Retirement Plans Newsletter

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Senior Pension Administrator
Primark Benefits
in CA

401(k) Retirement Plan Administrator
Nicholas Pension Consultants
in CA

Benefits Assistant
in AZ

Retirement Plan Relationship Manager
Heartland Financial USA
in IA, IL, WI

Retirement Plan Client Services Manager
Heartland Financial USA
in IA

Client Relationship Manager
The Retirement Advantage, Inc.

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[Official Guidance]

PBGC Guarantee Limit for Single-Employer Plans Increases for 2018
"[PBGC has announced] the guarantee limits for single-employer plans that fail in 2018.... The increase is not retroactive; payments to retirees whose plans failed before 2018 will not change.... [If] a plan fails in 2018 during a plan sponsor's bankruptcy that began in an earlier year, the limits in effect for that earlier year apply. The guarantee for multiemployer plans has not changed."
Pension Benefit Guaranty Corporation [PBGC]


Learn Why ASC Should Be Your Plan Document Provider

Sponsored by ASC

Get an inside view at how ASC's Plan Document System can help you do more in less time. Watch this short video to see for yourself!

[Official Guidance]

Text of House Committee Report on Proposed Bill to Repeal the DOL Fiduciary Rule (PDF)
98 pages. "The Committee on Education and the Workforce, to whom was referred the bill [H.R. 2823, the Affordable Retirement Advice for Savers Act] to amend [ERISA] and the Internal Revenue Code of 1986 to ensure that retirement investors receive advice in their best interests, and for other purposes, having considered the same, report favorably thereon with an amendment and recommend that the bill as amended do pass."
114th Congress

[Guidance Overview]

SOA Mortality Improvement Scale MP-2017 Released
"Since the updated scale reflects more recent experience, it is likely a better estimate of future improvement than scale MP-2016, and with it comes the added benefit of lower liabilities. Sponsors who finalized accounting results earlier in the year may receive requests from auditors to quantify the effect of the new scale."
Cowden Associates, Inc.

Missing Participants with Unpaid Required Minimum Distributions: IRS Provides New Audit Guidance
"[A]uditors are instructed not to challenge a plan as violating the RMD rules for failing to commence or make an RMD to a missing participant or beneficiary if the plan has taken [specific] steps ... This guidance, which applies to audits of cases that were already open on October 19, 2017, and to cases opened after that date, will be helpful for plans that have unpaid RMDs and are undergoing IRS audits now or in the future."
Segal Consulting

Missing Your 401(k) Check? The Federal Government Is Here to Help You
"The agency that insures America's private pension plans already has a database to help participants in traditional pension plans search for unclaimed money. The PBGC has a pending final rule ... that would extend its program to many more missing participants. Under the proposed rule, which was issued in September 2016, the PBGC would also offer a similar program to individual account defined contribution plans, such as 401(k) and profit-sharing plans. Such plans would have the option of transferring benefits to the PBGC."
Bloomberg BNA


A simple, illustrative guide for pension plan sponsors.

Sponsored by Russell Investments

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.

Wells Fargo Gets Industry Support in Appeal Challenging Use of In-House Target Date Funds
"The U.S. Chamber of Commerce and other prominent industry groups are backing Wells Fargo & Co. in an appeal challenging the in-house target date funds in the company's 401(k) plan ... The groups are urging the U.S. Court of Appeals for the Eighth Circuit to uphold a decision dismissing a challenge to the affiliated target date funds in the 401(k) plan for Wells Fargo employees."
Bloomberg BNA

If Retirement Pros Set Tax Policy Instead of Politicians, This Is What We'd Get
"These are the experts who live on the front lines of the retirement industry. They see, first hand, what works and what doesn't work. They have no political favors to pay back, but they do have to worry about getting 're-elected' (i.e., retaining their clients). As a result, they may be more accountable when it comes to acting in the best interests of retirement savers. That's because they have a direct fiduciary liability for their advice and actions that no elected official can ever have. Nearly every financial adviser we spoke with agreed only one policy change would get people to save more for retirement: Increasing the cap on retirement contributions."
Fiduciary News

Current Pension Outlook, October 2017
"Republicans considering Rothification after first $2,400 of 401(k) contributions ... Healthcare Executive Order -- implications for Open MEPs? ... House Committee approves bill repealing fiduciary rule ... ERIC files ERISA preemption suit against Oregon retirement program ... Trump names new EBSA head."
October Three Consulting


American Academy of Actuaries' Position Statement on Retirement Income Options in Employer-Sponsored Defined Contribution Plans (PDF)
"By offering retirement income and longevity risk management options in DC plans, employers can give working Americans additional tools to enhance their retirement security and financial well- being. The American Academy of Actuaries supports this goal through the development of related solutions, tools, policies, and education and stands ready to assist policymakers in their development."
American Academy of Actuaries

Benefits in General

District Court Highlights the Importance of Careful Adherence to ERISA Claim Procedures
"To the extent the participant failed to provide the necessary information, the court held it was the claim fiduciary's obligation to advise him of this fact in a timely and precise fashion, which the claims fiduciary failed to do.... Finding that the claims fiduciary failed to respond to the participant's communications in a meaningful way, the court ruled that the participant was excused from the requirement of administrative exhaustion, and further that is would not apply the deferential review standard, but would review the plaintiff's benefits claim 'de novo'." [Coleman v. Alcatel-Lucent USA, Inc., No. 16-108 (N.D. Ala., Sept. 1, 2017).
Hodgson Russ LLP


Joint Comment Letter to DOL on Proposed Extension of Applicability Date for Regs Governing Claims Procedure for Plans Providing Disability Benefits
"[We] strongly support delaying the applicability date of the Regulation for a period sufficient to allow the Department to consider the effects of the Regulation and any necessary changes. Not only does a 90-day delay provide insufficient time for insurance carriers and employers to implement changes to comply with the Regulation, but we also do not believe the Proposed Delay will provide sufficient time for the Department to review comments and data provided by stakeholders, determine next steps, and issue a proposed final rule consistent with the requirements of the Administrative Procedure Act."
American Benefits Council and 15 other employer organizations

on the BenefitsLink Message Boards

Purchasing Annuities on Termination of Puerto Rico Pension Plan
Puerto Rico-only (not dual qualified) defined benefit plan is terminating. The U.S. financial institution says it can only sell annuities to the plan if it has some kind of presence in the United States. Anyone familiar with where this rule can be found and what qualifies as a minimum "presence"?
BenefitsLink Message Boards

Rollover of Loan; Effect on Payment Schedule
Plan allows for loans to be rolled over, but does not allow new loans to be taken. Participant rolls over a loan from previous employer (employer had weekly pay frequency, so 52 loan payments were made per year). New plan has bi-monthly pay frequency (24 pay periods per year). Because the new plan does not allow for loans, should the amortization schedule stay the same as it was with the previous employer, or can it be changed to a bi-weekly schedule?
BenefitsLink Message Boards

Timing of Amendment to Remove Top 20 Election
Can an HCE Top 20 election in a volume submitter document be amended out any time before year-end?
BenefitsLink Message Boards

Timing of Death Distributions: Four Beneficiaries
Deceased participant has four beneficiaries (25% each). Should all four claims be processed at the same time, or can they be done as received (each person receiving 25% of the account value as of the date of processing)?
BenefitsLink Message Boards

ACP Testing for Employees Excluded from Match but Not from Deferral Opportunity
Suppose you have immediate eligibility for deferrals, but are in a classification that is excluded from receiving an employer match. The language in 1.401(m)-5 would seem to say you're not included in the ACP test because you are not "eligible" to receive a match. Correct?
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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