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[Guidance Overview]
Missed a 60-Day Rollover? Try Self-Certification
"Plan administrators and IRA custodians are not required to accept the self-certification and ... many of the larger institutions [may] continue to insist upon a private letter ruling.... [T]he IRS itself has cautioned that self-certification is not the equivalent of a waiver of the 60-day requirement."
Fox Rothschild LLP
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2016 Intersector Group Meeting with the IRS and Treasury: Excerpt from Notes on Form 5500 Schedule H/I Line 4L (PDF)
"These meeting notes are not official statements of the Treasury Department or the IRS and have not been reviewed by their representatives who attended the meeting. The notes merely reflect the Intersector Group's understanding of Treasury Department/IRS representatives' views expressed at the meeting ... Pending review of complete meeting notes, [the Intersector Group is] publishing this excerpt dealing with Form 5500 filings due in October for most calendar-year plans."
American Academy of Actuaries, Conference of Consulting Actuaries, Society of Actuaries, and ASPPA College of Pension Actuaries
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Keep Participants from Becoming Lost!
"Make it a general practice to have an emergency contact sheet with names, phone numbers, email and mailing addresses of the employee's relatives or close friends.... Be sure you have a beneficiary designation form on file for every participant.... Schedule an exit interview on the participant's last day of employment.... [As] soon as possible after the participant terminates, send a notice or a letter to the participant's home ... If your plan contains a 'cash-out' provision, make sure that you take advantage of it.... The longer you put off contacting terminated participants with balances, the easier it will be to 'lose' them."
Retirement Management Services
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When Will PBGC Premiums Force a Change in Contributions?
"For many years, contribution policy was not a particularly complex issue. Few plan sponsors saw much incentive to pay more than the minimum required contribution; most simply paid what they were told to pay by the IRS.... Two things changed since then, though: funding relief and PBGC premiums.... PBGC premiums are, in effect, a tax on not making contributions, a tax that gets larger every year.... Not every plan sponsor is going to decide that 2017 is the year where the minimum contribution policy is finally unsustainable, but every sponsor should be asking the question."
Russell Investments
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Tricks and Traps Involving Required Minimum Distributions
"Generally, an individual's RMD is determined by dividing the adjusted market value of their IRA or employer sponsored retirement account as of December 31 of the prior year by an applicable life expectancy factor taken from the Uniform Lifetime Table. There are special rules for participants in traditional retirement plans and those whose spouses are more than 10 years younger."
Harvey M. Katz, Fox Rothschild LLP
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Some 2017 Retirement Limits Likely to Climb
"With both the July and August rates in hand, there is little doubt that we will see some increases in the benefit limits for 2017 ... From time to time we have seen the CPI-U retreat slightly, but we would need to see a fairly significant decrease in the September figure to eliminate the projected increases shows below. More likely, the September CPI-U will advance slightly. But for any of these limits to jump to the next level, a 2.7% increase would be needed in just one month. That's not likely to happen."
Xerox HR Insights
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Interview with Phyllis C. Borzi: Independent 'Business Decisions' May Lead Companies to Apply Fiduciary Standard Broadly
"[We] know the DOL's Rule only applies to retirement accounts. It's clear it will be problematic for brokers to tell clients 'I will act in your best interests for your retirement money, but not for your taxable money. Given this, what, if any, are the potential scenarios where the SEC does not follow suit with similar regulations for taxable accounts? BORZI: I couldn't tell you what regulations or rules might come out of other agencies in the future. What I can say is that some companies may make the business decision to simply provide the same level of care to all accounts. But those decisions are going to be made company by company."
Fiduciary News
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Investment Adviser Credentials to Use as Hiring Criteria
"Look for the Accredited Investment Fiduciary (A.I.F.) designation.... Hire a professional who works for a firm whose core business is providing investment advice.... Don't hire an investment adviser that is also an asset manager or recordkeeper.... Check the background of the advisers you are thinking of hiring using BrokerCheck.... Since your on-going relationship is going to be with the consultants servicing your business, make sure you spend the majority of your time during the sales process talking with them, not the sales professionals."
Lawton Retirement Plan Consultants
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California Decision Called 'Existential Threat' to Pensions
"Reformers hailed the decision in a Marin County case last month as a long-sought way, if upheld by the state Supreme Court, to control runaway costs by cutting pension amounts current workers earn in the future, while protecting pension amounts already earned.... [T]he CalSTRS board was given a broader interpretation of the ruling by its fiduciary counsel, ... [who] seemed to suggest the ruling might open the door for cuts in pension amounts already earned." [Marin Assoc. of Public Employees v. Marin County Employees' Ret. Assoc., No. A139610 (Cal. Ct. App. 1st Dist. Aug. 17, 2016; certified for pub.)]
Calpensions
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Why You Should Roll Your 401(k) to Your New Employer
"Many 401(k) plans offer participants access to institutional share class mutual funds and very low cost index funds, especially those sponsored by large employers.... Balances in retirement plans, such as 401(ks), are protected against civil judgments and bankruptcy.... [D]epending on where you live, your state may not extend that protection to IRAs.... Many 401(k) plans permit participants to borrow from their plan assets at a very low rate of interest."
Financial Finesse
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The Implications of Carrying Higher Housing Debt Into Retirement (PDF)
"While it may have been true that earlier generations of retirees did not have a widespread need to carry life insurance protection in retirement, the coming generations of retirees will have this need due to the amount of debt they are choosing to carry into their retirement years and the loss of income resulting from the death of a spouse."
Prudential
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[Opinion]
A Proposal for a Simple Solution to Auto-Portability
"Consolidating all of an employee's accounts into a Master IRA would ensure continuity of the investment return by helping to sustain the value of the assets while keeping pace with inflation. It would provide guidance for missing participant funds and enable plan sponsors and administrators to uphold their fiduciary duties. And it would remind participants of their plan assets when they file for social security benefits."
PenChecks
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Executive Compensation and Nonqualified Plans
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[Guidance Overview]
409A Failures: New Corrections Under Guidance and Case Law (PDF)
"Correcting section 409A mistakes was made easier by the IRS's formal correction program issued under Notice 2010-6 and Notice 2008-113, which allow specific section 409A document failures and operational failures to be corrected with reduced or even zero tax penalties. But not all section 409A failures can be fully corrected under the IRS program."
Ivins, Phillips & Barker Chtd., in Tax Notes
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Press Releases
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BenefitsLink.com, Inc.
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Winter Park, Florida 32789
(407) 644-4146
Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager
BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2016 BenefitsLink.com, Inc. All materials
contained in this newsletter are protected by United States copyright law and may not be
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