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[Official Guidance]

Text of Instructions for 2018 IRS Form 1098-Q: Qualifying Longevity Annuity Contract Information (PDF)
"File Form 1098-Q, Qualifying Longevity Annuity Contract Information, if you issue any contract that is intended to be a qualifying longevity annuity contract (QLAC)." [Nov. 16, 2017; published online Nov. 28, 2017. Also available: 2018 Form 1098-Q.]
Internal Revenue Service [IRS]


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[Guidance Overview]

Should Your 401(k) Plan Provide Hurricane Relief?
"IRS announcements and a new law enable participants to take withdrawals to help relatives who were seriously impacted by hurricanes Harvey, Maria and Irma ... [and] allow plans to permit loans for relief even if the plan terms don't currently provide for loans.... [We] still have no official interpretation of the new law ... And it wasn't until very recently that we got guidance from Puerto Rico's Hacienda ... Here is a summary of the situation for plan sponsors who want to help."
Cohen & Buckmann, P.C.

[Guidance Overview]

Agencies Publish Changes to Previously Announced COLAs
"[T]he Social Security Administration announced that it was lowering the previously calculated amount, and that the 2018 taxable wage base would instead be only $128,400.... [The IRS] also made a change ... The factor by which a defined benefit plan participant's compensation is increased when applying the Section 415(b) 100%-of-compensation limit to participants who separated from service before 2018 has been changed from 1.96% to 1.97%."

[Guidance Overview]

DOL Extends Transition Period for BICE and Other Exemptions by 18 Months
"Although the extended Transition Period will help financial services firms by allowing the DOL to conclude its review of the Fiduciary Rule and the Exemptions without imposing new or interim compliance obligations, the DOL release does not provide clear compliance obligations in the short term.... Even though the DOL has stated that its enforcement posture will continue to be focused on compliance assistance, private litigants will not be[.]"
The Wagner Law Group

DOL Delays Parts of Fiduciary Rule About to Take Effect, Extends Enforcement Relief
"Notwithstanding this enforcement relief, as of June 9, 2017, participants can bring class action lawsuits against fiduciaries for breaches that occur on or after that date.... [It] appears that Field Assistance Bulletin 2017-03 remains in force. This means that during the transition period, while plan participants can sue to enforce their rights under ERISA, fiduciaries can require arbitration for settling claims."


Registration Open -- Orlando APC, Feb. 7-9, 2018

Sponsored by FIS Relius Education

Our ERISA experts will cover 403(b) restatement, anti-cutback rule, IRS disaster relief, QDROs, loan and hardship distribution, advanced plan design, RMDs, EPCRS , fiduciary regs update, and more. 19 CE hours. Early fee ends January 5. Register now.

ERISA Mediation Tips for Employers
"Letting the employee express their complaints can be one of the most important parts of mediation ... The mediator is not a fact-finder and is not there to determine questions of law. The mediator is a third-party who is there to facilitate a settlement ... Settling a weak ERISA claim is almost always less expensive than litigating.... Perhaps the greatest benefit of mediation is that it allows the parties to develop their own ultimate resolution."
Butterfield Schechter LLP

Every Good Fiduciary Should Know the Answer to These 401(k) Plan Questions
"[These] commonly asked questions ... open the door for teachable lessons.... [1] Should I invest into the 401k, and will I save on taxes? ... [2] How much guaranteed interest do 401k plans earn? ... [3] Once I make the contribution how quickly can I take the money out? ... [4] Do I have to notify my employees of the plan? ... [5] Can I force employees to meet one-on-one with financial advisers? "
Fiduciary News

A Balancing Act: Strategies for Financial Executives in Managing Pension Risk (PDF)
13 pages. "[This paper reviews] four levers that are fundamental drivers of pension costs and outcomes: asset returns, liability hedging, contribution policy, and benefit management. Balancing these levers is critical to enabling greater probability of success in managing pension risk ... [The authors] introduce a framework for chief financial officers and other financial executives to use in doing so."
Cambridge Associates

Retirement Plan Participants' Claim Survives Motion to Dismiss by American Airlines
"The participants have sufficiently pleaded claims to survive American's motion to have the case dismissed, Judge John McBryde of the U.S. District Court for the Northern District of Texas held Nov. 27 ... McBryde's decision comes one year after he rejected an $8.8 million proposed settlement that would have ended the dispute between the parties. In rejecting the proposed deal, McBryde said the amount may be 'inadequate' because workers may have lost out on as much as $88 million in expected returns over the past six years." [Ortiz v. American Airlines, Inc., No. 16-151 (N.D. Tex. Nov. 27, 2017)]
Bloomberg BNA


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2017 Top Management and Performance Challenges Facing the DOL (PDF)
17 pages. "For many years, EBSA's oversight efforts have been challenged by the fact that billions of dollars in pension assets held in otherwise regulated entities, such as banks, escaped audit scrutiny.... EBSA is further challenged by the large increase in the types and complexity of investment products available to pension plans.... EBSA also faces challenges in protecting participants because of limited information it receives from its main information gathering tool, the Form 5500 series."
Office of Inspector General [OIG], U.S. Department of Labor [DOL]

How Do 401(k) Participants Really React to Fee Levelization?
"According to a recent survey, 6 in 10 participants don't know what fees they pay or say (believe) their employer pays all of the fees. That's a red flag in and of itself ... It can also be a reason some plan sponsors implement fee levelization -- they believe fees become more transparent to participants. That's not necessarily true[.]"
The Principal Blog

Spending in Retirement ... or Not?
"Something unexpected has been the shared experience for our most recent generation of retirees. The vast majority haven't been spending their retirement savings -- leaving nest eggs mostly untouched and living on ready sources of income instead. However, future retirees may be less fortunate."


Are Hedge Funds or Private Equity Investments Appropriate for Public Pension Funds?
"[If] all these arrangements are private... how do we know the deals are aboveboard? ... Is it appropriate for pension funds which are supposed to guarantee very non-volatile pension benefits to get into such risky assets? ... If outside interested parties cannot tell the terms of the arrangement -- such as fees, etc. -- how do we know these arrangements are on the up-and-up?"


Pro-DOL Rule Forces Will Sharpen Knives Now That DOL Rule's 18-Month Delay Is Carved in Stone
"In what DOL rule proponents are saying is nothing less than willfully blind allegiance to yesteryear's guiding philosophy of helping investors by helping Wall Street, the [DOL] has delayed implementation of the new standards by 18 months. In doing so, the Washington, D.C. agency used everything but semaphore to signal to Wall Street that the enforcement of the rule will be ... relaxed."


American Academy of Actuaries Issue Brief: State-Based Retirement Initiatives (PDF)
"The availability of a state-based retirement program that would relieve employers of these responsibilities (at least for future employees and/or contributions) could lead some employers to stop offering their own plans. Given the limitations of the state-based programs ... this may not be a desirable result."
American Academy of Actuaries

Benefits in General

DOL Delays Implementation of Disability Claim Rules
"Many short-term disability arrangements are merely payroll practices where the employer continues the employee's normal salary for several weeks or months while the employee is disabled. The new rules won't apply to these arrangements but apply to arrangements where an insurer pays benefits....[N]onqualified deferred-compensation plans that pay benefits when a participant becomes disabled are subject to these new regulations if the determination of disability is made by an insurer or by the employer or plan sponsor."

Executive Compensation
and Nonqualified Plans

2017 Executive Benefit Survey Results (PDF)
16 pages. "The perceived effectiveness of [nonqualified deferred compensation plans (NQDCPs)] continues to climb higher each year, with 2017 survey responses maintaining that over 80% of plan sponsors believe that their NQDCPs were effective or extremely effective ... An average of 44% of responding companies offered a company match, ... Informal funding continues to be a popular strategy for addressing NQDCP benefit obligations[.]"

on the BenefitsLink Message Boards

How to Calculate RMD When Marital Status is Unknown?
DB plan does not allow distribution prior to NRA, nor does it allow for lump sums (don't ask me why; it's a convoluted individually designed document). Normal benefit is regular single life annuity, with 50% JS for married participants. Plan has several participants that need RMD but they can't be located, or in some instances they won't respond. Question: because the plan does not know the participant's marital status, how can it calculate the annuity and thus the RMD amount? The document is silent. The plan's actuary isn't willing to calculate any sort of RMD without knowing marital status and date of birth. The financial institution isn't willing to process any sort of RMD without participant consent. If it were a 401(k) plan and I didn't know the spouse's date of birth (or even that the participant had a spouse) I would just calculate and have the plan make a payment based solely on the participant's DOB. But the actuary doesn't want to calculate the RMD based on a single life annuity without actually knowing, so I'm a bit at a loss as to how to handle this.
BenefitsLink Message Boards

Is There a Meaningful Choice of '3(16)' Service Providers?
Some recordkeepers and third-party administrators offer to provide services for a 401(k) plan not merely as a contract service provider but also by expressly accepting responsibility as an appointed fiduciary for a specified set of plan-administrator (not investment manager) functions. Business jargon seems to use "3(16)" as a label for this kind of service. If a plan sponsor wants to engage this service, is there a meaningful choice of providers? Or is the number that offer this service so few that an employer faces little choice?
BenefitsLink Message Boards

Is Your TPA Firm Charging a 'Deconversion' Fee?
On a client who terminates and switches TPA, I am curious as to how many TPAs are charging a deconversion fee or a fee to send copies of prior documents to new TPA.
BenefitsLink Message Boards

Modify Term of Stock Option Award?
Can a stock option award be amended to extend the term AFTER the original expiration date? Set aside any ISO/NQSO and accounting issues for now, I'm just trying to determine if it can be done. Award agreement states that option expires upon the earlier of 10 years from the date of grant, or the expiration date shown on the grant notice. Grant notice shows a date about 3 months earlier than 10 years from date of grant (related to date vesting begins). Example: Grant date is 12/31/2017. Expiration date (as shown in grant notice) is 10/1/2017. Can this award be amended to extend the expiration date to 12/31/2017?
BenefitsLink Message Boards

Press Releases

ICI Names Susan M. Olson General Counsel
Investment Company Institute

Meridian Promotes Two Lead Consultants to Partner
Meridian Compensation Partners, LLC

PBGC to Pay Benefits for the Public Service Mutual Pension Plan
PBGC [Pension Benefit Guaranty Corporation]

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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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