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DWC - The 401K Experts

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Alerus Financial
in MN

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[Official Guidance]

Text of IRS Notice 2017-45: Extension of Temporary Nondiscrimination Relief for Closed Defined Benefit Plans (PDF)
"This notice extends the temporary nondiscrimination relief for closed defined benefit plans that is provided in Notice 2014-5 ... by making that relief available for plan years beginning before 2019 if the conditions of Notice 2014-5 are satisfied."
Internal Revenue Service [IRS]


The Advisor's Guide to the DOL Fiduciary Rule

Sponsored by The National Underwriter Company

Authored by ERISA experts at The Wagner Law Group, this Guide delivers a powerful combination of expert explanations and legal analysis along with vital Q&As that provide reliable, direct answers to vital questions before they arise. BENLINK for 10% discount.

[Official Guidance]

Text of Draft Instructions for 2017 IRS Form 8955-SSA (PDF)
8 pages, Aug. 10, 2017. "Form 8955-SSA, the designated successor to Schedule SSA (Form 5500), is used to satisfy the reporting requirements of section 6057(a). Form 8955-SSA is a stand-alone reporting form filed with the IRS.... Use Form 8955-SSA to report information about separated participants with deferred vested benefits under the plan.... The information reported on Forms 8955-SSA is generally given to the Social Security Administration (SSA). The SSA provides the reported information to separated participants when they file for social security benefits."
Internal Revenue Service [IRS]

[Guidance Overview]

Small Plans Do Need an Audit Unless... (PDF)
"ERISA's small plan exemption requirements do not depend solely on the number of participants in a plan. Instead, they depend on the number of participants in the plan and the nature of the small plan's assets.... If a plan does not meet the 'qualifying plan assets' threshold, each person who handles non- qualifying plan assets must be covered by a fidelity bond that is at least equal to 100% of the non-qualifying plan assets and must also meet the regular ERISA Section 412 requirements[.]"
Boutwell Fay LLP

[Guidance Overview]

DOL Proposes Extension of PTE Transition Period, Non-Enforcement Policy for Arbitration Limitations (PDF)
"During this period, providers have flexibility to choose how to 'safeguard' compliance with those standards, whether by 'tamping down' conflicts associated with adviser compensation, or increasing monitoring and surveillance of investment recommendations, or by other approaches or a combination of approaches.... The response by providers to the Final Rule during the transition period may continue to evolve, based on market developments and other relevant factors, but in this notice DOL is not directing any change in approach for providers."
Eversheds Sutherland

[Guidance Overview]

DOL Proposes Further Delay in Fiduciary Rule Compliance
"FAB 2017-03 clearly states that the DOL will not enforce the prohibition on advising agreements that waive class-action rights. The agency states that this provision in the BIC and Principal Transactions exemption violates the Federal Arbitration Act and conflicts with other court precedent. As a result, it appears that investment providers will be free to draft advising agreements that require clients to waive their right to participate in legal class actions brought against providers for inappropriate fiduciary investment advice."


How to Draft IRA Beneficiary 'See-Through' Trust Provisions

Sponsored by Lorman and BenefitsLink

September 9 webinar. Learn the critical aspects of naming a trust as beneficiary of a retirement account and how to avoid some of the most common mistakes. CE Credits. BenefitsLink discount

Single Premium Pension Buy-Out Sales Break 15-Year Record in the Q2 2017
"U.S. single premium pension buy-out product sales were $4.1 billion in the second quarter of 2017, more than three times higher than sales recorded in the second quarter 2016 ... This is the first time that second quarter buy-out sales have eclipsed $4 billion in the U.S. market, and is the highest second-quarter sales total on record since 2002[.]"

Social Security Information for People Affected by Hurricane Harvey
"[USPS has provided] a list of Post Office locations ... where checks will be made available for pick-up beginning Friday, September 1.... Nearly all payments issued by direct deposit will arrive as scheduled.... For recipients in the affected areas who receive their payment through a Direct Express card, fees will be waived, even if they have evacuated out of the area.... Social Security has established three emergency payment locations in Texas[.]"
U.S. Social Security Administration [SSA]

FAS87 ASC715 Discount Rates and Moody's Rates, Updated August 2017
Includes an unofficial monthly report as of August 31, 2017 of Moody's Daily Long-term Corporate Bond Yield Averages and Moody's Daily Treasury Yield Averages, used as benchmarks by some corporate pension plans.
David Rigby via BenefitsLink Message Boards


New Math Hits Minnesota's Pensions?
"[W]hile Kentucky, Illinois, and New Jersey have well-known public pension problems, other states are also on the verge of seeing their pensions collapse, either because of years of neglect or more likely, because the new pension math (new GASB rules) is forcing them to use a much lower discount rate to determine their future liabilities.... [S]ince the duration of liabilities is a lot bigger than the duration of assets, then no matter how well investments do, pension deficits will keep widening as interest rates decline. This effectively is the death knell for chronically underfunded US public pension plans."
Pension Pulse

Benefits in General

[Guidance Overview]

Agencies Provide Guidance for Plans and Participants Affected by Hurricane Harvey
"A hardship distribution is still limited to the maximum amount permitted by IRS rules but can be provided for any hardship, not just those listed in the IRS regulations, and no post-distribution contribution restrictions are required.... Plan loans can be made without following the procedural requirements imposed by the plan at the time of the loan.... The filing date for Form 5500 filings due on or after August 23, 2017 and before January 31, 2018 is automatically extended to January 31, 2018.... The DOL requests welfare plans make reasonable accommodations for participants and beneficiaries who are unable to timely file benefit claims or make COBRA elections ... Under an emergency PTO sharing plan, employees can donate some of their PTO to a PTO bank that is administered by the employer."
Haynes and Boone, LLP

[Guidance Overview]

First Round of Hurricane Harvey Relief Guidance
"A retirement plan will not be disqualified if it ... disregards procedural requirements of plan loans in its document ... However the plan is required to attempt to gather the required documentation for loans as soon as possible; such documentation would include spousal consents to the distribution or loan. There is a discussion of the alternatives in the event a spouse is represented to be deceased without providing a death certificate.... The DOL also recognized that they will emphasize compliance assistance, grace periods and relief where appropriate when physical disruption to a plan or its service provider makes timely compliance with requirements, including disclosures impossible."
Winstead PC

Cyber Security and Online Privacy Issues for Employee Benefit Plans
"Increasingly, data is accessed on mobile devices and data is stored using cloud-based services making it susceptible to cyber security threats. The fact that there are many different users and service providers involved in benefits administration further complicates the issue."
Butterfield Schechter LLP

on the BenefitsLink Message Boards

Recent DOL Audit on Required Disclosures to DB Plan Participants
"Has anyone experienced a recent DOL audit concerning Required Disclosures to defined benefit plan participants at time of termination, periodic statements to deferred vested participants who have not yet reached NRA, and to participants once they reach NRA? In addition to a copy of the SAR and SPD documents, what do they audit to determine if we have complied with actually mailing out the documents?"
BenefitsLink Message Boards

Different Distribution Options for Differently Invested Money?
"We have a 457(b) Plan (tax-exempt, not governmental) in which the plan sponsor wants a terminating participant's fixed-rate fund account to be distributable in certain ways but the mutual fund account to be distributable in several additional ways. Is this OK?"
BenefitsLink Message Boards

Automatic Enrollment Date Later Than Participation Date?
"Client has approx. 5,000 employees. Very high turnover within the first 90 days of employment (about 40%). Client permits date of hire enrollment so 401(k) sign-up happens during completion of new hire paperwork. Can automatic enrollment be added to the plan that such that participants become automatically enrolled on the first of the month after their 90th day of employment? Anyone who has made it through the first 90 days and hasn't completed a 401(k) election would be automatically enrolled."
BenefitsLink Message Boards

Correction of Release Timing Language After Termination
"I have a situation involving a 2005 employment agreement that makes severance payments (to be paid in installments over 18 months) contingent upon a release of claims being signed no later than 45 days following delivery of the required release by the Company but without any other of the necessary release timing provisions in IRS Notice 2010-6 and IRS Notice 2010-80. The individual has been terminated, so we do not appear to have the ability to correct the provisions without penalty per 2010-6. A large portion of the severance -- but not all -- is exempt from Section 409A. If we cannot find a basis for claiming the release timing provisions satisfactory and must pay an excise tax, can we exclude the severance amount exempt from 409A from the excise tax calculations? There is a concern that the entire severance benefit may be subject to the excise tax because the entire employment agreement/severance payment are not exempt."
BenefitsLink Message Boards

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David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2017, 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, 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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