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October 18, 2017 logo logo
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Webcasts, Conferences

Tales from the Crypt, Part XVI: Procurement Concepts for ERISA Plan Services
October 26, 2017 in OH
Worldwide Employee Benefits Network [WEB] - Cleveland Chapter

IRA Required Minimum Distributions
December 14, 2017 WEBCAST

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[Guidance Overview]

IRS Publishes New Mortality Tables, Affecting DB Plan Benefits
"The new mortality table will increase the amount of lump-sum distributions payable by a private sector plan ... by 3% to 5%, depending on the age of the participant, when compared to the lump sum using the table for 2017.... For a retirement age of 65 and a 5.5% interest rate, the lump-sum equivalent of the maximum dollar limit of $215,000 will increase by approximately 3.5% (about a $90,000 increase)."

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[Guidance Overview]

2017 Hurricane Disaster Relief Guidance for Employers with Retirement Plans
"Individuals whose principal residence is within a presidentially declared disaster area affected by Hurricane Harvey, Irma, or Maria -- and who have sustained an economic loss as a result -- are eligible to request 'qualified hurricane distributions' from their IRA or employer-sponsored retirement plan (plan permitting).... Broader relief applies to individuals who live in, or have a business within, a presidentially declared disaster area.... certain features of permissible loan programs have been relaxed.... [and] they may be eligible for extensions on deadlines"

The History and Future of MEPs and PEPs (PDF)
"The consensus today is that the question is not if, but when, [multiple employer plan (MEP)] legislation will pass, although nothing is certain. So what does this actually mean? The answer is found in both the history and the practical realities of MEP law, regulation and industry practice."
Pentegra Retirement Services. via Plan Consultant

Choosing the Right Retirement Plan for Small Business Owners
"To better maximize the potential for success in retirement, it is essential for small business owners to understand the basics regarding the retirement options available.... Many choices are available ... The most popular plans are the SIMPLE IRA and Solo (Individual) 401k. The pros and cons of each plan are discussed [in this article]."
National Association for the Self-Employed [NASE]

Interesting Angles on the DOL's Fiduciary Rule, Part 66
"Because of the change in the definition of fiduciary advice (which applied on June 9, 2017), all advisors to retirement plans need to review their prior 408(b)(2) disclosures to see if changes are necessary.... [Would] the following types of disclosures [be] narrow enough to provide information that allows the plan fiduciaries to make those determinations? [1] For mutual funds, the broker-dealer may receive between 0% to 10% front-end commissions. [2] As ongoing trailing commissions, the compensation may range from 0% to 2% per year. [3] The compensation for managed accounts will not exceed 2.5% per year."


A simple, illustrative guide for pension plan sponsors.

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This practical overview for corporate plan fiduciaries is not only a great reference work -- it's a high level guide that makes an excellent training tool for new board and investment committee members.

Phillips 66 Participants Challenge Continued Investment in Stock of Former Parent Company
"[The lawsuit] alleges that the investment committee of a company's DC plan breached its duties of prudence and diversification under ERISA for continuing to invest plan assets in the stock of the parent company following the spinoff of the subsidiary ... Noting that the plan held investments of nearly $1 billion (approximately 25% of its assets) in the ConocoPhillips funds, the plaintiffs contend that the plan's overly concentrated position caused them to lose millions of dollars as the price of ConocoPhillips stock fell during the class period." [Schweitzer v. Inv. Cmte. of the Phillips 66 Savings Plan, No. 17-3013 (S.D. Tex., complaint filed Oct. 9, 2017)]
National Association of Plan Advisors [NAPA]

Participants Seek Final Approval of $98.3 Million Settlement of 'Church Plan' Case with Bon Secours Health System
"Thousands of class members affected by seven Bon Secours Health System Inc. pension plans ... asked a Maryland federal court [on Oct. 13] to give final approval to a settlement that would require the health care organization to provide $98.3 million to bolster funding. The settlement agreement calls for the hospital to contribute $14 million a year for the next seven years to the seven plans at issue ... In addition, the settlement calls for the hospital to pay another $300,000 to benefit about 500 people who have unique circumstances under one of the plans." [Hodges v. Bon Secours Health System, Inc., No. 16-1079 (D. Md., proposed settlement submitted Oct. 13, 2017)]
Cohen Milstein

Plaintiff's Attorneys to Get Almost $6 Million from Tibble v. Edison Challenge to Plan Investment Fees
"The recommendation of the parties ... is that the law firm of Schlichter Bogard & Denton LLP will receive $5.8 million for all attorney fees and taxable costs and non-taxable litigation expenses, in exchange for which plaintiffs and their attorneys (including Class Counsel) waive and forever relinquish their right to seek any additional payment of attorney fees or costs from defendants. Assuming the court concurs with the recommendation, that sum is to be paid to the law firm on or before Nov. 1, 2017."
National Association of Plan Advisors [NAPA]

2016 Funding Status Update for Multiemployer Plans Seeking MPRA Benefit Suspensions
"Now that 5500 filing season is over and most of the 2016 forms are searchable on the DOL website [this article provides] the status of union plans that have applied for benefit suspensions under MPRA with links to their latest 5500 filing and a focus on the worst funded plan with a reported funded ratio of 2.99% (yes that is the funded ratio and not the RPA interest rate)."


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Assessing the Optimal Shape of Retirement Planning
"[E]ach shape leads to its own unique views on what is 'best' for retirement planning, and what is considered 'safe' -- from cash under the curve approach (the most conservative portfolio on the efficient frontier), to the lifetime annuity under the triangle approach (guaranteeing that essential expenses are covered for life), to a laddered portfolio of TIPS bonds with the rectangle approach (aiming to perfectly match assets to liabilities and immunize the household against future changes in interest rates or inflation).... [T]he best approach for retirement planning may incorporate all three[.]"
Nerd's Eye View


Teachers and Schools Are Well Served by Teacher Pensions
"While attrition is high in the first years, teachers who end up leaving the profession are a small share of the teaching workforce and at a minimum recover their contributions to the pension plan plus interest ... [T]eachers who spend their careers in one district earn higher benefits because all their service credits are tied to their final salaries, typically averaged over three to five years.... A shift to account-style plans would not benefit most teachers and would increase teacher turnover to the detriment of students."
Economic Policy Institute

on the BenefitsLink Message Boards

403(b) Safe Harbor Match and Grandfathered Formula
"A 403(b) plan currently has a non-elective employer contribution. It is proposed to implement a soft freeze on this formula, allowing existing participants to continue to receive the non-elective contribution while new participants will receive a matching contribution. Can this new contribution be designed as a safe harbor match? I guess the technical point is can the plan be restructured into two component plans for the different employer contributions that each satisfy 410(b), and then satisfy the safe harbor match requirements by including only those participants eligible for match (i.e., only the new participants)?"
BenefitsLink Message Boards

Required Minimum Distribution to an Alternate Payee
"Participant is age 72 (i.e. has started required minimum distributions). His ex-wife will not receive her share of the account pursuant to a QDRO until later this year. Must she pay her share of this year's RMD? She had no account to value as of 12/31/2016. Hence I say 'no.' Agree?"
BenefitsLink Message Boards

Method Change Approvals
I know the 5500 deadline was just a few days ago, but hasn't anyone read the new revenue procedures on method changes? I expected to see a great deal of discussion on the 'data elements' included in Rev. Proc. 2017-56 and 2017-57. How is it that IRS decided that what we use as assumed compensation for the coming year is part of the funding method, not an assumption? Or changing the spouse assumed age from a constant difference to actual ages? What did I miss?
BenefitsLink Message Boards

Code Section 403(b)(9) Limits on Contributions for Pastor
"I am trying to understand employer contribution limits to 403b9 plans and 'includible compensation' for a church pastor who is behind on her retirement savings and trying to maximize total contributions. The church is willing to match the pastor's contributions up to IRS limits. For illustration, consider an ordained pastor age 58 of a church with a qualifying 403(b)(9) plan. Her total church compensation is $64,000 of which $20,000 is designated by the church session as housing allowance. From her remaining $44000 she elects to contribute the maximum $24,000 to her 403(b)(9) plan through salary reduction, which includes the $6000 catch-up contribution. She also contributes $2,500 for a qualifying Section 125 health care Flexible Spending Account. How much can the church employer contribute to her 403(b)(9) plan? My understanding is that total contributions from employer and employee is the lessor of $60,000 or 100% of 'includible compensations.' But in the example does the $2,500 FSA contribution and/or the $6000 catch-up contribution considered includible compensation?"
BenefitsLink Message Boards

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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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