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OregonSaves Serves as a Test for State-Sponsored Auto-IRAs
"Ascensus ran a series of pilot programs in 2017 ... [which] started with 11 employers for the first pilot in July and expanded in subsequent pilots.... Businesses with 100 or more employees were required to register by Nov. 15. Phased-in registration deadlines for smaller employers [follow] ... Employers that fall under the mandate will need to facilitate contributions, complete an enrollment process and provide data on participating employees ... There is also a notice requirement that employers need to meet." (Society for Human Resource Management [SHRM])
Tax Reform: Side-by-Side Comparison of Employee Benefit Provisions of House and Senate Bills
"The House initially took a heavy hand to many favorable executive compensation provisions and made some important changes in the retirement and welfare areas, but the House Ways and Means Committee relented a bit. The Senate Finance Committee proposal, as modified ... followed suit in its approach to executive compensation." (Seyfarth Shaw LLP)
Another Question is Answered in the Who's the Employer Q&A Column
"Question: What is the rule for counting service prior to becoming a member of related group? Answer: Count it. That's as simple as it gets. There are folks who disagree with me on this, so let's take a moment and see if we can't narrow our disagreement. Let me provide an example we can analyze ..." (S. Derrin Watson, on BenefitsLink)
Tax Reform Legislation Moves Through the House and Senate (PDF)
"[Both bills] contain several provisions that would change the tax rules with respect to retirement plans, executive and nonqualified deferred compensation (NQDC') arrangements, employee fringe benefits, and health and welfare plans. [Includes a link to a] side-by-side summary comparing the retirement, executive compensation, fringe benefit, and health and welfare provisions in the House and Senate bills[.]" (Groom Law Group)
Senate Finance Committee Releases Text of Committee-Approved Tax Bill
Documents pertaining to the Tax Cuts and Jobs Act, as passed by the Senate Finance Committee: the text of the bill, a section-by-section description of the bill, and the Joint Committee on Taxation's score of the bill. (Committee on Finance, U.S. Senate)
New Mortality Tables for 2018: The Wait for IRS Guidance Is Over
"The new mortality tables will increase liabilities from 3% to 5% for lump sum distributions. For calendar year plans, 2017 would be the last year to terminate a Plan and/or pay lump sums under the old, less expensive mortality tables." (Markley Actuarial)
[Official Guidance] Employee Stock Ownership Plan (ESOP) LRM and Information Package, October 2017 (PDF)
43 pages. Oct. 2017, published online Nov. 2017. "This information package contains samples of plan provisions that satisfy certain requirements of the Code applicable to ESOPs. Such language may or may not be acceptable in specific plans depending on the context in which used. To expedite the review process, plan sponsors are encouraged to use the language in this package. A partnership or a joint venture is not eligible to maintain an ESOP. However, a partnership or a joint venture that has elected to be taxed as a corporation may be a Participating Employer as defined in this ESOP LRM." [Editor's note: the Oct. 2017 revision appears to replace the version released in June 2015.] (Internal Revenue Service [IRS])
Roth IRAs: Favored for Annual Contributions, Neglected for Rollovers from Company Plans
"The tax on moving funds into a Roth IRA may be sharply reduced by making a series of partial rollovers ... [which] can prevent the taxable income on conversions from piling up into higher tax brackets. Converting just 5% or 10% of plan funds every year can convert them all over time with minimum income tax cost." (Slott Report)
How the Senate Finance Committee's Tax Reform Bill Would Impact Retirement Plans
"Elimination of IRA 're-characterization' ... Extension of time to roll over plan loan offsets ... Elimination of special 403(b) and 457(b) catch-up rules ... Coordination of 403(b) and 457(b) contribution limits ... Elimination of 403(b) contributions for former employees." (J.P. Morgan Asset Management)
Tax Reform and Accumulated Leave ('Special Pay') Plans
"The proposed Senate tax reform bill ... eliminates the ability of 403(b) plans to accept contributions for former employees for up to five years following termination of employment.... The result will be greater employment taxation on the employer and former employee, and more immediate income taxation on the employee." (Carlton Fields)
Younger Workers Expect to Mostly Fund Their Own Retirement
"[W]orkers aged 25 to 37 expect that 65% of their retirement income will come from their own savings and other personal sources, as opposed to just Social Security. Older generations, meanwhile, continue to be more reliant on those benefits ... [T]hat 65% figure ... is pretty on-target, assuming Social Security doesn't face sizable cuts in the future." (Fox Business)
Comparing Small Law Firm 401(k) Plans: Fees, Matching, and the Best States to Work In
"Here's key information, broken down by state, of small firm 401(k) plans ... D.C.'s $9K average employer contribution [far exceeds] even the nearest competition (Montana and Oregon). Coincidentally, Small Law employees in D.C., Montana, and Oregon also have the highest average contributions overall suggesting -- as one would expect -- that a good matching program encourages employees to contribute too." (Above the Law)
[Official Guidance] Cash or Deferred Arrangement LRM and Information Package, October 2017 (PDF)
43 pages. Oct. 2017, published online Nov. 2017. "This information package contains samples of plan provisions that satisfy certain specific requirements of the Internal Revenue Code... Note that these CODA LRMs assume the plan will permit catch-up contributions (defined in Code Section 414(v)) for participants age 50 and over and Roth Elective Deferrals (defined in Section 402A)." [Also online: 45-page red-lined version showing changes from the previous (October 2011) version.] (Internal Revenue Service [IRS])
2017 Global Benefits Attitudes Survey
"Employees ... with choice and flexibility today are twice as likely to feel their benefit program meets their needs.... More than one-fifth of employees expect to still be working at age 70 or later. Over 60% say their employer retirement plan is their primary means of saving for retirement. Employees look to their employers for support in improving their health and well-being, and becoming more financially secure. Although companies are responding with programs that support physical, emotional, financial and social well-being, ... [e]mployee engagement in well-being programs remains low. Employers could likely boost engagement by designing programs that leverage the workplace environment and promote the use of new technologies." (Willis Towers Watson)
[Guidance Overview] Puerto Rico Treasury Department Finally Grants Relief to Participants Affected by Hurricane Maria (PDF)
"After a long and tumultuous process, and 56 days after Hurricane Maria hit Puerto Rico, the Puerto Rico Treasury Department issued Administrative Determination No. 17-29 to grant relief on eligible distributions (including hardship withdrawals) and plan loans by participants in Puerto Rico tax qualified retirement plans who were affected by Hurricane Maria." (Groom Law Group)
Senate Tax Bill Revisions Kill ACA Individual Mandate, Preserve Current Retirement and NQDC Contributions
"Unlike the House version, the Senate bill, as amended, would effectively repeal the [ACA's] individual mandate ... Like the House tax bill, the Senate version now keeps pretax retirement contributions to 401(k) and similar plans intact.... Senate Republicans added an employer credit for paid family and medical leave to the bill.... [By] Nov. 15 the NQDC provision was gone from the revised mark-up of the bill." (Society for Human Resource Management [SHRM])
Do Consumers Believe in Debt After Retirement?
"Debt levels for those aged 65-80 increased 40 percent from 2003-2015 ... While two-thirds of consumers see mortgage debt during working years as 'good' debt, only 4 in 10 feel the same about it in retirement. Two-thirds of consumers don't think people should carry mortgage debt into retirement." (LIMRA)
Participants Say More Information About Plan Investment Fees Would Be Useful
"[N]early seven in 10 survey respondents in employer-sponsored retirement plans said they were at least somewhat familiar with their plan's fees, while 31% were not at all familiar with the fees. Roughly two-thirds had not read any investment fee disclosure in the previous year.... Of the one-third who had read a fee disclosure, nearly seven in 10 said they found the information understandable ... Roughly four in five participants said it would be at least somewhat useful to have additional information about investment fees." (PLANSPONSOR)
JCT Correction to the Description of the Chairman's Modification to the Chairman's Mark of the Tax Cuts and Jobs Act
"As previously published [on Nov. 14], the description of the modification to the Chairman's mark contained a misprint of certain calculations in the rate tables. Printed [in this document] is the correct table. [JCT has] highlighted those numbers that have been corrected from the prior version." (Joint Committee on Taxation [JCT], U.S. Congress)
Is a Change in MEP Rules Imminent?
"On November 14, [OMB] received from the DOL a proposed rule which would broaden the definition of employer under ERISA to allow more businesses to join association health plans.... [The DOL's position in Advisory Opinion 2012-04A was] that it had no authority to redefine [the] historical definition of employer it developed for MEWA purposes merely for retirement plan purposes, that it was bound by the statute to apply the same 'employer' definition to both health plans and retirement plans. Does this mean that the new proposed definition of 'employer' will, necessarily, by operation of statute, be expanded for retirement plan purposes as well?" (Business of Benefits)
401(k) and 403(b) Contributions Still on the Chopping Block
"Here's what is now under consideration: [1] The maximum catch up contribution would be increased to $9000, but catch up contributions would have to be made on a ROTH basis.... [2] No catch up contributions would be permitted for employees earning more than $500,000. [3] Catch up contributions for pre-retirees and long service employees under 403(b) and 457 plans would be eliminated. [4] Special post-termination employer contributions for 403(b) plan participants would be eliminated. [5] The rules permitting contributions to a 457(b) plan in addition to maximum 401(k) and 403(b) contributions would be eliminated." (Cohen & Buckmann, P.C.)
Defined Benefit Plans: 10 New Definitions for 2018
"As changes occur in the defined benefit plan landscape, our business language needs to keep up.... Outdated terms may lead to excessive risk taking and time wasted on short-term issues that have little or no bearing on pension plan success. These new definitions can help improve how sponsors, consultants and managers address pension plan challenges as we head into 2018." (Willis Towers Watson)
Description of the Chairman's Modification to the Chairman's Mark of the Tax Cuts and Jobs Act
103 pages. "Scheduled for markup before the Senate Committee on Finance on November 15, 2017 ... The Chairman's modification strikes the following proposals: [1] Item III.H.1, Nonqualified deferred compensation, [2] Item III.K, Determination of worker classification and information reporting requirements, [3] Item III.M.2, Application of 10-percent early withdrawal tax to governmental section 457(b) plans, and [4] Item III.M.3, Elimination of catch-up contributions for high-wage employees." [Also available: Estimated revenue effects of these modifications.] (Joint Committee on Taxation [JCT], U.S. Congress)
Senate Tax Proposal Could End Feds' Catch-Up TSP Contributions
"The chairman's retirement savings amendment ... would increase the maximum catch-up contribution that all employees age 50 and older can make to their 401(k), 403(b) or 457(b) retirement savings plans in a given year from $6,000 to $9,000, but would require those contributions to be made to Roth plans only ... This would affect federal employees age 50 and older who make such extra payments to the TSP[.]" (Government Executive)
Cost-of-Living Adjustments in State and Local Government Pension Plans (PDF)
16 pages, Nov. 2017. "Cost-of-living adjustments (COLAs) in some form are provided on most state and local government pensions.... Considerable variation exists in the way COLAs are designed, and in many cases they are determined or affected by other factors, such as inflation or the condition of the plan.... This brief presents a discussion about the purpose of COLAs, the different types of COLAs offered by government retirement systems, and an overview of recent state changes to COLA provisions." (National Association of State Retirement Administrators [NASRA])
[Opinion] Tax Reform Would Put Your Retirement at Risk, Change Rules for Deferred Comp
"Although the House Ways and Means Committee announced ... it has removed from its version of the bill Section 3801, which would have dismantled and destroyed nonqualified deferred compensation, the Senate has yet to follow suit. As the proposed changes currently stand, the Senate's Tax Reform bill will increase taxes on employee savings, radically change compensation policies and reduce the capability of U.S. employers to compete for talented workers....Changing 409A will change how people save, how executives are paid, and how businesses compensate workers, not just executives." (Fulcrum Partners, LLC)
House and Senate Tax Bills Propose Changes to Qualified Plans
"[T]he House bill contains a number of smaller proposed changes that are intended to simplify plan administration, promote savings, and/or raise revenue, and the Senate bill proposes several targeted reductions to various tax-qualified retirement plan contribution limits." (Morgan Lewis)
[Official Guidance] Defined Contribution LRM and Information Package, October 2017 (PDF)
123 pages. Oct. 2017, published online Nov. 14, 2017. "This information package contains samples of plan provisions that have been found to satisfy certain specific requirements of the Internal Revenue Code, taking into account changes in the plan qualification requirements, regulations, revenue rulings, and other guidance in the 2017 Cumulative List of Changes in Plan Qualification Requirements (Notice 2017-37)." [Also online: 130-page red-lined version showing changes from the previous (October 2011) version.] (Internal Revenue Service [IRS])
Pension Plan Limitations for 2018
"These changes will take effect on January 1, 2018, and are based on the fact that the Consumer Price Index increased by 2.2% last year. Many of the limitations are being increased, while others remain unchanged." (Trucker Huss)
Debt in Retirement Affects Confidence
"Only half of retirees with debt are confident they will be able to live the lifestyle they want, but 70% of retirees without debt are confident.... Sixty-six percent of Americans view a mortgage held during one's working years as 'good' debt, but only 40% think this is true for those in retirement. Two-thirds (66%) of Americans do not think it is a good idea for people to carry mortgage debt into retirement." (PLANSPONSOR)
[Opinion] 'Rothification' Would Be Likely to Reduce Retirement Saving
"As part of tax reform, Congress considered changes to 401(k)s that would require most new contributions to go to a Roth, rather than a traditional, account. This budget gimmick would help pay for tax cuts because Roths are taxed up-front, rather than in retirement. Such a change, however, could also affect how much people save. Some could save more by keeping their contribution steady. Some may save the same by reducing their contribution to maintain their take-home pay. But many, especially those who have lower incomes or are cash-strapped, may overreact and save much less. Rather than risk disrupting the retirement savings system, a better idea is to focus on actions to boost saving and expand access to workplace retirement plans." (Alicia H. Munnell and Gal Wettstein, Via Center for Retirement Research at Boston College)
Connecticut Pushes Back Implementation Date for State-Run Auto-IRA Program
"The [Connecticut Retirement Security Authority (CRSA)] is responsible for the design and implementation of a Connecticut Retirement Security Exchange for the state's private sector employers and their employees. The CRSA Board of Directors voted to defer the statutory Jan. 1, 2018 implementation date of the Exchange.... 'There appears to be misinformation that employers must purchase retirement savings products for their employees by Jan. 1, 2018,' [Labor Commissioner Scott D. Jackson] said. 'However, we want employers to be aware that this is inaccurate information.' " (National Association of Plan Advisors [NAPA])
A Look at the House Ways and Means Committee Revisions and the Senate Mark of Tax Cuts and Jobs Act (PDF)
"The Senate Mark also introduced a five percent Federal income tax withholding obligation on compensation paid to independent contractors and included other differences to the final House bill impacting [1] compensation-related deductions, [2] employer-provided fringe benefits, [and] [3] retirement plans ... [T]he House bill and Senate Mark are aligned on changes to section 162(m), including the proposed elimination of the performance-based compensation exception to the $1 million limit on the deductibility of covered employee compensation" (Baker McKenzie)
[Opinion] Collecting Taxes on 401(k) Deferrals: The Wrong Policy at the Wrong Time
"Congress is looking for ways to pay for a reduction in corporate tax rates, and the money has to come from somewhere. So why not collect the tax on 401k contributions now? This short-term gimmick eliminates individual choice and risks thwarting the long-term goal of increasing retirement savings. What can we do to convince our elected officials this is a bad idea?" (Carol Buckmann, J.D., via PenChecks)
[Official Guidance] Text of IRS Rev. Rul. 2017-22: Covered Compensation Tables for 2018 (PDF)
"This revenue ruling provides tables of covered compensation under Section 401(l)(5)(E) of the Internal Revenue Code and the Income Tax Regulations thereunder, for the 2018 plan year.... For purposes of determining covered compensation for the 2018 year, the taxable wage base is $128,700." (Internal Revenue Service [IRS])
Senate Sneaks 401(k) Contribution Limits Into Tax Cuts Bill
"High earners would be prohibited from making $6,000 catch-up contributions to 401(k) workplace retirement plans. That lets the Senate say it isn't targeting 401(k) deferrals, but it's a huge grab out of the $24,000 high earners can put away today ($18,000 elective deferral and $6,000 catch-up). In addition, the Senate proposal targets government workers who have both a 457 retirement plan and a 401(k) plan. No matter how much they earn, they wouldn't be able to save to the max in both plans anymore at one employer. And special catch-ups for 403(b) and 457 plans would be restricted too." (Forbes)
Senate Tax Reform Proposal Caps Catch-Ups
"The Chairman's Mark of the Senate tax reform proposal throws a few unexpected curves -- bringing back problems for deferred compensation plans, introducing some new problems for 403(b) and 457 plans and capping catch-up contributions. Under the proposal unveiled Nov. 9 by Sen. Orrin Hatch (R-UT), Chairman of the Senate Finance Committee, as of plan years and taxable years beginning after Dec. 31, 2017, individuals could not make any catch-up contributions -- even on an after-tax basis -- for a year if they received wages of $500,000 or more in the preceding year." (National Association of Plan Advisors [NAPA])
Description of the Chairman's Mark of the 'Tax Cuts and Jobs Act'
253 pages. "The Senate Committee on Finance has scheduled a markup on November 13, 2017, of ... the 'Tax Cuts and Jobs Act' ... This document ... provides a description of the Chairman's Mark[.]' " [Includes descriptions of employer fringe benefit provisions at page 97; executive compensation provisions at page 125, and retirement savings provisions at page 177. JCT has also released a report of estimated revenue effects of the legislation.] (Joint Committee on Taxation [JCT], U.S. Congress)
Senate Introduces Tax Bill, Keeps Retirement Contributions Intact
"Like the House bill, the Senate version keeps pre-tax retirement contributions intact.... Unlike the House bill, the Senate version does not reduce the tax rate on partnerships' pass-through income, instead calling for a deduction that would benefit more income groups." (Pensions & Investments)
House Ways and Means Approves Tax Reform Package
"The bill, which will be voted on by the full House later in the month, leaves intact the tax treatment of 401(k) contributions.... The plan also eases some burdens on non-discrimination testing of benefit plans, but the current House committee version does not change highly compensated employees' ability to use non-qualified deferred compensation plans to boost retirement savings." (Pensions & Investments)
Episcopal Pension Fund Says Move to DC Plan Would Not Benefit Participants
"The Church Pension Group, the authority for administering pensions and other benefits for Episcopal clergy ... says it has considered moving from a [DB] plan for clergy to a [DC] plan and concluded that doing so 'would be irresponsible.' ... The group says its analysis shows that, assuming the same contribution level, the DB plan in the vast majority of cases would produce a higher benefit to a participant than would a DC plan." (PLANSPONSOR)
2018 Inflation-Adjusted Limits Affect Many Employee Benefit Plans
"[Rev. Proc. 2017-58] sets out the 2018 inflation adjustments for ... health flexible spending arrangements (FSAs), qualified transportation fringe benefits, qualified adoption assistance programs, penalties related to the [ACA] individual mandate and qualified long-term care (LTC) premiums. The limits also include ... the qualified retirement plan limits released in Notice 2017-64 and the recently announced Social Security taxable wage base. The 2018 tax limits may affect design, administration, communication and tax reporting for these benefits." (Willis Towers Watson)
Qualified Retirement Plan Amendments: 2017 Year-End Update (PDF)
"This advisory reminds plan sponsors of deadlines for amending qualified retirement plans and certain year-end legal updates." (Alston & Bird)
Prohibition on Loans from 403(b) Plan Participant's Account to Church-Related Employer Applies to Indirect Loans
"[IRS Chief Counsel Advice Memorandum 201742022] presented two situations ... In the first, one of the plan's investment options was an investment in limited liability company (LLC) shares where the LLC's primary function was to offer loans to the employer. The investment return to the participant was the interest on the loan paid by the employer. The LLC was not controlled directly or indirectly by the church. In the second, one of the plan's investment options was an investment in an LLC controlled either directly or indirectly by the employer, but offering loans to the employer was not the LLC's primary function." (Wolters Kluwer Law & Business)
[Opinion] Steps to Address America's Retirement Security Challenge: A Public Policy Point of View (PDF)
15 pages. "As the U.S. retirement system continues to evolve and individuals take on more responsibility for retirement planning, it's important to support those workers as much as possible in the transition.... [K]ey policy changes that will strengthen the current system.... [1] Encourage greater access to lifetime income products.... [2] Establish an alternative 401(k) safe harbor plan with higher deferral rates.... [3] Facilitate portability and consolidation of individuals' retirement assets.... [4] Permit some retirement savings to be used for short-term needs.... [5] End the Federal Budget practice of 'double counting' increases in the premiums that plan sponsors must pay to the PBGC.... [6] Revise nondiscrimination testing rules that currently encourage many plan sponsors to 'freeze' their DB pension plans." (Mercer)
Tax Reform Proposal Would Impact Savings Arrangements
"The Ways and Means Committee continues to make changes to the bill before the House of Representatives votes on it. The vote was expected to occur during the week of November 13, 2017, but may occur earlier. Meanwhile, the Senate is working on a tax reform bill of its own. Although the legislative process is still ongoing, [this article provides] a summary of the more significant provisions from the initial proposal that could become law and affect tax-favored savings arrangements." (Ascensus)
Disciplined, Confident and a Little Stressed: Millennials Report Positive 401(k) Saving Behaviors
"86 percent of Millennials, 90 percent of Gen Xers and 84 percent of Boomers [consider a 401(k) plan] a 'must-have' benefit. Millennials are especially reliant on 401(k)s for the money they'll need in retirement, with 78 percent saying a 401(k) is their largest or only source of retirement income.... [F]inancial stress has affected the job performance of more than a third of Millennials (35%), compared to 18 percent of Gen Xers and 11 percent of Baby Boomers. Not surprisingly, student loan debt impacts many Millennials, with 24 percent citing it as a source of financial stress." (Charles Schwab)
Why You Shouldn't Borrow from Your 401(k) Account
"In effect, the loan offsets one of the chief benefits of a 401(k), the upfront tax deduction. But what if you're not in a pinch? Would it make sense to use a 401(k) loan as a convenient alternative to a loan with a higher rate? It might seem that way if interest rates were the only consideration, but those lost investment gains should be counted too. With big U.S. stocks in the Standard & Poor's 500 index up more than 15 percent this year, someone who borrowed $50,000 Jan. 1 would have missed out on about $7,500 in gains. And paid interest on top of that." (U.S. News & World Report)
Consumers Not Receptive to Employer-Provided Retirement Planning Resources
"Only about one third (35%) of U.S. consumers use or would use 'retirement planning resources provided through employer' while 41% do not or would not ... Younger Americans are most receptive, while pre-retirees had the biggest increase, of 15 percentage points, in receptivity. One in three (32%) Accumulator households does not know where their income in retirement will come from in 2017, and there was no real improvement compared to 2016." (PLANSPONSOR)
New Tax Reform Bill: Major Changes to Executive Compensation Lead Impact on Benefits and Compensation Practices (PDF)
9 pages. "Employers that have used nonqualified deferred compensation plans to attract and retain highly compensated employees ... would need to consider alternatives to achieve their goals ... With the possible exception of incentive stock options, there would appear to be no reason for employers to grant stock options or stock appreciation rights.... [R]ule changes would ease the ability of employees to take hardship withdrawals and would reduce some of the complexity in administering hardship withdrawals.... As a taxable contribution, [Dependent Care FSAs] would be effectively eliminated as they would have no value to employees.... The Tax Bill does not eliminate Health Care Flexible Spending Accounts." (Mazursky Constantine LLC)
Financial Wellness Via Your 401(k)
"Those living paycheck to paycheck are probably your best customers when it comes to hardship withdrawals, loans and post-separation distributions. What can you do? ... Automatic enrollment, automatic escalation, etc ... Flexible account consolidation/aggregation provisions ... Eliminate hardship withdrawals ... Add 21st century loan provisions ... Consider adopting 'Deemed IRA' provisions." (Plan Sponsor Council of America [PSCA])
Tax Reform Surprise: Congress Slips in 401(k) MEP Broadside
"H.R.1 introduces a brand-new subsection to Section 401 -- subsection (o). Within this new subsection resides language that just may change the nature of the retirement plan industry. The proposed new 401(o) subsection is titled 'Special Rule for Applying Non-Discrimination Rules to Older, Longer Service and Grandfathered Participants.' Further down, specifically on Page 157, line 10 of H.R.1, sits paragraph 401(o)(1)(H). It reads as follow: '(H) TREATMENT AS SINGLE PLAN.--For purposes of subparagraphs (E) and (G), a plan described in section 413(c) shall be treated as a single plan rather than as separate plans maintained by each participating employer.' " (Fiduciary News)
[Opinion] Common Misperceptions About Using the Actuarial Approach for Personal Financial Planning
"[The authors] have concerns about stochastic models that promise higher levels of spending without properly quantifying the additional risk. [They] also have concerns about blindly relying on the results of these models, particularly over extended periods of time without adjustment. And while no one knows what future investments will earn, we do know how much insurance companies are currently charging to provide income for life based on life annuity quotes.... [T]his 'known' market pricing information can be useful in developing a low-investment-risk Actuarial Budget Benchmark that you can use in combination with the other approaches you are using to make better financial decisions." (Ken Steiner, FSA Retired)
Proposed Tax Bill Includes Language to Expand MEPs -- Dramatically
"The proposed language in the Tax Bill, if signed into law, will effectively negate the authority behind the [DOL's] Advisory Opinion 2012-04A by acknowledging that the adopters within a 413(c) multiple employer plan are not to be separated out with individual filing responsibilities and treated as separate plans. This means that the current requirement for Open MEP's that include filing individual Form 5500's, requiring individual plan audits for those adopters whose size makes such an audit a requirement, and the need for an individual ERISA Bond will disappear under the new law if it is enacted." (The Platinum 401k, Inc., via LinkedIn)
Why Automating Retirement Savings May Not Be Enough
"There is no doubt that automatic retirement savings plans do considerable good. They prod us into getting started on a path of saving regularly for our futures. The problem arises when we see them as a complete solution, rather than one piece of a complex and difficult set of behaviors that we will need to perform and integrate into our lifestyles." (Psychology Today)
Employee Benefit Provisions in the Proposed House Tax Bill
"The [proposed] rules raise many issues. For example, how do you tax nonqualified deferred compensation that has vested, but whose value is wholly contingent on future events? Will there be a reconciliation of the taxes that are paid when deferred compensation vests with the amount (including earnings) that is eventually paid? Special complications apply to existing awards granted before 2018 but that will not vest until after 2017." (Nixon Peabody LLP)
Reenrollment of Your Participants in Target Date Funds: The Price Is Right ... or Is It?
"[O]ne of the most common times for a plan sponsor to face the decision of re-enrolling the entire plan into target date funds is at a provider change.... Many vendors are offering lower administrative fees if plan sponsors choose to re-enroll the plan into their proprietary target date funds. So how do you make that decision? Is it a fee decision or an investment decision? And how do you run a request for proposal (RFP) taking this into account?" (Paul L. Powell)
Is Keeping Former Employees in Your Plan a Good Idea?
"[F]ormer employees with balances of $5,000 or less may actually cause the plan to incur an unnecessary audit fee, adding administrative difficulty, and potentially increasing fees per participant paid to the custodian and third-party administrator.... [O]ther issues to consider regarding potentially lost participants include how up-to-date are the addresses of the former employees in the plan? Are they still living the United States or even alive? What are the escheatment laws in your state? At what point does the account become abandoned?" (Belfint Lyons & Shuman, CPAs)
Tax Cuts and Jobs Act: Good News for 401(k) Plans, Bad News for Nonqualified Deferred Compensation
"While there were no adjustments to contributions to 401(k) plans under the Act, that does not mean that the final version of the bill will not include some form of Rothification.... The Act liberalizes certain rules relating to hardship distributions.... This proposal would eliminate many standard forms of deferred compensation, such as 401(k) mirror plans. It also removes from the Code, with respect to services performed after December 31, 2017, Sections 409A, 457(b) (for tax exempt employers), 457(f), and 457A ... The exclusions for adoption assistance, dependent care, qualified moving expenses, and employee achievement awards are repealed." (The Wagner Law Group)

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