Retirement Plans Newsletter

July 28, 2017

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Webcasts and Conferences

What Employers Should Know About Their Health Plan
August 2, 2017 WEBCAST
Ohio State Bar Association

Chicago and Cook County, Illinois Paid Sick Leave Ordinances Take Effect
August 15, 2017 WEBCAST
Littler Mendelson

Whatís Happening with CDHPs and HSAs?
December 5, 2017 WEBCAST
Midwest Business Group on Health

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[Official Guidance]

Text of IRS Revised Memo for EP Examiners on Computation of Maximum Participant Loan Amount Under Section 72(p)(2)(A) (PDF)
"This memorandum supersedes interim guidance TE/GE-04-0417-0016 ... issued April 20, 2017. This memorandum directs EP Examinations staff to determine, as set forth [in this memo], the amount available for a loan where the participant has received multiple loans during the past year from a qualified plan[.]" [TE/GE-04-0717-0020, July 26, 2017]
Internal Revenue Service [IRS]

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[Official Guidance]

Treasury Announces Steps to Wind Down myRA Program
"The U.S. Department of the Treasury today announced that it will begin to wind down the myRA program after a thorough review by Treasury that found it not to be cost effective. This review was undertaken as part of the Administration's effort to assess existing programs and promote a more effective government. Demand for and investment in the myRA program has been extremely low. American taxpayers have paid nearly $70 million to manage the program since 2014.... Participants in the myRA program are being notified of the upcoming changes, including information on moving their myRA savings to another Roth IRA."
U.S. Department of the Treasury

[Guidance Overview]

401(k) Hardship Distributions: Do They Have to Be So Hard?
"Although many providers, including the largest and most well-known, have used online, participant self-certification to process hardships, serious questions remain whether this process is adequate -- and the employer, not the provider, remains responsible for any improper hardships. Recent changes to IRS audit guidelines for its examiners indicate the IRS may be more flexible than in the past, as long as certain notice and documentation requirements are met."
Warner Norcross & Judd LLP

Handling 'Missing' Participants, Part 1
"What are 'missing participants?' ... When does a participant become 'missing?' ... When must benefits be paid? ... What steps should be taken to locate a missing participant? ... Best practice: avoid 'losing the participant' in the first place ... What to do when the participant cannot be found ... Alternatives to rollover to an IRA."
October Three Consulting

Developing and Estimating the Annual Increase on Qualified Plan Limits (PDF)
"For most companies, a late October release is sufficient for their next year planning initiatives.... [F]or those who require the estimates before late October, the process of developing a best guess of the inflation-based cost-of-living increases can be overwhelming.... You should be comparing the new average CPI numbers to the original base CPI averages. You will be applying that law-to-date growth in the CPI to the original annual limits to determine the new potential annual limits, then rounding that number down to the correct limit increment increase amounts."
Russell Morgan at NQDCSolutions, LLC

[Advert.]

Online Learning Course: Fiduciary Responsibilities for ERISA Plans - BenefitsLink discount

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Defining Plan Expense Accounts (PDF)
"[A Plan Expense Account] is an account within the Plan to which your Plan's recordkeeper makes deposits to be used by the plan administrator. The plan sponsor can use these funds to pay eligible plan operating expenses.... Plan Expense Accounts become a critical tool not solely for larger plan sponsors, but perhaps more importantly, for sponsors with above average account balances, without regard to total plan size. The critical issue is how much revenue your plan investments generate and the unique servicing requirements of your plan."
Multnomah Group

IRS Issues 2017 Cumulative List for Pre-Approved Defined Contribution Plans
"Providers of pre-approved defined contribution plans and their advisors should carefully review the 2017 Cumulative List to ensure that their plan documents and opinion letter applications address all of the issues that the IRS has identified.... Beginning with the 2017 Cumulative List, the Cumulative Lists no longer apply to individually designed plans; instead, the IRS has begun to issue an annual Required Amendments List for these plans[.]"
Thomson Reuters / EBIA

Why Do I Need to Restate My 403(b) Plan Document?
"What is the deadline for getting this done? ... What if we don't restate our plan? ... Is there any benefit to this process other than the IRS Pre-Approval? ... How do I select a consultant to do this work? ... What about the investments? ... The insurance company will give me a low cost document and some investments they chose. Isn't that sufficient?"
QBI

Phased Retirement Gets a Second Look
"[F]ormal phased retirement programs present design and operational challenges for employers, including compliance with provisions and laws related to discrimination. Despite these challenges, most employers that the GAO interviewed that have phased retirement programs found them beneficial."
Society for Human Resource Management [SHRM]

Discussions on
the BenefitsLink Message Boards

Adopting a Second Plan Covering Some But Not All Union Employees
"Here is an interesting potential plan design having to do with the definition of 'collectively bargained employee.' It's a new company. All employees, including the owners, are union employees and are participating in the union plan based on their service with the employer. They want to adopt an additional plan that will cover some, but not all of the union employees. It will also cover non-union employees when they eventually hire some. One goal of the plan is to entice those they use as supervisors to work for them exclusively. The other union workers are provided by the union for each job and it may not be the same workers for the next job. The by-the-job workers are the ones they want to exclude. I see two different scenarios, depending on how you interpret the definition of 'collectively bargained employee' in 1.410(b)-6(d)(2)."
BenefitsLink Message Boards

Adjustment Factor Under Age Weighted Profit Sharing Plan
"I am working on an age weighted profit sharing plan. Plan document is SunGard PPA. NRA in document is age 55. UP-1984 8.5% is mortality table. Based on the document, the units are determined by multiplying compensation by the table factor on years to NRA and table factor of adjustment factor if NRA is not 65. Does the adjustment factor change for those over 55? Or would the adjustment factor remain at Age 55 even if the participant is over age 55?"
BenefitsLink Message Boards

1099-Rs for Late Reported Deaths
"How to handle late reported deaths concerning 1099-R tax reporting? Issue corrected 1099's all the way back to the member's death year, and then issue new 1099's from that point forward under the survivor's Taxpayer Identification Number for each specific year? Or, report the whole amount received from the death forward on a current year 1099?"
BenefitsLink Message Boards

Press Releases

DWC ERISA Consultants Rebrands
DWC ERISA Consultants

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David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2017 BenefitsLink.com, Inc. All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of BenefitsLink.com, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

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