Retirement Plans Newsletter

February 26, 2018

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Defined Contribution Account Manager
Qualified Plan Administrators Inc
in GA

Senior Pension Administrator III
Lafayette Life Insurance Group
in OH

Account Executive
Fringe Benefit Group
in TX

Counsel - Retirement Plans
Nationwide
in OH

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[Guidance Overview]

California Wildfires: Congress Grants Expanded Access to Retirement Savings
"There are three main types of expanded access: Special withdrawal rules ... Retirement plan loan relief ... Repayment of amounts taken out to buy or build a home in the disaster area."
E is for ERISA

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Changes to VCP User Fees: A Holiday Gift That Some Plan Sponsors Would Rather Return
"An IRS official indicated that user fees were changed due to a prior ruling confirming that such fees are 'user' fees versus 'compliance' fees. The IRS has interpreted this to mean that, by statute, such fees must closely align to the IRS costs for processing a VCP filing.... The official confirmed, however, that the IRS remains open to feedback on the structure (in particular, ideas for the way the fees can be adjusted to help small plans while still meeting statutory requirements) and is willing to taking a second look."
Jackson Lewis P.C.

Notice to Financial Advisers: State Regulators Are Enforcing the DOL Fiduciary Rule
"The Complaint alleges that, although Scottrade added new policies to comply with the impartial conduct standards, Scottrade expanded the scale and scope of the sales practices that the new policies were designed to curtail.... The Complaint [further alleges] that Scottrade 'failed to take any meaningful steps to remove retirement assets from the scope of the contests or ensure compliance with the Fiduciary Rule.' "
Financial Services Employment Law, Epstein Becker Green

SEC Chairman Jay Clayton Outlines Goals for a New Fiduciary Standard
"Mr. Clayton did not offer any details on what an SEC fiduciary rule might look like. He did reiterate that he wants an advice regulation to clarify for investors what standard of care they receive from investment advisers and brokers."
Pensions & Investments

Evolution of Retirement Plans in Fortune 500 Companies
"The shift away from traditional defined benefit (DB) to account balance plans gives today's increasingly mobile workforce more choices, flexibility and transparency, and helps employers manage the ongoing costs and risks/opportunities of providing retirement benefits. Companies have made the transition to account-based plans in a variety of ways."
Willis Towers Watson

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Tax Reform, Pass-Throughs and Retirement: What's It All Mean?
"While the 20% deduction is generally a good thing for the small businesses that qualify, a presumably unintended consequence is that it provides these business owners with less incentive to shelter income in vehicles such as qualified retirement plans."
Cammack Retirement Group

Proposed Retirement Plan Simplification and Enhancement Act of 2017
"It would make a number of improvements to current rules, fixing some technical issues ... but also making some important substantive changes.... [1] Changes to the 401(k) automatic enrollment/automatic escalation rules ... [2] Secure Deferral Arrangement 401(k) safe harbor ... [3] Small employer credit for matching contributions ... [4] Other automatic enrollment-related changes ... [5] Require coverage of 'long-term part-time employees' ... [6] Changes to Required Minimum Distribution rules ... [7] Clarification of the treatment of economically targeted investments."
October Three Consulting

Power to the ESOP: Tax Savings Benefits for Employers and Employees
"Companies considering ESOP ownership, partial ESOP ownership in 2018, or even existing ESOPs may want to compare the costs and benefits of electing to be treated as a C corp or S corp. The new lower C corp taxes may have some S corps reconsidering their entity choices."
Butterfield Schechter LLP

[Opinion]

American Benefits Council Letter to EBSA on ERISA Preemption of State Fiduciary Rules
"State fiduciary rules, like the one enacted in Nevada, are clearly preempted by ERISA.... ERISA defines who is a fiduciary, details that standard of care, and creates its own enforcement mechanisms through DOL, the IRS, and federal courts. States cannot add any new or additional requirements to that comprehensive system if their regulation 'relates to' an employee benefit plan."
American Benefits Council

Executive Compensation
and Nonqualified Plans

A New Year, A New Stock Plan (PDF)
"The items listed [in this article] reflect recent changes in applicable corporate governance, securities, tax, and accounting rules.... [It] is usually preferable to seek shareholder approval for a new plan that covers the entire spectrum of desired improvements, globalization of the workforce, e-delivery innovations, and governance practices responsive to the concerns of shareholders and the standards enunciated by proxy advisory firms such as ISS and Glass Lewis."
The Wagner Law Group, via Bloomberg BNA Pension & Benefits Daily

CEO Pay Ratios in Context (PDF)
"The CEO Pay Ratios contained in this Client Briefing were calculated using the BLS median annual compensation for a U.S. worker of $43,992 for 2016. As a result, the ratios may not reflect the ratios that will be disclosed in 2018 proxy statements for [1] companies with median employee annual total compensation significantly above or below the BLS amount, and [2] companies with a large global employee workforce such that their median employee is not based in the U.S."
ExeQuity

Selected Discussions
on the BenefitsLink Message Boards

Prior Recordkeeper Not Providing Data for Old QDROs
Our Retirement Plan transitioned recordkeepers at the beginning of 2016. From time to time we will get QDROs in that require data and/or earnings calculations from prior to 2016 and we'll have to request that from the prior recordkeeper. It's taking upwards of 6 months to get anything out of them. Do we have any recourse?
BenefitsLink Message Boards

11(g) Amendment to Integrate at 20% of Taxable Wage Base?
Can we do an 11(g) amendment to change profit sharing allocation method from each in own group, to an integrated allocation with the allocation at 20% of the taxable wage base?
BenefitsLink Message Boards

New Disability Regs; Can Amendments Be Avoided by Adopting an Administrative Policy?
Suppose a pre-approved Plan document currently says that the determination will be made by a licensed physician. It doesn't specify who chooses the licensed physician. If the Plan Administrator institutes a written policy that the determination of Total and Permanent Disability is made by a licensed physician CHOSEN BY THE PARTICIPANT (and also accepts a SSA determination or under the employer's LTD program) is this sufficient to remove discretion, so that an amendment isn't even necessary?
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Lois Baker, J.D., President  loisbaker@benefitslink.com
David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
Holly Horton, Business Manager  hollyhorton@benefitslink.com

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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