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[Guidance Overview]

IRS Releases 2017 Required Amendments List for Qualified Retirement Plans
"[1] Cash balance/hybrid plans must be amended ... to comply with the market rate of return and other requirements in the final regulations that become applicable ... for the plan year beginning in 2017. [2] An eligible cooperative plan or eligible charity plan, not already subject to the benefit restrictions under Internal Revenue Code Section 436, generally becomes subject to the restrictions beginning with plan years on or after January 1, 2017....[3] Defined benefit plans that permit benefits to be paid partly in the form of an annuity and partly as a single sum (or other accelerated form) must do so in compliance with Code Section 417(e)."
Findley Davies | BPS&M


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[Guidance Overview]

IRS Offers Two Methods for Correction of Missed Plan Loan Payments
"According to the advice in the [CCM 201736022], if the plan loan payments are brought in line within the appropriate cure period, there is no violation of 72(p) requiring correction under EPCRS. However, if the correction prescribed in the memorandum is not made within the cure period, then EPCRS would be the next alternative."

[Guidance Overview]

DOL Fiduciary Rule: Still Very Much Alive
"[T]he final rule does not delay the expanded definition of a fiduciary ... This means that many service providers, including IRA advisors, are now subject to a fiduciary standard of conduct and must undertake good faith efforts to comply with the new Fiduciary Rule, including adherence to impartial conduct standards when rendering investment advice."
Trucker Huss

401(k) vs. 403(b) for Nonprofit Organizations
"401(k) plans are permitted to have eligibility rules and 403(b) plans, in general, are not. The 'Universal Availability' laws which permit 403(b) plans to avoid testing deferrals also requires all employees (with limited exceptions) to be eligible to make deferrals in a 403(b) plan. A Nonprofit with 150 employees, 60 of which routinely turn over within the first 12 months of employment, should consider a 401(k) plan."

Delinquent 401(k) and 403(b) Deposits: Same Prohibited Transaction, But Only One Is Subject to Penalties
"While late deferrals to an ERISA 403(b) plan do need to be reported on the Form 5500's Schedule H or Schedule I, Form 5330 cannot be filed because Section 4975 does NOT apply to ERISA 403(b) plans, and thus no penalty tax is due."
Belfint Lyons Shuman


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Denver FBI Uncovers Fraud Scheme Targeting 401(k) Accounts
"A scheme targeting individual 401(k) accounts, potentially at multiple recordkeepers, has resulted in a lawsuit by the U.S. Attorney's office in Colorado to recover as much as $2 million in losses. The lawsuit ... seeks to seize up to $342,335 in assets from five individuals who deposited funds from the alleged scheme in multiple banks, including JP Morgan Chase Bank, Bank of America, PNC Bank and Wells Fargo."
National Association of Plan Advisors [NAPA]

Trends in Participant Site Homepages
"[T]he retirement portfolio summary user experience has evolved and resulted in three key trends: [1] the rise in distinct homepages and account-specific dashboards, [2] increased dashboard or homepage retirement readiness content and the [3] integration of more personalized communication strategies."
Corporate Insight

State of the Insured Retirement Industry: 2017 Review and 2018 Outlook (PDF)
32 pages. "The past year has arguably been one of the most disruptive in the history of the retirement income industry.... This year's report will look at the demographic, market, legislative and regulatory developments that were significant in the past year, and which will work to shape the future, and offer possible trajectories for the industry in 2018 and beyond"
Insured Retirement Institute [IRI]

Public Pension Assets Quarterly Update (Q3 2017)
"As of the third quarter of 2017 (September 30), public pension assets were a record $4.16 trillion, an increase of approximately 2.5 percent, from $4.06 trillion as reported for the prior quarter and higher from the same quarter one year ago by some $330 billion, or 8.6 percent."
National Association of State Retirement Administrators [NASRA]

Corporate Pension Funded Status Improves by $7 Billion in November (PDF)
"Pension plan liabilities remained stagnant during November as the benchmark corporate bond interest rates used to value those liabilities remained flat. As of November 30, the funded ratio increased to 85.2%, up from 84.8% at the end of October. The funded status has improved by $41 billion since August 31, making the last three months the strongest performing period of 2017."


California State Retirement Plan Has Opportunity to Protect Employer-Sponsored Plans
"[ERIC urges] the Board not to impose additional reporting requirements on employers who already provide a retirement plan. Any additional reporting requirements will make it more complicated for employers to comply with both federal and state law, as well as divert valuable resources away from the plan[.]"
The ERISA Industry Committee [ERIC]


Pass-Through Income Tax Rates Could Undermine Incentives for Small Business Retirement Plans and Impact Millions of Non-Owner Employees (PDF)
"Unless the mismatch of tax rates on current pass-through income and deferred retirement savings is addressed, small business owners of pass-through entities will be financially penalized for saving in a retirement plan. The solution involves matching the tax rate on the deduction for allocable retirement plan contributions of the small business owner... with the tax rate the small business owner will pay when the money is withdrawn from the plan at retirement."
American Retirement Association

Benefits in General

Americans' Views on Employee Benefits: Results of National Poll
21 presentation slides. "Tax benefits for employer-sponsored retirement savings and health insurance coverage are highly important [to Americans]. They prefer compensation packages that emphasize more, higher-quality benefits over more take-home pay. Health and retirement benefits rank higher than vacation and leave. Working Americans trust employers most as a source for high-quality health care coverage."
American Benefits Council

Executive Compensation
and Nonqualified Plans

[Official Guidance]

Text of IRS Notice 2017-75: Guidance Under Section 409A for Pre-2009 Section 457A Deferrals (PDF)
"This notice provides guidance on the application of Internal Revenue Code section 409A with respect to amounts that are includible in income pursuant to section 801(d)(2) of the Tax Extenders and Alternative Minimum Tax Relief Act of 2008 ... Section 801(a) of TEAMTRA added section 457A to the Code. Section 457A generally applies to deferred amounts that are attributable to services performed after December 31, 2008. However, if section 457A does not apply to a deferred amount solely because the amount is attributable to services performed before 2009, section 801(d)(2) of TEAMTRA provides that the amount is includible in gross income in the later of the last taxable year beginning before 2018 or the taxable year of vesting. This guidance provides that a nonqualified deferred compensation plan that is subject to the provisions of Code section 409A will not fail to meet the requirements of section 409A solely because payments of deferred amounts under the plan are accelerated to pay income taxes on the amounts includible in income pursuant to section 801(d)(2) of TEAMTRA."
Internal Revenue Service [IRS]

Tax Reform Includes Major Changes to Executive Comp for Both Tax-Exempts and Public Companies
"Both the House Bill and the Senate Bill would: [1] Repeal the exception for performance-based compensation (thus effectively imposing a 'hard' tax-deductible compensation limit of $1 million for covered employees), [2] Expand the group of covered employees to include a company's chief financial officer, [3] Provide that the limitation will continue to apply even after the individual ceases to be a covered employee, and [4] Expand Code Section 162(m) to cover additional corporations not previously covered."
Jackson Lewis P.C.

on the BenefitsLink Message Boards

Given the Cost of Filing a Form 5310, How Many Still File It?
We have a client with a one-person plan that just got through a VCP filing (due to loans that didn't meet the dollar amount and repayment requirements). We're going to terminate the plan. I believe a Form 5310 should be filed in order to protect the rollover of what's left. The steep $2,300 filing fee is a deterrent, though.Plan document seems to be up to date. I suppose there could be other problems. What are others doing?
BenefitsLink Message Boards

Benefits/Rights/Features Testing Needed After Vesting Schedule Amendment?
We have a 401(a) DC plan that changed the vesting schedule from 100% immediate to a graded schedule only for employees hired on or after 2/1/2014. The 100% immediate schedule continues to apply for those hired prior to 2/1/2014. Is BRF testing is necessary?
BenefitsLink Message Boards

How to Report a 60-Day Rollover on Form 1040?
I cannot find a simple straightforward explanation of how someone reports a 60 day rollover on their 1040. I know it has something to do with 16a and 16b, but is there another form? Do they simply enter $15,000 on 16a (assuming that is the gross amount of the distribution) and $0 on 16b? Is it just that easy?
BenefitsLink Message Boards

Should Plan Sponsor Respond to EBSA Letter About Late Deposits?
A few of the plans I'm servicing have received a letter from EBSA notifying them of the VFCP corrections process because the plans reported late deposits on their Forms 5500. The plans caught the error early and made the lost earnings deposits (i.e., they attempted to self-correct). Do other TPAs typically respond to this letter? I called EBSA, and was told the letter's intent is to notify the plan only, and that the plans need not respond unless they decide to use VFCP.
BenefitsLink Message Boards

Can I Set Up an Anonymous Account on the Message Boards?
If you have an existing account on the Message Boards (i.e., you've registered), you have a user name that appears next to any message you post. Your user name might be your real name (which generally is a very good idea for reputation and hence marketing purposes). But you also might want to set up a second account on the Message Boards so that you can post a message (i.e., start a topic or post a reply to an existing topic) without revealing any information about yourself. Think of a second account as an "anonymous" account. [For helpful instructions, please click on the title above.]
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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