- albeit sometimes clumsily -- in the fiduciary regulation. For example, should a plan require that its investment advisor act as a fiduciary, even if the regulation ends up not requiring this? If not, why would a plan want to retain someone who is not required to act in the plan's best interest?" (Ferenczy Benefits Law Center LLP)
[Guidance Overview] New IRS Guidance Makes Substantiating Hardship Withdrawals Easier (PDF)
"While not intended to be a statement of law, the memorandum provides IRS examiners with insight as to how to evaluate a plan's hardship withdrawal program. Most importantly, the memorandum provides plan sponsors an alternative, and much less burdensome, process to meet their hardship substantiation obligations." (Lockton)
[Guidance Overview] 401(k) and 403(b) Plan Hardship Distribution Substantiation: What Will the IRS Be Looking For?
"In order to avoid potential unpleasantries on audit, plans that use an electronic or streamlined hardship distribution request process will need to take certain steps. First, the employer or TPA must provide the employee notice ... Second, the summary of information must include, at a minimum, the information specified in the [two recently issued IRS] memoranda ... Third, if a TPA administers hardship distributions, it should provide a report to the employer at least annually that describes the hardship distributions made during the year." (Jackson Lewis P.C.)
[Official Guidance] Text of IRS Memo: Substantiation Guidelines for Safe-Harbor Hardship Distributions from Section 403(b) Plans (PDF)
"This memorandum sets forth substantiation guidelines for EP Examinations employees examining whether a section 403(b) plan safe-harbor hardship distribution is 'deemed to be on account of an immediate and heavy financial need' pursuant to Section 1.401(k)-1(d)(3)(iii)(B) of the Income Tax Regulations.... [The Feb. 23, 2017] 401(k) Memorandum and Attachment are also applicable to hardship distributions from section 403(b) plans[.]" (Internal Revenue Service [IRS])
[Guidance Overview] Recent IRS Guidance for Hardship Distributions
"The Guidelines indicate that if the employer or administrator received a summary of source documents ... the IRS examining agent should inquire whether the employer or TPA had provided a specified notification to the participant prior to making the hardship distribution. Three of the four items on that notice are tax-related items ... The fourth item requires the participant's agreement to preserve source documents and make them available on request to the employer or administrator, without specifying the consequences of the participant's failure to comply with his or her agreement." (The Wagner Law Group)
[Opinion] Why Planning Fees Should Be Payable from Retirement Accounts
"[If] the aim of tax policy is to facilitate better outcomes for consumers, it's worth acknowledging that the current framework unintentionally exhibits poor behavioral characteristics by limiting the ability of consumers to pay for long-term financial planning advice from accounts that are ear-marked for long-term goals (or forcing those financial planning fees to be bundled with [assets-under-management (AUM)] fees or product commissions that may not be practical or feasible in all situations)!" (Nerd's Eye View)
[Guidance Overview] IRS Issues Memorandum on Substantiation Guidelines for Safe-Harbor Hardship Withdrawals from 401(k) Plans
"Although the Memorandum is not formal guidance, it does provide information on what the IRS considers sufficient substantiation and documentation for a hardship withdrawal.... [T]he Memorandum does not address substantiation of non-safe-harbor hardship withdrawals, although the employer should consider applying these standards for any hardship withdrawal." (Sherman & Howard)
Using Income Data from IRS to Examine the Transition to Retirement
"[M]ost individuals do not experience a reduction in inflation-adjusted spendable income after claiming Social Security... Examining the five-year period from one year before individuals first receive Social Security retirement benefits to three years after, 81 percent of individuals had income, either directly or through a spouse, from employer retirement plans, annuities, or IRAs; and another 8 percent had a Form 1099-R (indicating a retirement account transaction, such as a rollover, that did not generate income), a Form 5498 (indicating IRA ownership), or both." (Peter J. Brady, Steven Bass, Jessica Holland, and Kevin Pierce, Via SSRN)
The Consequences of Overestimating Retirement Expenses
"The actuarial approach anticipates that many things will change each year, and the client and financial advisor will meet periodically (I recommend annually) to revisit and recalculate the plan to reflect those changes. Some financial advisors, however, doubt their clients will like the potential budget variability under the actuarial approach. But this variability can be managed using rainy day funds, transference of funds between spending buckets or by smoothing the actuarially calculated budget." (Ken Steiner, FSA Retired, in Advisor Perspectives)
[Guidance Overview] Guidance to IRS Examiners on 401(k)/403(b) Hardship Withdrawals
"[A recent IRS memo to EP employees] is a welcome glimpse into the IRS's view of what might be acceptable in lieu of obtaining actual documentation upfront.... [E]mployers/TPAs should consider whether they prefer to continue requesting source documentation or align their programs with the memorandum. A possible risk with the alternative approach is the participant misplacing or being otherwise unable to produce the source documentation if requested." (Seyfarth Shaw LLP)
[Guidance Overview] Are You Keeping the Right Documentation for 401(k) Hardship Distributions?
"[In a Feb. 23, 2017 IRS memorandum, Employee Plans (EP) Examinations employees] are directed to obtain 'source documents' such as 'estimates, contracts, bills and statements from third parties.' Second, EP employees are directed to obtain a summary of the information contained in the source documents. The summary should include certain notifications made to the employee before the hardship[.]" (Bradley Arant Boult Cummings LLP)
[Guidance Overview] IRS Offers Easier Option for Substantiating Hardship Withdrawals
"Prior informal guidance set out the IRS position that plan administrators must retain financial information and documentation to substantiate the need for a hardship distribution. The new IRS memorandum [provides that] a plan administrator may retain a summary of information contained in source documents. To rely on such a summary, the employee obtaining a hardship distribution must be provided a notice containing information specified in the IRS memorandum, such as the tax consequences of a hardship distribution and the participant's obligation to preserve source documents relating to the hardship." (Husch Blackwell)
Monte Carlo Analysis vs. the Actuarial Approach
"Many financial advisors utilize Monte Carlo analysis (MCA) to help their clients develop financial plans in retirement.... [T]here are several potential problems with MCAs and some of these problems can be mitigated if financial advisors: stress that 'Clients should understand planning is not a one-time occurrence', 'Emphasize the importance of ongoing planning', and 'Present information in more than one way.' " (Ken Steiner, FSA Retired)
The Impact of Decreasing Retirement Spending on Safe Withdrawal Rates
"The conventional method for evaluating safe withdrawal rates assumes that retirees maintain a stable standard of living through retirement in real (inflation-adjusted) dollars.... [C]onstant real spending is not particularly realistic for most retirees. Instead, various studies are finding that real spending actually declines throughout retirement, by as much as 1% to 2% per year. And compounded throughout retirement, this discrepancy between standard industry assumptions and actual retiree behavior may be underestimating the safe withdrawal rate." (Michael Kitces in Nerd's Eye View)
[Official Guidance] Text of PBGC Interest Rate Update for Benefits Payable in Terminated Single-Employer Plans, March 2017
"The March 2017 interest assumptions under the benefit payments regulation will be 1.25 percent for the period during which a benefit is in pay status and 4.00 percent during any years preceding the benefit's placement in pay status. In comparison with the interest assumptions in effect for [February]  2017, these interest assumptions are unchanged." (Pension Benefit Guaranty Corporation [PBGC])
IRA Annuities: Beware of Death Benefit Taxation
"When an immediate annuity is purchased inside an IRA, the contract and the account step out of the regular minimum distribution rules ... Instead, the IRA becomes subject to the special separate RMD regime that applies to defined benefit pension plans and 'annuitized' defined contribution plans." (Morningstar Advisor)
How Does the Level of Household Savings Affect Preference for Immediate Annuities? (PDF)
20 pages. "[P]eople at the bottom-and top-ends of the savings distribution (those with the least and most assets) are more likely to buy annuities than people in the middle of the savings distribution.... A large majority (70.2 percent) of the current Social Security recipient households receive at least three-quarters of their income in annuities from Social Security, employer-provided pensions, and other annuity contracts. The fact that most retirees are already highly annuitized might help explain the lack of demand for additional annuity income." (Employee Benefit Research Institute [EBRI])
Another Question is Answered in the Railroad Retirement Benefits Q&A Column
"Should I start my Railroad Retirement annuity at age 62 (with monthly payments for life at 70% of the monthly payments I would receive if I wait to start at age 66), or should I wait until age 66?" (Robert S. Kaufman on BenefitsLink)
How Much Retirement Savings Will You Need to Feel Financially Secure?
"[1] Are you planning for just yourself or for your household? ... [2] When do you (and your spouse) plan to retire and when do you (and your spouse) plan to commence Social Security benefits or other sources of income? ... [3] What is the standard of living that you and your spouse are trying to replace in retirement? [4] How will you address long-term care costs and other non-recurring costs? ... [5] What are your assumptions for future investment return on your accumulated savings, length of retirement planning period and future inflation? [6] Is your estimate based on today's dollars or future inflated dollars?" (Ken Steiner, FSA Retired)
Tax Dangers of Retirement Plan Distributions
"One of the easiest ways to develop a relationship with a revenue officer is for a taxpayer to cavalierly treat their retirement distributions.... [P]lan administrators will normally only withhold 20% of the federal tax (unless told to do otherwise).... [W]ith upper graduated tax rates of 25% through 39.6%, the 20% withholding may not be enough to cover the actual amount due.... [M]any taxpayers forget to consider the effects of state taxes.... [S]ome folks are under the impression that some or all of their distributions are tax-free." (EisnerAmper)
[Official Guidance] PBGC Interest Rate Summary, January 2017
"In response to feedback from practitioners and plan participants, PBGC reorganized and enhanced the material included in this monthly summary.... [This report provides], in one place, a summary of current interest rates that relate to various calculations required under Title IV of ERISA. PBGC posts this summary each month, as soon as all of the new information is available." [Chart includes January 2017 rates for ERISA 4022 Lump Sum Interest Rates and Variable-Rate Premiums, as well as Q1 Rates for ERISA 4044 Annuities, Late Premium Payments, and Late Withdrawal Liability.] (Pension Benefit Guaranty Corporation [PBGC])
[Official Guidance] Text of PBGC Interest Rate Update for Benefits Payable in Terminated Single-Employer Plans, February 2017
"The February 2017 interest assumptions under the benefit payments regulation will be 1.25 percent for the period during which a benefit is in pay status and 4.00 percent during any years preceding the benefit's placement in pay status. In comparison with the interest assumptions in effect for January 2017, these interest assumptions are unchanged." (Pension Benefit Guaranty Corporation [PBGC])
[Official Guidance] Text of IRS Publication 915: Social Security and Equivalent Railroad Retirement Benefits, for Use in Preparing 2016 Returns (PDF)
30 pages, dated Dec. 30, 2016. "This publication explains the federal income tax rules for social security benefits and equivalent tier 1 railroad retirement benefits.... This publication covers ... [1] Whether any of your benefits are taxable. [2] How much is taxable. [3] How to report taxable benefits. [4] How to treat lump-sum benefit payments. [5] Deductions related to your benefits, including a deduction or credit you can claim if your repayments are more than your gross benefits." (Internal Revenue Service [IRS], Social Security Administration [SSA], and U.S. Railroad Retirement Board [RRB])
[Official Guidance] Text of IRS Publication 575: Pension and Annuity Income, for Use in Preparing 2016 Returns (PDF)
43 pages, dated Jan. 4, 2017. "This publication discusses the tax treatment of distributions you receive from pension and annuity plans and also shows you how to report the income on your federal income tax return. How these distributions are taxed depends on whether they are periodic payments (amounts received as an annuity) that are paid at regular intervals over several years or nonperiodic payments (amounts not received as an annuity)." (Internal Revenue Service [IRS])
Another Call for a Paradigm Shift in Retiree Spending Budget Thinking
"Before you develop a spending budget for recurring annual expenses, you need to set aside assets for future expected non-recurring expenses, such as long-term care expenses, unexpected expenses and amounts desired to be left to heirs.... If you want to develop a recurring spending budget that is consistent with your retirement goals, you should spread the present value of your [income from other sources] over your expected retirement period, and add the result to your [strategic withdrawal plan (SWP)] amount for the year ... The simple answer for most individuals or couples, who don't live in a retirement researcher's artificial bubble, is to avoid SWPs." (Ken Steiner, FSA Retired)
How Long Do U.S. Retirees Live Compared to Peers in Other Countries?
"If you're an American retiree worried about outliving your savings, you may have an (unwanted) edge compared to retirees in other countries: U.S. retirees are expected to live shorter lives on average compared to citizens of most other developed nations.... [T]he U.S. ranks last or near last -- depending on the group being analyzed -- in one measure of life expectancy ... remaining life expectancy at age 65." (CBS MoneyWatch)
Squaring-the-Survival-Curve and Retirement Planning
"[W]hile overall life expectancies have been rising, most of the gains are attributable to people living closer to the maximum human lifespan (rising up towards about 115 years), and not as much from increases in the maximum age itself.... The significance ... is that retirement planning may need to adjust for a longer active phase of life... or more pessimistically, for prolonged periods of substandard health as what might have killed us in the past now simply slows us down!" (Michael Kitces in Nerd's Eye View)
Four Keys to Winning the Financial Security Game
"As individuals get close to retirement or reach retirement, their financial priorities generally shift somewhat. While they still must grow their assets (generally by investing them), they must also protect their (now presumably much more significant) assets to make sure that they last for the rest of their lives.... In addition to possibly investing their assets more conservatively than younger individuals, retirees and near-retirees will generally select different forms of insurance than younger individuals to protect against relevant risks." (Ken Steiner, FSA Retired)
Rise in Interest Rates Lowers the Cost of Retirement Income
"Today, investors are enjoying retirement income costs lower by as much as 14% versus a few months ago ... which helps investors estimate how much annual retirement income their current savings can generate starting at age 65." (planadviser)
Age-Banding Provides a Better Baseline for Retirement Planning
"Rather than assuming a stable standard of living throughout retirement, [a] growing volume of research looks more directly at not just the composition of a retiree's spending goals, but also at how expenses change as the retiree moves through different age bands. Projecting retirement expenses using an age-banding approach may allow for a more nuanced and accurate representation of how spending will change over time.... [R]etirees may not actually need to save as much or accumulate as large of a nest egg to retire in the first place." (Financial Planning)
Contingency Planning for Clients Relying on Pensions
"If the pension is funded at 85% or less, there could be cuts in the future to the cost-of-living adjustment, for example, or to health benefits. In cases like this, where the client's current retirement planning is based on receiving 100% of their pension income, build in contingency plans where the client relies only on as little as 85% of their pension." (The Wall Street Journal; subscription may be required)
Warning Labels Needed for Systematic Withdrawal Plans (SWPs)?
"SWPs assume that all non-recurring expenses in retirement, such as long-term care costs, bequest motives and unexpected expenses, will be funded through some other unspecified resources. SWPs aren't coordinated with income from other sources in retirement.... Even if income from other sources is relatively constant in real dollar terms over the retiree's lifetime planning period, adding the SWP amount to the income from other sources during a year may not produce a spending budget that is consistent with the retiree's spending objectives." (Ken Steiner, FSA Retired)
28% of Americans Are Making This Avoidable Retirement Mistake
"Saving for retirement is hard enough without shooting yourself in the foot. Unfortunately, over a quarter of Americans are doing just that.... 28% of Americans have taken a withdrawal from their workplace retirement plan -- usually a 401(k). That's a big mistake. Here's why." (Motley Fool)
[Official Guidance] Text of 2017 Instructions for IRS Forms 1099-R and 5498: Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, and IRA Contribution Information (PDF)
23 pages. "What's New: Report late rollover contributions certified by the participant in boxes 13a and 13b on Form 5498. Report the self-certification code in box 13c." (Internal Revenue Service [IRS])
Bill Would Eliminate Alabama State Income Tax on Most 401(k) Earnings
"Currently, retirement incomes from defined contribution plans such as 401(k)s are subject to state income tax. But Alabamians who have defined benefit plans -- including pensions from the state or federal government and the Tennessee Valley Authority -- are not taxed on their retirement income.... Once fully implemented in 2022, [the] proposal would cost the state's education budget about $109 million in tax revenue[.]" (
Should You Create a Trust to be the Beneficiary of Your IRA?
"While placing a discretionary trust as the beneficiary of the inherited IRA allows the owner of the IRA to provide 'post mortem control' over the beneficiary's access to funds, it may not produce a good income tax result. If the Trustee, using his discretion, decides to keep the IRA distribution in the Trust, i.e. not to make a distribution to the trust beneficiary, the IRA distribution is taxed at the Trust level instead of the beneficiary level. This decision may create a much larger tax." (WithumSmith+Brown, PC)
[Opinion] American Retirement Association Comments to IRS on Documentation for Hardship Withdrawals and Plan Loans (PDF)
"The ARA recommends the Service issue guidance to clarify the rules applicable to the substantiation and documentation requirements related to hardship distributions and participant loans.... The ARA recommends the Service issue guidance permitting a plan administrator ... to reasonably rely on the representation from the employee as to [certain] items, unless the plan administrator has actual knowledge or should have known from the surrounding facts and circumstances that the representation is untrue[.]" (American Retirement Association [ARA])
[Official Guidance] 2016 IRS Form 5329: Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts (PDF)
"If you only owe the additional 10% tax on early distributions, you may be able to report this tax directly on Form 1040, line 59, or Form 1040NR, line 57, without filing Form 5329. See the instructions for Form 1040, line 59, or for Form 1040NR, line 57." (Internal Revenue Service [IRS])
[Official Guidance] Text of IRS Proposed Regs: Update to Minimum Present Value Requirements for DB Plan Distributions
"The proposed regulations would update the existing regulatory provisions to reflect the statutory changes made by PPA '06, including the new interest rates and mortality tables set forth in section 417(e)(3) and the exception from the valuation rules for certain applicable defined benefit plans set forth in section 411(a)(13). The proposed regulations clarify that the interest rates that are published by the Commissioner pursuant to the provisions as modified by PPA '06 are to be used without further adjustment.... [T]he proposed regulations make conforming changes to reflect the final regulations under section 417(e) that permit defined benefit plans to simplify the treatment of certain optional forms of benefit that are paid partly in the form of an annuity and partly in a more accelerated form." (Internal Revenue Service [IRS])
Using Multiple 'Data Points' to Determine How Much You Should Spend
"[While] the development of a reasonable spending budget is an important part of an individual's spending decision process, it is but one 'data point' of several that may be considered.... [O]ther possible data points that may also be useful in your spending decision process[:] Applying the ABC ... The ABC with recommended assumptions ... ABC run-out tabs ... ABC 5-year projection tab ... Historical record ... Your gut instinct." (Ken Steiner, FSA Retired)
Treasury Department Rules Give Annuities a Boost
"The new rules apply to distributions with annuity payments starting in plan years beginning on or after Jan. 1, 2017, and are intended to encourage plans to offer hybrid distribution options that include an annuity ... First proposed in February 2012, the regulations are an attempt to balance retirees' need for longevity insurance through partial annuity payments with the increased liquidity provided by lump sum payouts." (
Focus on How Much You Can Spend During Retirement -- Not How Much You Can Withdraw
"The point of the exercise is to determine approximately how much you can afford to spend each year while meeting your financial objectives, not how much to withdraw. Sometimes adding the amount you can withdraw under these [rule of thumb] approaches to other income you may be receiving for a given year will give you something close to a reasonable spending budget for that year, and sometimes it won't." (Ken Steiner, FSA Retired)
[Official Guidance] Text of IRS Announcement 2016-39: Retirement Plan Distribution Relief for Victims of Hurricane Matthew (PDF)
"[A] qualified employer plan will not be treated as failing to satisfy any requirement under the Code or regulations merely because the plan makes a loan, or a hardship distribution for a need arising from Hurricane Matthew, to an employee or former employee whose principal residence on October 4, 2016, (October 3, 2016, for Florida) was located in one of the counties identified for individual assistance by [FEMA] because of the devastation caused by Hurricane Matthew or whose place of employment was located in one of these counties on that applicable date or whose lineal ascendant or descendant, dependent, or spouse had a principal residence or place of employment in one of these counties on that date. These counties identified for individual assistance by FEMA are in Florida, Georgia, North Carolina and South Carolina and can be found on FEMA's website ...

"Plan administrators may rely upon representations from the employee or former employee as to the need for and amount of a hardship distribution, unless the plan administrator has actual knowledge to the contrary, and the distribution is treated as a hardship distribution for all purposes under the Code and regulations ...

"[A] 'qualified employer plan' means a plan or contract meeting the requirements of Section 401(a), 403(a) or 403(b), and ... a plan described in Section 457(b) maintained by an eligible employer described in Section 457(e)(1)(A), and any hardship arising from Hurricane Matthew is treated as an 'unforeseeable emergency' for purposes of distributions from such plans....

"To make a loan or hardship distribution pursuant to the relief provided in this announcement, a qualified employer plan that does not provide for them must be amended to provide for loans or hardship distributions no later than the end of the first plan year beginning after December 31, 2016. To qualify for the relief under this announcement, a hardship distribution must be made on account of a hardship resulting from Hurricane Matthew and be made on or after October 4, 2016, (October 3, 2016, for Florida) and no later than March 15, 2017." (Internal Revenue Service [IRS])

[Guidance Overview] IRS Information Release 2016-138: Retirement Plans Can Make Loans, Hardship Distributions to Victims of Hurricane Matthew (PDF)
"Participants in 401(k) plans, employees of public schools and tax-exempt organizations with 403(b) tax-sheltered annuities, as well as state and local government employees with 457(b) deferred-compensation plans may be eligible to take advantage of these streamlined loan procedures and liberalized hardship distribution rules. Though IRA participants are barred from taking out loans, they may be eligible to receive distributions under liberalized procedures.... Currently, parts of North Carolina, South Carolina, Georgia and Florida qualify for individual assistance." (Internal Revenue Service [IRS])
Retiree Experiences Can Help Shape and Improve the Retirement Outlook for Future Generations
"Traditional pensions are a key component of income for retirees.... Pension replacement will be a key retirement planning issue.... Retirees love guaranteed lifetime income.... Retirees value professional financial advice.... Long-term care misconceptions are wide-spread ... The majority of retirees are not maximizing Social Security.... Retirees are not relocating en masse.... Retirement is more than a number." (Insured Retirement Institute [IRI])
Top Findings from IRI's New Research on Retirees
"Traditional pensions are a key component of income for retirees.... Pension replacement will be a key retirement planning issue.... Advisors need to help their clients think holistically.... Retirees love guaranteed lifetime income.... Retirees value professional financial advice.... Expect the unexpected in retirement.... Long-term care misconceptions are wide-spread ... The majority of retirees are not maximizing Social Security.... Retirees are not relocating en masse.... Advisors can add value by helping clients manage distributions effectively.... Retirement is more than a number." (Insured Retirement Institute [IRI])
[Guidance Overview] PBGC Proposed Regs Would Expand Its Missing Participant Program
"The PBGC proposes to completely redesign its existing missing participants program for single-employer DB plans and to adopt three new missing participants programs. The three new programs would be for multiemployer DB plans covered by Title IV, for professional service employer DB plans not covered by Title IV, and for most DC plans. All four programs would follow the same basic design." (Wolters Kluwer Law & Business)
When It Comes to Retirement Distributions, 401(k)s Lack Valuable Flexibility
"There's a key area where IRAs have a clear advantage over 401(k)s: in-retirement distributions. Simply put, investors who decide to leave money in their company retirement plans and draw from them to meet their living expenses typically have much less flexibility and control over withdrawals." (Morningstar)
Disability and the Exception to 10% Early Distribution Penalty
"Many people, both advisors and IRA owners alike, think that if they are receiving any sort of disability payment that they will qualify for this penalty exception. Unfortunately, that is not true." (Slott Report)
[Guidance Overview] IRS Finalizes Partial Annuity Regulation
"[If] a plan provides an early retirement benefit, a retirement-type subsidy, an optional form of benefit, or an ancillary benefit that only applies to part of the participant's benefit, then the plan must identify which portion of the participant's benefit is being paid as a lump sum. And, where the plan has eliminated an optional form but (because of Tax Code anti-cutback rules) preserved that eliminated optional form for part of the participant's benefit, then the plan must use the explicit bifurcation method." (October Three Consulting)
Senate Finance Committee Approves Bipartisan Pension Bills (PDF)
"[The Retirement Enhancement and Savings Act of 2016 (RESA) would].... [1] permit unrelated employers ... to pool their resources by participating in a new type of multiple employer plan, provided certain conditions are met.... [2] require employers to provide defined contribution plan participants with an estimate of the amount of monthly annuity income the participant's balance could produce in retirement ... . [3] create a new fiduciary safe harbor for employers who opt to include a lifetime income investment option in their defined contribution plan.... [4] allow earnings on elective deferrals, qualified non-elective contributions and qualified matching contributions under a 401(k) plan to be distributed on account of hardship.... [5] increase the penalties for failing to file a Form 5500 and failing to provide a required withholding notice to $100 per day[.]" (Groom Law Group)
Expanded Distribution Options Next Step in DC Plan Design
"Employers are considering adding distribution options to their defined contribution plans in response to demands from employees for retirement income security ... Options such as installment payments, periodic withdrawals or annuity payments could enhance retirement income security more than the all-or-nothing approach of a full withdrawal of amounts from the plan ... Plan sponsors also stand to benefit from keeping more of the participants' assets in the plan." (Bloomberg BNA)

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