Retirement Plans Newsletter

January 10, 2018 logo logo
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Retirement Plan Consultant
Intac Actuarial Services
in NJ, NY

Senior Pension Administrator
Scholz & Friends Enlightened Retirement Group, Inc.
in TX

Fund Accountant
LT Trust
in CO

Enrolled Actuary
TPS Group / The Pension Service
in CT, Telecommute

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Webcasts, Conferences

Innovation, Disruption and the Experience Economy - Are You Ready For It?
January 18, 2018 in GA
Worldwide Employee Benefits Network [WEB] - Atlanta Chapter

Employee Benefits and Executive Comp Reps, Warranties and Indemnification in M&A Deals
February 13, 2018 WEBCAST

Safe Harbor Midyear Amendments: You Can Do It! [2018]
February 20, 2018 WEBCAST
FIS Relius Education

Prohibited Transactions
February 22, 2018 WEBCAST
FIS Relius Education

What’s Love (or Ethics) Got to Do With It?
March 1, 2018 WEBCAST
ASPPA [American Society of Pension Professionals & Actuaries]

2018 Fi360 Conference
April 25, 2018 in CA

►See 129 Upcoming Webcasts and Conferences

►See 1377 Recorded Webcasts


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[Official Guidance]

PBGC Now Accepting 2018 Premium Filings
"My PAA is now ready to accept electronic premium filings for plan years beginning in 2018. In addition, if you have the plan in your My PAA account... you can submit an online Request for Reconsideration (of penalty) or a Request for a Premium Refund (by the PA/PA Rep). For additional information, see the following pages [on the PBGC website]: [1] Premium Filing Instructions & Addresses, [2] What's New in My PAA (January 2018) & Ongoing Reminders, [3] My PAA Online Demonstrations, and [4] the Online Premium Filing with My PAA page (for FAQs, My PAA User's Manual, etc.)."
Pension Benefit Guaranty Corporation [PBGC]

[Advert.] – Outstanding Content -- Affordable Pricing

Sponsored by Burrmont Compliance Labs LLC Find out why we are the fastest-growing ERISA Compliance Service in the industry. Outstanding authors, customer satisfaction & support. Contact us to see what we can do for you. or 612-605-2266.

[Guidance Overview]

2018 Changes in IRS VCP User Fees: Winners and Losers
"It is easier to find losers than winners: [1] Small plans covering fewer than 101 participants paid $500 or $750 under the 2017 schedule and will now pay at least $1,500, or $3,000 if the plan assets are over $500,000, under the 2018 schedule. [2] Plans with minimum required distribution failures for 300 or fewer participants will pay at least twice as much as last year.... [3] Bargain user fees of $375, $500, or half the old generally applicable fee for nonamender submissions are a thing of the past."

[Guidance Overview]

Interesting Angles on the DOL's Fiduciary Rule, Part 76
"BICE only applies to non-discretionary investment advice.... [If] the financial institution or its advisors have the responsibility or authority to make the decisions, or if they actually make the investment or transaction decisions, and there is a financial conflict of interest (that is, a prohibited transaction), BICE does not provide relief.... [Many RIAs] are not aware that, where they have financial conflicts (for example, 12b-1 fees or payments from custodians) for discretionary investment management for IRAs, there is usually not an exemption and the compensation is prohibited."

How to Decide If the Outsourced Model Is Right for Your Plan (PDF)
"A discretionary manager should have the governance structure and processes in place to quickly and effectively capitalize on investment ideas.... In selecting an outsourced provider, asset owners have several factors to consider and no shortage of potential candidates. While a number of these factors are similar to those in selecting a traditional advisor, a discretionary relationship introduces a few unique considerations."
Segal Marco Advisors

Developing Investment Policy and Structure: Balancing Diversity and Simplicity (PDF)
"[K]ey considerations for your investment policy and selection: [1] Participant investment knowledge and sophistication; [2] Fit with overall investment menu; [3] Risk/return tradeoff; [4] Manager track record and consistency."


Comprehensive answers to your retirement plan questions.

Sponsored by Wolters Kluwer

Our TAG experts have on average over 25 years of experience so you get your questions answered -- quickly. With TAG you also get access to a fully searchable database of over 4000 FAQs, quick reference tools and charts, and daily news. Learn more.

Bill Would Provide New Safe Harbor for Annuity Provider Selection
"H.R. 4604, the Increasing Access to a Secure Retirement Act of 2017 ... clarifies and strengthens existing rules to make it easier for retirement plan sponsors to provide guaranteed lifetime income products as part of their employee benefits. It intends to amend [ERISA] and lays out specific criteria for selecting an annuity benefit provider."

Planning for Retirement: A Generational Perspective
"[T]he percentage of working-age households at risk of being unable to maintain their standard of living in retirement has improved -- from 52 percent to 50 percent -- mostly attributable to the last three years of strong stock market growth and rising home prices. When looking at the [National Retirement Risk Index] over the last thirty years however, the numbers show that achieving a secure retirement becomes more of a challenge with each generation."

Are Profit Sharing Contributions Right for Your 401(k) Plan?
"Because profit sharing contributions are flexible, they can be a great choice if your company is a start-up, has erratic profitability, or acquires other companies frequently. If your company is more stable, these contributions can help you meet several 401(k) plan goals, including: [1] Increasing the contributions made to 401(k) participant accounts up to the legal limit ... [2] Giving low-earners a base retirement benefit. [3] Attracting top employee talent with a generous retirement benefit."
Employee Fiduciary

Frequently Asked Questions About 401(k) Plans: The Basics
"What is a 401(k) plan and how does it work? ... Are 403(b) and 457 plans similar to 401(k) plans? ... What are the benefits of investing in a 401(k) plan? What is an employer match? What is vesting? Is there a limit to how much an employee and employer can contribute to a 401(k) plan? What is a catch-up contribution and who is eligible? What happens if an employee or employer contributes more than the 401(k) plan limit? Can participants borrow from their 401(k) plan accounts? ... What happens if an employee can't repay a 401(k) loan? What are the disadvantages to a 401(k) loan? What are hardship withdrawals? What are the disadvantages of a hardship withdrawal? When can a participant begin drawing down a 401(k) plan? ... Why do required minimum distributions exist?"
Investment Company Institute [ICI]

The Effect of Recent Tax Law Changes on Transfers from IRAs to Charity
"Now that TCJA has substantially increased the standard deduction and has substantially slashed other individual taxpayer deductions, QCD's can be a much more beneficial means of making charitable gifts for the over age 70-1/2 taxpayer.... Generally, direct transfers from the older donor's IRA to the older donor's favorite public charities will be beneficial if the older donor has low or no mortgage interest and does not have medical expenses that substantially exceed the AGI threshold."
Bryan Cave

IRA Balances, Contributions, Withdrawals, and Asset Allocation Longitudinal Results 2010-2015 (PDF)
32 pages. "While the cross-sectional overall average balance increased 36.1 percent from 2010 to 2015, the increase for those IRA owners who continuously owned IRAs from 2010-2015 was 47.1 percent.... Roth IRA owners ages 25-29 were the most likely to contribute in any year at 64.1 percent, and Roth IRA owners ages 30-34 were most likely to contribute in all six years at 15.0 percent ... The overall average contribution increased each year through 2013 before a slight decline in 2014 and a small increase in 2015."
Employee Benefit Research Institute [EBRI]


Joint Statement Opposing 'Composite' Pension Legislation
"The composite legislative proposal does not ensure that earned pensions will be fully paid in either existing multiemployer pension plans or in newly created plans. The composite proposals put benefits at risk, even in those multiemployer plans that are well-funded today.... [M]oney that would be needed for the new composite plans will be taken from money needed to fund existing plans -- likely leading to underfunding of both plans -- without adequate benefit protections."
AARP; Int'l Ass'n of Machinists and Aerospace Workers; Int'l Brotherhood of Boilermakers; Musicians for Pension Security; Nat'l United Comm. to Protect Pensions; Nat'l Retirees Legislative Network; Pension Rights Center; Others

Benefits in General

IRS Asking for Taxpayer Representatives' Personal Information
"Taxpayer representatives are now being asked for their Social Security number and date of birth, in addition to their Centralized Authorization File (CAF) number, so that IRS agents can verify their identity when they call the IRS. The new questions result from an updated version of Internal Revenue Manual (IRM) Section, which took effect Jan. 3.... Although the new IRM section is not yet available on the IRS's website, its existence has been verified by IRS personnel. The IRS says it plans to communicate the changes to practitioners in the near future."
Journal of Accountancy

Employees Want Financial Education About More Than Retirement Savings
"[E]mployees across the board say education on a variety of financial matters is needed, rather than just the limited amount of topics typically offered from employers. Some of these issues included how to obtain life insurance, with 81% of employees voting for more education compared to 68% of employers; and how to obtain disability insurance (84% of workers along with 71% of plan sponsors)."

National Taxpayer Advocate Releases Annual Report to Congress, Discusses Tax Reform Implementation, Unveils 'Purple Book'
"In Volume 1 of this year's report, we have identified 21 Most Serious Problems, made 11 Legislative Recommendations, and discussed the 10 Most Litigated Issues, along with significant stand-alone decisions. Volume 2 includes seven research studies and two Literature Reviews.... The Purple Book is a compendium of 50 legislative recommendations for strengthening taxpayer rights and improving tax administration that we and others have made over the years."
Taxpayer Advocate Service, Internal Revenue Service [IRS]

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

New 'Excess' Compensation Excise Tax for Tax Exempt Organizations
"[T]he excise tax only applies if the covered employee's total severance payments equal or exceed three times the employee's 'base amount.' ... For this purpose, the 'base amount' is the employee's average annual taxable compensation for the five years preceding his or her termination date ... [T]he excess severance payment excise tax can apply even if the individual's compensation for the year is less than $1 million."
Hunton & Williams LLP

Selected Discussions
on the BenefitsLink Message Boards

Defer Loan Repayment Starting Date for a Few Months?
Let's say loan is granted on January 15. But the (equal) payroll deduction repayments are not scheduled to begin until March 15. The repayment schedule would be 4 years (well under the 5 year limit). To me, this violates the "substantially level payments made at least quarterly" requirement of 72(p)(2)(C). During quarter 1 of the loan, the repayment is far less than during subsequent quarters. Agree?
BenefitsLink Message Boards

Earned Income from Separate Affiliates in Controlled Group
Plan document defines Earned Income as "net earnings from self-employment with respect to which the Plan is established, for which personal services of the individual are a material income producing factor." Plan is sponsored by ABC, LLC. Owner O owns 100% of ABC. O also owns 100% of XYZ, LLC. XYZ has no employees. O has net earnings from self-employment from XYZ that he would like to use to support his compensation in the plan. My question: Must XYZ adopt the plan as a participating employer in order for O to rely on the NESE from XYZ? Can't hurt, so why not?
BenefitsLink Message Boards

Using Form 2848; IRS Representative Wants Practitioner's Social Security Number
On a call with an IRS representative today, after I faxed over Form 2848, the representative asked me for my personal SSN in addition to my CAF number and my client's EIN. When I expressed surprise, she indicated that it was a very new IRS procedure. Has this happened to anybody else?
BenefitsLink Message Boards

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Press Releases

NAPA Unveils the Top Retirement Plan Advisors Under 40
National Association of Plan Advisors [NAPA]

Connect   LinkedIn logo   Twitter logo   Facebook logo, Inc.
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David Rhett Baker, J.D., Editor and Publisher
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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2018, 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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