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[Advert.]
Join a Free ASC Webcast!
New IRS Revenue Procedure 2017-41 makes significant changes to the IRS Pre-Approved Plan program that all document providers must understand. Join us for a FREE Webcast where John Griffin, J.D., LL.M. will discuss what you need to know. Register Now!
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[Official Guidance]
Text of IRS Notice 2017-50: Weighted Average Interest Rates, Yield Curves, and Segment Rates Applicable for September 2017 (PDF)
"This notice provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under Section 417(e)(3), and the 24-month average segment rates under Section 430(h)(2) ... In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under Section 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under Section 431(c)(6)(E)(ii)(I)."
Internal Revenue Service [IRS]
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[Guidance Overview]
IRS Preapproved Plan Program Gets a Makeover (PDF)
"Plan sponsors of individually designed plans may want to consider this guidance if they are considering moving to a pre-approved plan document. And plan sponsors who already use pre-approved plans may want to review the guidance to see what changes will be coming. Of course, these new defined contribution documents will not be available for a few more years."
Groom Law Group, via TAXES The Tax Magazine
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[Guidance Overview]
Retirement Plan-Related Relief for Victims of Hurricane Irma
"The Internal Revenue Code and IRS regulations impose significant limitations on when participants may access assets from retirement plan accounts through loans and distributions while actively employed. In addition, many plans provide for additional limitations. The IRS has provided limited relief from these restrictions for certain participants affected by Hurricane Irma.... It is important to note that the IRS relief does not provide relief from the additional 10% tax on early distributions for eligible individuals who obtain distributions."
Mazursky Constantine LLC
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[Advert.]
Reforms, Regulations & Retirement Realities
This October the nation's retirement industry elite will converge at ASPPA Annual, in our nation's capital, with insights from industry insiders, regulators, pundits and the nation's leading voices. Join us!
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[Guidance Overview]
Hardship and Loan Relief Extended to Hurricane Irma, Along with Relief for Single Employer DB Plans
"[E]mployers who sponsor 401(k), 403(b) and 457(b) plans may receive these requests [for hardship withdrawals] and can choose to provide this relief even though the employer and its plan are not located in one of the affected areas, because the relief is extended to employees and former employees who have lineal ascendants... who had a principal residence or place of employment in one of the designated counties. For a hardship distribution provided under this relief, the employer is not required to stop the employee receiving the hardship distribution from making elective deferrals for six months as is required for other hardship withdrawals."
Winstead PC
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Participants Are Driving a New Era of Menu Design
"For those impending retirement participants there is an increase in certain trends, offering insight into how plan sponsors can prepare investment menus to provide the value and options needed to act in participants' best interest. [1] Participants are more engaged.... [2] Participants' needs have changed.... [3] Participants can take legal action."
Manning & Napier
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Attack on University Section 403(b) Retirement Plans: Litigation Update
"To date, only three district courts -- the Middle District of North Carolina, the Northern District of Georgia and, most recently, the Southern District of New York -- have ruled on the motions and dismissed some of the class claims against the universities. However, the bulk of the claims alleging that the fiduciaries breached their duties of prudence in monitoring or investigating investment options, administrative fees and costs have survived."
Michael Best & Friedrich LLP
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Fiduciaries: 'Can Someone Just Tell Me What to Do?'
"Eight of ten employers say they're concerned about an increase in fiduciary litigation. And more than a quarter listed fiduciary liability and litigation as their top 401(k) concern.... So where should a concerned fiduciary start? Set the checklist aside for now and begin with a higher level of review."
Manning & Napier
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Using a Section 115 Trust to Help Manage Pension Obligations
"[An Internal Revenue Code section 115] trust is a vehicle for segregating agency funds from general assets for the purpose of funding essential governmental functions.... Funds placed in a 115 trust are irrevocably committed for the essential government function(s) specified in the applicable trust agreement (e.g., pension obligations). Therefore, the monies held in such trusts can be invested in accordance with the rules governing such special purpose accounts."
Chang Ruthenberg & Long PC
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Planning for Retirement: Financial Areas of Focus for Empty Nesters
"There are some key steps parents should consider that may help to improve retirement readiness when children leave home. [1] Increase contributions to retirement accounts.... [2] Convert IRA and 401(k) dollars into Roth dollars.... [3] Save more in Health Savings Accounts (HSAs).... [4] Convert IRA assets to HSA assets.... [5] Start planning to maximize Social Security benefits.... [6] Consider the role permanent life insurance can play to reduce risk.... [7] Pay down housing debt.... [8] Engage a financial advisor."
Prudential
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The Importance of an ESOP Distribution Policy
"The plan document typically will include the form, method and timing options the plan will allow -- cash vs. stock, lump sum vs. installments. A distribution policy will specify how distributions will be paid. For example, a distribution policy may read: 'Upon death, disability, or retirement, distributions will be paid out lump sum in cash and commence no later than one year following the event.' There are many things to consider when drafting a distribution policy -- repurchase liability, cash flow projections, future transactions, corporation status, benefit levels and compliance testing issues. All of these will impact how you structure your policy to meet your company's objectives."
Blue Ridge ESOP Associates
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Benefits in General
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[Guidance Overview]
Retirement Plan and Leave Donation Programs During States of Emergencies
"Employers can offer retirement plans and leave donation programs with features that allow access to retirement funds or paid time off to employees in need. These features can be added using standard plan operational procedures.... [W]hile this relief permits employers to roll out features more quickly, it may come with a potential cost of additional administrative requirements."
Carlton Fields
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7,000 Insurance Agents Held to Be Employees for ERISA Purposes
"[T]he Court concluded that the evidence supported both sides but that the amount of control American Family exercised (or could have exercised) tipped the scales in favor of employee status. At the same time, the Court noted that prior case law has been 'nearly unanimous' in finding insurance agents to be independent contractors and that the resolution of damages will be 'unusually complicated.' " [Jammal v. American Family Ins. Group, No. 13-437 (N.D. Ohio Aug. 1, 2017)]
Vorys, Sater, Seymour and Pease LLP
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Discussions
on the BenefitsLink Message Boards
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Excluding a Division of Employees from Participation
"Employer (traditional 401(k) plan sponsor) wishes to exclude a division of employees who would be working under a new customer contract, to reduce its costs and submit a low bid in order to win the contract. This would include mostly new employees but also some current employees who already participate in the plan. Could the plan exclude the NEW HIRES from participating? How about amending the plan to prevent the CURRENT employees in this division from accruing additional hours of service? Or require 3 years of service for employees in this division in order to become eligible to participate (currently the plan document requires only 1 month)? Or providing employees in this division with a matching contribution that is lower than the matching contribution being made for other employees?"
BenefitsLink Message Boards
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Plan Document vs. Collective Bargaining Agreement
"We have taken over a plan under which some, but not all participants are covered by collective bargaining agreements. Some, but not all, of the bargained benefit changes have been incorporated into the document, either by amendment or as part of a restatement. For example, a benefit increase for one union and a benefit freeze for another union are nowhere to be found in any version of the document or amendment. Nowhere does the plan document incorporate by reference any of the CBAs. We think this is a problem while an in-house attorney for the former actuary/document provider says it's not a big deal because the CBAs 'trump the plan document.' We think the IRS would disagree with that assertion. Does anyone have direct experience with IRS looking at a plan where the document and CBA do not jibe?"
BenefitsLink Message Boards
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Filing a Form 5500 in 2017 Before Electronic Forms Available
"Small calendar year defined benefit plan terminated; all assets were distributed earlier this year (2/28/2017). So the final Form 5500 is due 9/30/2017 (I think), but the 2017 electronic forms are available yet. What to do?"
BenefitsLink Message Boards
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BenefitsLink.com, Inc.
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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 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.
Links to web sites other than BenefitsLink.com and EmployeeBenefitsJobs.com are offered as a service to our readers; we were not involved in their production and are not responsible for their content.
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Defined Contribution Account Manager
