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[Official Guidance]
Text of 2017 IRS Publication 721: Tax Guide to U.S. Civil Service Retirement Benefits (PDF)
33 pages, Jan. 25, 2018. "This publication explains how the federal income tax rules apply to civil service retirement benefits received by retired federal employees (including those disabled) or their survivors. These benefits are paid primarily under the Civil Service Retirement System (CSRS) or the Federal Employees' Retirement System (FERS)."
Internal Revenue Service [IRS]
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[Guidance Overview]
PBGC Missing Participant Program: It's Not Just for Defined Benefit Plans Anymore
"[E]ven though an uncashed check was originally reported as taxable and had the 20% withholding taken at the time the check was cut, the amount paid to the PBGC for this distributee must reflect the original value of the benefit.... The preamble to the regulations reflects that the plan administrator may be able to request a refund of the tax withholding ... Because of the statute of limitations on refunds, it will often not be possible to claim a refund for all of the withheld taxes."
Vorys
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Court Sets Method for Determining Damages Due to Breach of Loyalty in Fund-Mapping Case
"In its third look at damages, the trial court ... [concluded] that the proper method of calculating damages for the fiduciaries' breach of loyalty is to compare the performance of the replaced fund with the performance of the new funds. The court rejected the employee's request to treat the divestiture of the original fund and mapping of the proceeds into the new funds as different acts that require separate damage calculations, because the breach involved both.... Here, the court suggested, the damages should restore the plan to the position it would have occupied but for the disloyal decision." [Tussey v. ABB, No. 06-4305 (W.D. Mo. Dec. 12, 2017)]
Thomson Reuters / EBIA
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Text of District Court Order Dismissing Participant's Excessive Fee Claim Against Capital Group (PDF)
"It may not be necessary for Plaintiff to allege that the challenged funds underperformed, but Plaintiff must at least allege facts that plausibly suggest the fees were unjustified. That Defendants 'could' have chosen funds with lower fees, that 'similar' Vanguard funds charged lower fees, and that all or most of the challenged funds were Defendants' own financial products are insufficient, when viewed in context, to create a plausible inference of wrongdoing." [Patterson v. Capital Group Companies, Inc., No. 17-4399 (C.D. Cal. Jan. 24, 18)]
U.S. District Court for the Central District of California
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Hardship Withdrawals for Personal Casualty Losses Under the Tax Cuts and Jobs Act (PDF)
"[B]efore approving a hardship withdrawal request for repair to damage of the participant's principal residence it is important to make sure that the 'immediate and heavy financial need ' has been caused by an event that meets the revised definition of 'disaster' under Internal Revenue Code Section 165. To meet this new requirement the event must be the result of a federally declared disaster."
VOYA Financial
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Small Business Owners Not Confident About Retirement
"Sixty-nine percent of small business owners have zero to little confidence they will be able to retire comfortably ... Only 20% said they were very confident they will have enough money to retire comfortably."
planadviser
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Biggest 401(k) Changes of This Decade
"Effects of the [DOL's] fiduciary rule ... Shifting lawsuit environment ... Required fee disclosures ... Increase in plan audits ... Revenue sharing phase out."
Forbes
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With Sustainable Investing Pledge, Voya Joins Industry ESG Debate
"While some voices have emerged in the last several months arguing that the use of ESG investing programs has growth too political in the U.S.... leaders at Voya say this move is coming at the behest of clients and is simply the right thing to do, financially and otherwise.... Practically speaking, it is of course still unclear whether and to what degree signing the pledge will result in a change in Voya's investing approach."
PLANSPONSOR
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Oregonians Start Saving with Auto-Enroll Retirement Plan
"OregonSaves, the first state retirement savings program for private-sector employees to go into effect, had about 300 employers registered with the system and 19,230 employees with active accounts as of Jan. 24 ... The plan took effect in October and is paving the way for similar plans in other states."
Bloomberg BNA
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Benefits in General
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[Guidance Overview]
New Disability Claims Procedure Rules Take Effect April 1 (PDF)
"The Final Rule is very likely to increase the administrative costs and burdens of administering disability benefits under ERISA plans and is likely to make it easier for claimants to pursue their claims in court. Key changes to the procedures that ERISA plans must use to process disability claims include: ... [1] Disclosure of the basis for disagreeing with a third party.... [2] Right to review and respond to new information before final decision.... [3] Strict compliance and possible de novo review."
Groom Law Group
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Tax Law Fueling Changes to Employer Benefits, Compensation Programs
"Two-thirds of those (66%) surveyed are planning or considering making changes to their benefit programs or have already taken action. The most common changes ... include expanding personal financial planning (34%), increasing 401(k) contributions (26%) and increasing or accelerating pension plan contributions (19%)."
Willis Towers Watson
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Executive Compensation
and Nonqualified Plans
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[Guidance Overview]
Annual Reporting Requirements for Incentive Stock Options and Employee Stock Purchase Plans
"[A] separate Form 3921 or Form 3922 [must] be filed with the IRS for each transaction ... even if one participant has multiple transactions during the year. If a company provides participants with an information statement that meets the substitute statement requirements, ... the company may aggregate transactions and provide only one substitute statement to each participant who had multiple transactions during the year."
Orrick
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BenefitsLink.com, Inc.
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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 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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