Retirement Plans Newsletter

November 21, 2017 logo logo
Get Health & Welfare News | Advertise | Unsubscribe | Previous Issues | Search


Webcasts, Conferences

ACA: Reporting Boot Camp and Enforcement Update
December 1, 2017 WEBCAST
McDermott Will & Emery LLP

Participant Loan Failures: Self-Correction vs. VCP Correction
December 19, 2017 WEBCAST

Ethical Dilemmas in Executive Compensation
December 5, 2017 in NY
Worldwide Employee Benefits Network [WEB] - New York Chapter

Proxy Season 2018 and Tax Reform Update: ISS, Pay Ratio, Other Hot Topics
December 7, 2017 WEBCAST
American Bar Association Joint Committee on Employee Benefits [JCEB]

►See 90 Upcoming Webcasts and Conferences

►See 1348 Recorded Webcasts


New Topics on the BenefitsLink Message Boards

New Comments and Topics

All Topics, Grouped by Forum

Subscribe Now to This Newsletter (free)

We also publish the BenefitsLink Health & Welfare Plans Newsletter (free): Subscribe Now

[Official Guidance]

Employee Stock Ownership Plan (ESOP) LRM and Information Package, October 2017 (PDF)
43 pages. Oct. 2017, published online Nov. 2017. "This information package contains samples of plan provisions that satisfy certain requirements of the Code applicable to ESOPs. Such language may or may not be acceptable in specific plans depending on the context in which used. To expedite the review process, plan sponsors are encouraged to use the language in this package. A partnership or a joint venture is not eligible to maintain an ESOP. However, a partnership or a joint venture that has elected to be taxed as a corporation may be a Participating Employer as defined in this ESOP LRM." [Editor's note: the Oct. 2017 revision appears to replace the version released in June 2015.]
Internal Revenue Service [IRS]


Fulfill Your Ethics Credits for 2017!

Sponsored by ASC

Get an overview of ethical responsibilities, an explanation of IRS Circular 230 from an employee benefits perspective, the most significant ethical concerns of the IRS Office of Professional Responsibility and more. Register Now!

[Guidance Overview]

Puerto Rico Treasury Department Issues Post-Hurricane Rules for Qualified Retirement Plan and IRA Distributions and Loans
"As a result of [Administrative Determination No. 17-29], employers must decide whether to amend their plans to incorporate these special rules. Notably, in the event that the employer decides to amend the plan accordingly, AD 17-29 is silent as to which procedure a participant must followed to receive a favorable tax treatment, in the event he/she has already received Eligible Distributions within the Eligible Period prior to the effective date of AD 17-29."

[Guidance Overview]

2017 Year-End 'To Do' List for Qualified Retirement Plan Sponsors
Categories: [1] all qualified plans; [2] section 401(k) plans; [3] defined contribution plans other than section 401(k) plans; [4] defined benefit plans; and [5] section 403(b) plans.
Snell & Wilmer

Wells Fargo Sued Over In-House 401(k) Funds, Again
"The claims echo those in a 2016 lawsuit that Wells Fargo defeated when a federal judge determined that the company couldn't be liable under [ERISA] for 'failing to choose the cheapest fund' for its 401(k) plan.... Wells Fargo's win in that case was a rarity in ERISA litigation. Of more than two dozen financial companies to have been sued over in-house 401(k) investments in the past few years, Wells Fargo is the only one to have had all claims against it dismissed on their merits."
Bloomberg BNA

New Complaint Alleges Excessive Fees in NYU Plans
"[T]he participants allege that instead of using the plans' bargaining power to reduce expenses and exercising independent judgment to determine what investments to include in the plans, the defendants squandered that leverage by allowing the plans' conflicted third-party service providers -- TIAA-CREF and Vanguard -- to dictate the plans' investment lineup, to link its recordkeeping services to the placement of investment products in the plans, and to collect unlimited asset-based compensation from their own proprietary products."


Things Have Changed Are You Up-To-Date?

Sponsored by ASPPA

Keep up to date on the latest rules and regulations with the ERISA Outline Book, THE resource for information on qualified plans. Choose from two great formats; hardcopy or online, including access to a fully searchable and cross-referenced website.

21% of Investment Managers Plan to Lower Fees
"Investment managers are allocating a lower percentage of their revenue to bonuses: 18%, down from 24% in 2014. However, the amount of revenue allocated to cover the cost of operations increased from 42% to 60%.... The percentage of investment management firms that offered performance-based fees dropped from 75% in 2014 to 64% in 2016."

Tax Reform and Accumulated Leave ('Special Pay') Plans
"The proposed Senate tax reform bill ... eliminates the ability of 403(b) plans to accept contributions for former employees for up to five years following termination of employment.... The result will be greater employment taxation on the employer and former employee, and more immediate income taxation on the employee."
Carlton Fields

How the Senate Finance Committee's Tax Reform Bill Would Impact Retirement Plans
"Elimination of IRA 're-characterization' ... Extension of time to roll over plan loan offsets ... Elimination of special 403(b) and 457(b) catch-up rules ... Coordination of 403(b) and 457(b) contribution limits ... Elimination of 403(b) contributions for former employees."
J.P. Morgan Asset Management

Roth IRAs: Favored for Annual Contributions, Neglected for Rollovers from Company Plans
"The tax on moving funds into a Roth IRA may be sharply reduced by making a series of partial rollovers ... [which] can prevent the taxable income on conversions from piling up into higher tax brackets. Converting just 5% or 10% of plan funds every year can convert them all over time with minimum income tax cost."
Slott Report

DCALTA's Jonathan Epstein Explains Alternative Investments for Retirement Plans
"Like with traditional investments, a similar due diligence process should be applied when selecting and monitoring these types of investments. One main consideration is analyzing what risk/return expectations are desired of each non-traditional investment being considered. Other key factors that plan fiduciaries should consider include cost, liquidity, transparency, and the ability to analyze risk-adjusted net performance [said Jonathan Epstein, president of DCALTA (the Defined Contribution Alternatives Association)]."
Fiduciary News


American Academy of Actuaries Comment Letter to PBGC on Proposed Modification to 2017 Form 5500 Schedule MB (PDF)
"PBGC is proposing that basic supporting documentation ... be included as an attachment to Line 4f.... [T]he additional information would enhance the ability of PBGC to perform projections for plans in critical and declining status or which are otherwise approaching insolvency.... [With] one exception ... the additional information will not result in a significant burden for most plan actuaries, as they will have already performed the calculations requested in the supporting documentation."
Multiemployer Plans Committee, American Academy of Actuaries

Benefits in General

[Official Guidance]

Text of IRS and DOL 'Extension of Time Frames' for Employee Benefit Plans, Participants and Beneficiaries Affected by Hurricane Maria
12 pages. "With respect to plan participants, beneficiaries, qualified beneficiaries, or claimants directly affected by Hurricane Maria ... group health plans, disability and other welfare plans, pension plans, and health insurance issuers offering coverage in connection with a group health plan must disregard the period from September 17, 2017 through March 16, 2018 for such plan participants, beneficiaries, qualified beneficiaries, or claimants located in Puerto Rico, and must disregard the period from September 16, 2017 through March 15, 2018 for such plan participants, beneficiaries, qualified beneficiaries, or claimants located in the United States Virgin Islands, when determining any of the following time periods and dates:

  • The 30-day period (or 60-day period, if applicable) to request special enrollment under ERISA section 701(f) and Code section 9801(f);
  • The 60-day election period for COBRA continuation coverage under ERISA section 605 and Code section 4980B(f)(5);
  • The date for making COBRA premium payments pursuant to ERISA section 602(2)(C) and (3) and Code section 4980B(f)(2)(B)(iii) and (C);
  • The date for individuals to notify the plan of a qualifying event or determination of disability under ERISA section 606(a)(3) and Code section 4980B(f)(6)(C);
  • The date within which individuals may file a benefit claim under the plan's claims procedure pursuant to 29 CFR 2560.503-1;
  • The date within which claimants may file an appeal of an adverse benefit determination under the plan's claims procedure pursuant to 29 CFR 2560.503-1(h);
  • The date within which claimants may file a request for an external review after receipt of an adverse benefit determination or final internal adverse benefit determination pursuant to 29 CFR 2590.715-2719(d)(2)(i) and 26 CFR 54.9815-2719(d)(2)(i), and
  • The date within which a claimant may file information to perfect a request for external review upon a finding that the request was not complete pursuant to 29 CFR 2590.715-2719(d)(2)(ii) and 26 CFR 54.9815-2719(d)(2)(ii)....
"With respect to group health plans, and their sponsors and administrators, that are directly affected by Hurricane Maria ... the period from September 17, 2017 through March 16, 2018 for those located in Puerto Rico, and the period from September 16, 2017 through March 15, 2018 for those located in the United States Virgin Islands, shall be disregarded when determining the date for providing a COBRA election notice under ERISA section 606(c) and Code section 4980B(f)(6)(D)."
Employee Benefits Security Administration [EBSA], Department of Labor [DOL]; Internal Revenue Service [IRS], Department of the Treasury

[Official Guidance]

Text of DOL Additional Relief for Employee Benefit Plans, Participants and Beneficiaries Impacted by Hurricane Maria and October 2017 California Wildfires
"The [DOL] will not treat any person as having violated the provisions of Title I of ERISA solely because they complied with the verification procedures of IRS Announcement 2017-15.... [The DOL] will not -- solely on the basis of a failure attributable to Hurricane Maria -- seek to enforce the provisions of Title I with respect to a temporary delay in the forwarding of such payments or contributions to an employee pension benefit plan to the extent that affected employers, and service providers, act reasonably, prudently and in the interest of employees to comply as soon as practical under the circumstances.... With respect to blackout periods related to Hurricane Maria, the [DOL] will not allege a violation of the blackout notice requirements solely on the basis that a fiduciary did not make the required written determination....

"The Department recognizes that [group health] plan participants and beneficiaries may encounter an array of problems due to Hurricane Maria and the California Wildfires. The guiding principle for plans must be to act reasonably, prudently, and in the interest of the workers and their families who rely on their health plans for their physical and economic well-being. Plan fiduciaries should make reasonable accommodations to prevent the loss of benefits in such cases and should take steps to minimize the possibility of individuals losing benefits because of a failure to comply with pre-established time frames."
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

[Official Guidance]

Text of DOL FAQs for Participants and Beneficiaries Following Hurricane Maria (PDF)
23 Q&As. "The Department is issuing these FAQs to assist employee benefit plans, plan sponsors, employers and employees who were impacted by the devastation caused by Hurricane Maria to better understand their rights and responsibilities under ERISA with respect to their ERISA covered employee benefit plans. In addition to providing this general guidance, the Department has also provided an extension of time for certain notices required to be provided under ERISA for those impacted by these disasters."
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

[Official Guidance]

Text of DOL FAQs for Participants and Beneficiaries Following Hurricanes Harvey, Irma, and the California Wildfires (PDF)
22 Q&As. "My employer's place of business is closed. I cannot locate my plan administrator. Who do I contact to file a claim for benefits, or to obtain replacement identification documents? ... I think I may be losing my health coverage as a result of the events of one of the hurricanes or the California Wildfires. What can I do to obtain other health coverage? ... My employer's place of business is closed due to the events of one of the hurricanes or the California Wildfires. Who should I contact to file a claim for retirement benefits or make sure that I will continue to receive my pension payments on time? ... How can I make changes in the way my 401(k) plan account is invested if it was affected by the events of one of the hurricanes or the California Wildfires? ... If my employer faces economic difficulties as a result of the events of one of the hurricanes or the California Wildfires, can my employer terminate my retirement plan, and if so, what happens to my benefits? ... All of the records concerning my employment with the retirement plan sponsor and my participation in the retirement plan were destroyed as a result of the events of one of the hurricanes or the California Wildfires. What do I do?" [Editor's note: this document seems to supercede the FAQs for Participants and Beneficiaries Following Hurricane Harvey issued Aug. 29, 2017. It seems to contain few new provisions with respect to such persons, if any.]
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

on the BenefitsLink Message Boards

Distribution Owed for One Cent
In a profit sharing plan that had reallocated forfeitures, three of the participants were allocated one cent in forfeitures. Does anyone have experience making a check payable to the participant for one cent? I see another participant has a balance of thirteen cents and while it is small, that isn't as bad as one cent. The small reallocation came from a relatively new participant who received their share of reallocated forfeitures, was not fully vested, and then terminated their employment, thus creating a forfeiture of that small amount. We are lucky there was no loss in the plan or their one cent could have dropped lower.
BenefitsLink Message Boards

Correction for Failure to Auto-Escalate
Under Appendix A.05(8) of EPCRS, if we correct timely within the 9-1/2 months, it says we are not required to make QNECs. Are we nonetheless required to calculate earnings on what would have been the QNECs but for the relief in .05(8)? I seem to read EPCRS as saying you have to make up lost matches, and adjust that earnings, but I don't see that you have to make any corrective contribution for the missed deferral opportunity: not the principal and not any earnings. Is that correct?
BenefitsLink Message Boards

Setting Level for Mandatory Distribution at Something Less Than $1,000
Our plan document allows us to set the threshold for automatic rollovers below $1,000. We are considering lowering the amount to reduce the number of cash-outs, which sometimes become unclaimed checks. Anyone else using a lower number? Results? Is there any number considered too low?
BenefitsLink Message Boards

Press Releases

Connect   LinkedIn logo   Twitter logo   Facebook logo, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
(407) 644-4146

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, 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.

Links to web sites other than and are offered as a service to our readers; we were not involved in their production and are not responsible for their content.

Unsubscribe | Privacy Policy