Retirement Plans Newsletter

January 22, 2018

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Jobs

ESOP Administrator
Blue Ridge ESOP Associates
in VA, Telecommute

Senior Defined Contribution (DC) Analyst
Retirement Horizons, Inc.
in TX

DC Plan Administrator
The Benefit Advantage, Inc.
in MI, Telecommute

Business Relationship Consultant
Aspire Financial Services LLC
in FL

►See 103 Jobs

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Webcasts, Conferences

Incentive Compensation Planning and Tax Reform: ERISA Compliance, Section 409A, Section 162(m) Limitations, Tax Challenges and Planning Methods
February 28, 2018 WEBCAST
Strafford

How to Avoid or Mitigate Fiduciary Risk
March 7, 2018 WEBCAST
ASPPA [American Society of Pension Professionals & Actuaries]

Recent Developments in 401(k) Fee Disclosure Rules
March 28, 2018 WEBCAST
Lorman Education Services

International Employees and Employers: Retirement Plan Issues
April 26, 2018 WEBCAST
ASPPA [American Society of Pension Professionals & Actuaries]

►See 137 Upcoming Webcasts and Conferences

►See 1371 Recorded Webcasts


Discussions

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New Comments and Topics

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[Official Guidance]

Text of PLR 201803006: OK to Amend Interest Rate Lookback Month for Cash Balance Plan's Pre-Conversion Benefit (PDF)
"This letter is ... a ruling on the effect of an amendment changing the interest rate lookback month with respect to preconversion benefits under section 411(b)(5) ... and the regulations thereunder, following the conversion of a defined benefit pension plan ... to a cash balance plan that is intended to be a statutory hybrid plan under section 411(a)(13).... [P]resent value determinations [prior to conversion] were based on interest rates for the lookback month that is the first full calendar month preceding the Plan Year in which the annuity starting date occurs.... [Under the plan amendment, for any distribution having an annuity starting date after the year in which the conversion occurred,] the Look-back Month [became] the month of September in the Plan Year preceding the Plan Year in which the annuity starting date occurs."
Internal Revenue Service [IRS]

[Advert.]

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Sponsored by Pensions & Investments

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[Guidance Overview]

Hunting for Retirement Plan Participants? New IRS Guidance and the Expanded PBGC Missing Participants Program Should Help
"Plan administrators need to be both proactive and creative in their attempts to locate missing or non-responsive participants or beneficiaries. This may include searching social media sites, as well as contacting former employees who worked with the participant.... [T]he steps taken to locate a missing participant or beneficiary must be documented and saved ... [If] a plan administrator is interested in applying to the newly available PBGC program, this evidence will be necessary to satisfy a plan's eligibility requirements to participate in the program."
Fox Rothschild LLP

How PBGC Will Operate During the Government Shutdown
"PBGC will remain open for business and benefit payments will continue to be made on time. PBGC stays open because we're not funded by taxpayer dollars. Instead, we're funded by insurance premiums, investment income, and assets and recoveries from terminated plans."
Pension Benefit Guaranty Corporation [PBGC]

Privacy Risks Beyond HIPAA: Retirement and Other Non-Health Benefit Plans (PDF)
28 pages. "The day will come when a retirement plan fiduciary is held liable for a security or privacy breach.... [F]iduciaries of retirement and other non-health plans should begin now to bolster their processes for protecting participants' private information in the possession of plans, plan vendors, and the fiduciaries themselves.... [O]ne can imagine a day when courts will require fiduciaries to take carefully considered steps to reduce the risk of private information that can be used to identify participants being accessed by unauthorized parties or otherwise being misused."
Utz & Lattan, LLC

Changes to Personal Casualty Loss Deduction Could Affect 401(k) Hardship Withdrawals
"[B]ased on the language in the statute and existing regulations, it would appear that qualified hardship withdrawals to repair a severely damaged principal residence are effectively eliminated unless in a federally declared disaster area, pending any future guidance."
National Association of Plan Advisors [NAPA]

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Pending Legislation Could Significantly Change the Retirement Plan Landscape
"[A] number of bills have been introduced in recent weeks that, in addition to simplifying some of the rules, could encourage employers to set up plans and help increase employees' retirement savings. Many of these changes have been proposed in the past and enjoy bipartisan support.... The Automatic Retirement Plan Act (H.R. 4523) ... The Small Business Add Value for Employees (SAVE) Act (H.R. 4637) ... The Retirement Plan Simplification and Enhancement Act (H.R. 4524) ... The Receiving Electronic Statements to Improve Retiree Earnings Act (H.R. 4610)."
J.P. Morgan Asset Management

Survey Says: Least/Most Effective Retirement Industry Developments in the Last 25 Years
"The No. 1 pick for developments in the retirement industry respondents think has been the most effective for improving retirement outcomes is the adoption of automatic enrollment for defined contribution (DC) plans (48.9%).... [The least effective was the] increase in move from defined benefit (DB) plans to DC plans (45.6%), followed by increase in pension transfers to insurance companies (17.4%) and increased focus on retirement income options by regulators (10.9%)."
PLANSPONSOR

401(k) ERISA Plan Compliance Calendar, 2018
"[This] Calendar highlights the critical compliance deadlines for ERISA 401k(k) defined contribution retirement plans.... [T]here may be additional deadlines for specific plans that are not covered here. Plans with non-calendar plan years may be subject to different deadlines."
Cammack Retirement Group

403(b) Plan Compliance Calendar, 2018
"The 2018 Retirement Plan Compliance Calendar highlights critical compliance deadlines ... [T]here may be additional deadlines for specific plans that are not covered here. Plans with non-calendar plan years may be subject to different deadlines."
Cammack Retirement Group

[Advert.]

Retirement Savings Plans and Tax Reform: How Will It Affect You?

Sponsored by Lorman and BenefitsLink

Feb. 12 webinar. Gain a solid understanding of how the tax reform will affect retirement plans for your company. BenefitsLink discount.


Supreme Court Will Hear Railroad Retirement Tax Act Issue
"[The] narrow, technical question that the Supreme Court will address ... is whether stock received upon the exercise of stock options that railroads award to their employees as part of their compensation package is taxable compensation under the RRTA.... The circuits ... are split on whether income from stock options is covered by the term money remuneration, making it taxable under the RRTA." [Wisconsin Central Ltd. v. U.S., No. 17-530 (7th Cir May 8, 2017; cert. pet. granted Jan. 12, 2018)
Squire Patton Boggs

Church Plan Challenges Lead Uptick in ERISA Class Action Settlements in 2017
"Class-action lawsuit settlements reached a record $2.7 billion in 2017, with $927.8 million coming from the 10 largest ERISA cases ... a sharp increase from $807.4 million in 2016, but lower than $1.31 billion in 2015 ... The largest ERISA settlement was Providence Health & Services, which paid $352 million to settle a church-plan challenge. Six of the 10 largest settlements in 2017 were related to church-plan challenges."
Pensions & Investments

Unbundled Plans Gained Significant Ground in 2017
"Today, just 8.8% of 'mega plans' with assets greater than $1 billion utilize a fully bundled structure.... [N]early two thirds (62.5%) of mid-sized plans with asset levels between $100 million and $500 million report using a partially bundled structure, while approximately a fifth indicating they currently utilize a fully bundled structure (21.9%)."
PLANSPONSOR

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

2018 Deadlines Approach to Furnish ISO and ESPP Information Statements and Returns
"[A] corporation [must] furnish a written statement to any employee or former employee who either [1] exercised an incentive stock option (ISO) ... during 2017 or [2] during 2017 first transferred legal title to shares acquired under the corporation's employee stock purchase plan (ESPP).... The corporation must furnish these statements on Forms 3921 and 3922 no later than January 31, 2018.... [C]orporations [also] must file returns with the [IRS] on Forms 3921 and 3922 no later than February 28, 2018, if filed on paper, or April 2, 2018, if filed electronically."
DLA Piper

Selected Discussions
on the BenefitsLink Message Boards

1099-R for Mandatory Contributions Being Distributed from a Municipal Pension Plan
We have a municipal pension plan that requires employees to make mandatory pre-tax contributions to the Plan. If a participant terminates prior to vesting, the mandatory contributions are paid out in the year of separation. I was told the "prior person" said the code on the 1099-R should always be 7 (normal) or 2 (exception), but no explanation was given. In reading the Form 1099-R instructions Code 2 does not seem to apply to this distribution, although intuitively it seems to, i.e., the participant was enrolled automatically (mandatory contribution) and now is forced to take the withdrawal. But Code section 414(w)(1)(B) seems to address only section 401(k) plans with automatic enrollment. Thoughts?
BenefitsLink Message Boards

3% Non-Elective Safe Harbor Contributions Effective Before Deferrals; Allowed?
Plan effective 1/1/18 with profit sharing provisions. Elective deferrals are added effective 3/1/18, but plan sponsor wants to offer the 3% employer non-elective safe harbor contribution effective 1/1/18 (i.e., for the whole plan year even though deferrals are only allowed for 10 months). Legal?
BenefitsLink Message Boards

Discrimination Testing in Year That a Company Becomes Commonly Controlled
Can someone please help me find guidance that allows an employer to not combine two related companies into a Controlled Group for the purposes of discrimination testing in the year of acquisition, and perhaps even the year following acquisition?
BenefitsLink Message Boards

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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2018 BenefitsLink.com, 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 BenefitsLink.com, 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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