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Webcasts, Conferences

ERISA Litigation Update
October 24, 2017 WEBCAST
American Law Institute Continuing Legal Education Group [ALI CLE]

Spooky Benefits Jeopardy
October 31, 2017 in TX
Worldwide Employee Benefits Network [WEB] - Dallas Chapter

403(b) Prototype Document
November 7, 2017 in OR
FIS Relius Education

Lessons Learned from Retirement Plan Litigation - Are You Asking the Right Questions?
November 15, 2017 WEBCAST
University Conference Services

Fundamentals Series 11: Controlled Groups [2017]
December 13, 2017 WEBCAST
FIS Relius Education

Ethics: Doing It Right [2017]
December 18, 2017 WEBCAST
FIS Relius Education

Determination Letters, Pre-Approved, and Individually-Designed Plans: New Guidance, Tips, and Concerns
January 5, 2018 WEBCAST
American Law Institute Continuing Legal Education Group [ALI CLE]

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New Comments and Topics

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[Official Guidance]

Text of IRS Rev. Proc. 2017-56: Automatic Approval for Certain Funding Method Changes for Single-Employer DB Plans (PDF)
21 pages. "Section 3 of this revenue procedure provides automatic approval for three asset valuation method changes, automatic approval for two valuation date changes, and automatic approval for one type of change in the treatment of benefits funded through insurance contracts. Section 4 of this revenue procedure provides automatic approval for a change in funding method in special situations in which there is a change in the plan's actuary, actuarial software, or the data elements used in the actuarial valuation, and for fully funded terminating plans. Section 5 of this revenue procedure provides automatic approval for a change in funding method in connection with a plan merger."
Internal Revenue Service [IRS]

[Advert.] -- Custom 401(k) Benchmark Reporting Now Available.

Sponsored by Burrmont Compliance Labs LLC

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[Official Guidance]

Text of IRS Rev. Proc. 2017-57: Procedures for Requesting Approval for a Change in DB Plan Funding Method (PDF)
17 pages. "This revenue procedure sets forth the procedure for obtaining approval of the [IRS] for a change in the funding method used for a defined benefit plan ... This revenue procedure also sets forth the procedure for obtaining approval of the IRS to revoke an election relating to interest rates ... The request should generally be made no later than 2-1/2 months following the close of the plan year for which the change is to be effective. Requests made after 2-1/2 months following the close of the plan year generally will not be considered unless the request involves a plan merger.... The information specified in this section 4.03 must accompany the request[.]"
Internal Revenue Service [IRS]

[Guidance Overview]

Mortality Table Updates Finalized for 2018 (PDF)
"Although a limited transition rule is available for funding purposes, the updated tables form the basis for the mandatory unisex tables used for minimum lump-sum values and maximum benefits under Code Section 415.... Updated rules for substitute, plan-specific mortality tables have been released and permit the use of tables reflecting partially credible experience for plans that are too small to have fully credible experience."

[Guidance Overview]

New Law Provides Additional Relief for Hurricane Victims (PDF)
"[W]hile the Act increased the limit on nontaxable loans to $100,000 or 100% of the participant's vested account balance, it did not similarly increase the ERISA loan limit. As a result, a plan loan equal to 100% of a participant's vested account balance would not be considered a taxable distribution but could be a prohibited transaction, if the plan administrator does not obtain additional security for the loan outside the plan."

It Takes a Committee: The Best Ways to Govern DC Plans (PDF)
13 pages. "Plans with higher participant counts were more likely to have separate committees -- administrative and investment -- than smaller plans ... Across committee types, poor participation and clarity around roles corresponded with a higher-than-average number of committee members.... While most committees reported annual or at least periodic fiduciary training, nearly one in seven respondents from single committees noted no fiduciary training had been done."
Callan Associates


SPARK Forum - November 5-7, 2017 -- The Breakers, Palm Beach, FL

Sponsored by SPARK

Join us at the retirement services industry's leading event for top marketing, sales, administration and record keeping professionals. Comprehensive agenda to meet the needs of 401(k) Plan Providers, Financial Advisors and Third Party Administrators.

Interesting Angles on the DOL's Fiduciary Rule, Part 65
"For both the prudence and best interest standards of care ... an advisor must consider whether it is prudent to recommend a TF fund or an NTF fund.... NTF funds typically have a higher expense ratio, while TF funds charge an initial transaction cost but usually have a lower expense ratio.... To further compound matters, there are also prohibited transaction issues.... [T]he Best Interest Contract Exemption [BICE] only protects compensation resulting from non-discretionary advice. So, for example, if the advisor is the one who decides to use NTF funds, that decision amounts to discretion. In that case, BICE would not be available to permit the prohibited payments from the custodian."

Which 403(b) Plans Are Good Fee Levelization Candidates?
"More than a quarter (26.2%) of 403(b) organizations are currently re-evaluating how plan expenses are allocated. Beyond fee allocation, some 403(b) organizations plan to tailor their investments with a tighter list of investment options -- dropping to 26, down from 28 last year. By narrowing the options, organizations can help make investment decisions less daunting for plan participants."
The Principal Blog

A Lender's Primer on Leveraged ESOPs and Recent Litigation (PDF)
"A prudent lender should ensure that the ESOP trustee has independently performed due diligence on the target corporation; negotiated a robust and arm's-length transaction with the selling shareholder (including the inclusion of standard indemnities and other relevant provisions in the acquisition documents that sufficiently protect the ESOP, as purchaser, and the company as it continues operations post- acquisition); and otherwise fulfilled its fiduciary duties to the ESOP."
Mayer Brown

Why the Average Retirement Age Is Rising
"Changes [to Social Security] made work more attractive relative to retirement.... The shift from defined benefit to 401(k) plans eliminated built-in incentives to retire.... [W]orkers covered by 401(k) plans retire a year or two later on average than similarly situated workers covered by a defined benefit plan.... Life expectancy has increased, and much of the evidence suggests that people are healthier as well."

Rules for Calculating Required Minimum Distributions
"In reality, retirees who are actually using their retirement accounts for retirement spending may well be withdrawing more than enough to satisfy their RMD obligations anyway. However, given the substantial penalties involved for failing to take the full amount of an RMD -- a 50% excise tax for any RMD shortfall -- it is crucial to ensure that the RMD is calculated correctly (and withdrawn in a timely manner)!"
Nerd's Eye View

A Tax-Advantaged Way to Distribute Employer Stock from Retirement Plans
"[T]he net unrealized appreciation distribution strategy ... allows for capital gains treatment of any embedded appreciation, rather than having it taxed as ordinary income.... A key requirement here is that the distribution must be considered a lump-sum distribution."
Morningstar Advisor

Retirement Readiness Peer Comparisons: Best Practices and Recent Innovations
"Sufficiently preparing for retirement can be a daunting task for many participants, but properly gauging retirement readiness can be equally arduous. Peer comparison features provide an intuitive way to help participants understand their progress toward achieving their retirement income goals, offering valuable context to data that may otherwise be less meaningful to participants."
Corporate Insight


A Nobel Laureate Focused on 401(k)s
"Professor Thaler was already famous in our community for highlighting the possibilities where behavioral economic tools and processes could be deployed in retirement savings plans.... [T]he Pension Protection Act of 2006 ... specifically confirmed that automatic features were permitted and clarified processing ... Because of this guidance and because Professor Thaler and Benartzi showed us the way, we now have tens of millions of new participants in retirement savings plans, and trillions of new savings."
Plan Sponsor Council of America [PSCA]

Benefits in General

DOL Proposes Delaying Implementation of Disability Claim Regs
"There will be a 15-day period for comments on the proposal to extend the applicability date. There will also be a 60-day period to submit 'comments providing data and otherwise germane to the examination of the merits of rescinding, modifying, or retaining the rule' ... Carriers insuring approximately 18 million LTD plan participants estimated that the Final Rule would cause average premium increases of 5% to 8% in 2018, which would be expected to result in an equivalent reduction in covered employees."
Robinson & Cole LLP

How to Reduce Your ERISA Risks, and the Role of Fiduciary Liability Insurance (PDF)
28 pages. "[This report provides] an overview of the most prevalent (and serious) types of ERISA claims currently being filed ... discusses a variety of plan-drafting and plan administration measures that plan sponsors and fiduciaries should consider to mitigate litigation exposure ... [and] considers why fiduciary liability insurance should be deemed an integral part of any employee benefits program[.]"
Groom Law Group, for Chubb

Report: White House to Nominate EBSA Assistant Secretary
"A published report says the Trump administration is prepared to nominate a new Assistant Secretary for the [DOL]'s Employee Benefits Security Administration (EBSA). Politico Pro says that the much-anticipated nod will go to Preston Rutledge, currently Senior Tax and Benefits Counsel for the Senate Finance Committee under Chairman Orrin Hatch (R-UT) -- a position he has held since 2011."
National Association of Plan Advisors [NAPA]

Executive Compensation
and Nonqualified Plans

[Official Guidance]

Text of Instructions for IRS Forms 3921 and 3922: Exercise of an Incentive Stock Option Under Section 422(b) and Transfer of Stock Acquired Through an Employee Stock Purchase Plan Under Section 423(c) (PDF)
Rev. Oct. 2017. "Every corporation which in any calendar year transfers to any person a share of stock pursuant to that person's exercise of an incentive stock option described in section 422(b) must, for that calendar year, file Form 3921 for each transfer made during that year.... Every corporation, which in any calendar year records, or has by its agent recorded, a transfer of the legal title of a share of stock acquired by the transferor (person who acquires the shares pursuant to the exercise of the option) pursuant to the transferor's exercise of an option granted under an employee stock purchase plan and described in section 423(c) (where the exercise price is less than 100% of the value of the stock on the date of grant, or is not fixed or determinable on the date of grant), must, for that calendar year, file Form 3922 for each transfer made during that year."
Internal Revenue Service [IRS]

on the BenefitsLink Message Boards

Form 5330: Must Plan Sponsor as Well as the Paid Preparer Sign It?
"Form 5330 has places for the filer (plan sponsor) and paid preparer to sign. It's not clear to me from the instructions if both of them need to sign. Do they? Also, I see that the Form 5330 instructions only provide a mailing address for filing, which suggests that they need original signatures, but the instructions also allow for the paid preparer to electronically sign. Is it true that this form must be mailed and that the plan sponsor's signature must be a wet signature?"
BenefitsLink Message Boards

Participating Employer Gone Out of Business, So How to Adopt Amendment and Restatement?
"We have a pre-approved plan document that requires participating employers to adopt the plan by signing a Participation Agreement, which is also signed by the signatory employer. Participating Employer X and the signatory employer signed a Participation Agreement properly in 2012, and again to mark Participating Employer X's cessation of participation in 2015. During the restatement process, it has been discovered that Participating Employer X is now totally out of business. Participating Employers are supposed to sign a Participation Agreement for the plan right now, in order to adopt the terms of the restated, pre-approved plan. But Participating Employer X does not exist. The pre-approved plan does not address this situation. Do others think that it would be sufficient for the signatory employer to add a note to the restated plan indicating that the Participating Employer cannot be found, and attach the old Participation Agreement that was originally signed?"
BenefitsLink Message Boards

Can Profit Sharing Contribution Be Used to Correct a Failed ADP Test?
"Client has 401k/profit sharing plan, not safe harbor. ADP test failed for 2016. Can profit sharing contribution, as long as 100% vested, be used to satisfy ADP? And the balance of any profit sharing contribution be allocated as a profit sharing contribution for the year?"
BenefitsLink Message Boards

Press Releases

PSCA to Host Two NQDC Webinars; Opens NQDC Survey
PSCA [Plan Sponsor Council of America]

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David Rhett Baker, J.D., Editor and Publisher
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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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