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Atlantic Pension Services Inc
in PA

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Fringe Benefit Group
in DC, DE, FL, GA, MD, SC, VA

Defined Benefit Administrator
TPA firm
in AZ

ERISA Attorney
Schwartz, Steinsapir, Dohrmann & Sommers
in CA

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in NC

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[Guidance Overview]

IRS Finally Answers Pension Plan Mortality Questions (PDF)
"While current tables are based on data through 1994, the enhanced tables incorporate data through 2009 and projection tables reflect data through 2013. In general, the tables defined in Notice 2017-60 anticipate that plan participants will live longer and receive benefits over a longer period of time. This will drive up costs for the majority of plan sponsors who can anticipate a 3% to 5% increase in liabilities as a result of the change."


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[Guidance Overview]

IRS Guidance on Pension Plan Mortality Tables and Funding Methods
"While plan sponsors are liable for accrued benefits without regard to the mortality assumptions, the new tables may result in accelerated contributions to meet minimum funding requirements and may have an adverse impact on plans that are close to the 80% or 60% threshold of the benefit restriction rules. The cost of lump sums also is expected to increase, which makes certain de-risking opportunities (e.g., lump sum windows) more costly. PBGC variable premiums also are expected to increase,"
Trucker Huss

The Fiduciary Duty to Locate Missing Participants
"The DOL has only published guidance outlining the procedures that a terminating retirement plan should follow to locate missing participants, and that ongoing plans should follow before making automatic rollover distributions to an IRA for participants who are owed small-sums (between $1,000 and $5,000). Despite this lack of guidance, the DOL has been asserting in recent audits that a retirement plan's failure to identify and locate a missing participant is a breach of fiduciary duty ... even when the retirement plan has followed its procedures and has relatively few missing participants."
Vorys, Sater, Seymour and Pease LLP

DOL Targets Retirement Plans with Missing Participants
"By examining Form 5500 annual reports, the DOL discovered that some plans were reporting a larger number of terminated vested participants who were not receiving benefits. Worse yet, the DOL was able to contact a significant number of these 'missing' participants by simply sending a certified letter to their last known address. As a result, the DOL has reportedly initiated a national audit campaign targeting plans with missing participants with a view towards treating lackadaisical efforts to locate them as a breach of fiduciary duty. And, the IRS can weigh in with additional penalties for failure to make RMDs to those ex-employees who have attained age 70-1/2."
The Retirement Plan Blog

Qualified Retirement Plan Amendments: 2017 Year-End Update (PDF)
"This advisory reminds plan sponsors of deadlines for amending qualified retirement plans and certain year-end legal updates."
Alston & Bird


Things Have Changed Are You Up-To-Date?

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Prohibition on Loans from 403(b) Plan Participant's Account to Church-Related Employer Applies to Indirect Loans
"[IRS Chief Counsel Advice Memorandum 201742022] presented two situations ... In the first, one of the plan's investment options was an investment in limited liability company (LLC) shares where the LLC's primary function was to offer loans to the employer. The investment return to the participant was the interest on the loan paid by the employer. The LLC was not controlled directly or indirectly by the church. In the second, one of the plan's investment options was an investment in an LLC controlled either directly or indirectly by the employer, but offering loans to the employer was not the LLC's primary function."
Wolters Kluwer Law & Business

Fixed-Income Factors in Target Date Strategies
"Fixed-income factors are not as widely discussed as equity factors, but they are equally important in designing a target date portfolio in an attempt to improve participant outcomes. Just as within equities, factors are features of assets that may give better risk/return payoffs over time as they help filter the fundamental macroeconomic forces that drive returns. Within fixed income, these factors can be broadly categorized as being related to interest-rate sensitivity, credit exposure, and inflation sensitivity."
Wells Fargo Asset Management

Audit Quality Series, Part 2: Reducing the Chances of Auditor-Related Problems
"[Y]ou can't simply look at the number of audits a firm performs to determine if you have a potential problem. There are many firms doing top quality work who do fewer than 100 audits. You need to look for indications of potential problem areas such as: [1] Lack of experience in the EBP audit arena; [2] Negative or absent peer reviews; [3] DOL findings or referrals based on 'Unacceptable' filings; [4] Lack of significant EBP-specific training for partners and staff; [5] Not being a member of AICPA's Employee Benefit Plan Audit Quality Center."
Fiduciary Plan Governance, LLC

Corporate Pension Funded Status Improves by $7 Billion in October (PDF)
"The deficit fell to $266 billion primarily due to a robust investment gain of 1.19% during October.... As of October 31, the funded ratio increased to 84.7%, up from 84.3% at the end of September. Factoring in September's $25 billion gain, the funded status has improved by $32 billion since August 31."

TSP Hardship Withdrawal Programs Extended
"Officials at the 401(k)-style retirement savings program for federal employees announced Monday that they would extend the deadline for workers and retirees impacted by Hurricane Maria to make withdrawals from their accounts under relaxed rules.... The original deadline for submissions was set for Jan. 24, but ... federal employees and retirees now have until March 8 to request a hardship withdrawal. The funds must be distributed by March 15."
Government Executive

Benefits in General

Hearing Set for EBSA Nominee
"On Nov. 15 the [Senate Health, Education Labor & Pensions (HELP) Committee] will question Preston Rutledge, President Trump's candidate to head the EBSA, who was nominated last month. Rutledge currently serves as senior tax and benefits counsel on the Majority Tax Staff of the U.S. Senate Finance Committee, where his responsibilities include employee benefits, retirement issues, tax-exempt organizations, health tax issues and the tax provisions of the [ACA]."
National Association of Plan Advisors [NAPA]

on the BenefitsLink Message Boards

Hurricane Relief Distribution and Loan Documentation
Does the special special Hurricane relief under Announcement 2017-13 apply only to people who have their primary residence in an area affected by the hurricane? In particular, if someone owns a vacation home in an affected area, would they be able to obtain a hardship or loan under the bill? I'm assuming it's intended to assist those who live in the affected areas, but since the IRS is also relaxing procedural and administrative rules that normally apply to retirement plan loans and hardship distributions, what documentation would you considered as required?
BenefitsLink Message Boards

Need to Restate 403(b) Plan Before It Terminates?
I was explaining the restatement process to a plan sponsor with an ERISA 403(b) plan, and the director said that he intends to terminate the plan at the end of 2017 anyway (there are only 5 participants, all employed, so assume payouts won't be a problem), so he won't need to restate onto the pre-approved document. In 401k-land, plan documents have to be up-to-date as of the date of the plan termination. How would that translate here?
BenefitsLink Message Boards

Defined Benefit Accrual for Sole Proprietor
In a plan with 500 hours required for the annual accrual, is it reasonable to credit an accrual when there is no net earned income? Likewise, is it reasonable to not credit an accrual on the basis of no income, therefore not 500 hours? Would you look at gross income before deciding on an answer? Do you know of any IRS guidance on this question?
BenefitsLink Message Boards

Credit for Service for Vesting Purposes When Salaried Employee Works Overtime?
A year of service for vesting is 1,000 hours in a plan year. A SALARIED employee worked 5 months and was salaried for 881 hours during that time, but he worked overtime and had actual hours worked of 1,055. Would he get a year of vesting since he actually worked over 1,000 hours? My first thought is yes.
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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