Retirement Plans Newsletter

March 12, 2018 logo logo
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Health and Group Benefits Lawyer
Willis Towers Watson
in Toronto, Ontario

Qualified Retirement Plan Investment Advisor
Nadler Financial Group, Inc.
in IL

Retirement Plan Services Senior Associate
Dixon Hughes Goodman
in VA

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Webcasts, Conferences

Fixing Broken Retirement Plans
March 21, 2018 in MA
ASPPA Benefits Council [ABC] of New England

Employee Benefit Plan Conference
May 21, 2018 in MA
Massachusetts Society of CPAs

►See 179 Upcoming Webcasts and Conferences

►See 1372 Recorded Webcasts


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[Official Guidance]

Text of IRS EP Examination Memo TE/GE-04-0218-0011: Missing Participants and Beneficiaries and Required Minimum Distributions -- 403(b) Plans (PDF)
"For purposes of IRC Section 403(b)(10), EP examiners shall not challenge a 403(b) contract for violation of the RMD standards for the failure to commence or make a distribution to a participant or beneficiary to whom a payment is due, if the plan has taken the following steps: [1] searched plan and related plan, sponsor, and publicly-available records or directories for alternative contact information; [2] used any of [three listed] search methods ... and [3] attempted contact via [USPS] certified mail to the last known mailing address and through appropriate means for any address or contact information (including email addresses and telephone numbers)."
Internal Revenue Service [IRS]


SALGBA National Conference for public sector benefit professional

Sponsored by SALGBA [State and Local Government Benefits Association]

The SALGBA National Conference will be held April 29 – May 2, 2018 in Jacksonville, FL. More information please visit

PBGC Issues Proposed Regs on Owner-Participant Changes to Guaranteed Benefits and Asset Allocation
"The proposed regulations would conform the PBGC's regulations to the PPA.... Plan administrators should be aware that the proposed rule allows them to continue to use the simplified calculation in the existing rule to estimate benefits funded by plan assets."
Thomson Reuters Practical Law

Retirement Savings Opportunities for High Earning Owners and Professionals
"[F]or most high-earning owners and professionals, the evaluation of the tax effectiveness of their 401(k) and cash balance plan will involve only a change in tax rate from 39.6 percent to 37 percent.... [T]his may cause subtle changes in design and contribution levels, but it does not change fundamental decisions on whether to adopt one or both plan types."
Findley Davies | BPS&M

More 401(k) Plans Moving Away from Revenue-Sharing Model
"[A] Callan survey showed that 54.7% of plans used a per-participant fee last year to pay for plan administration vs. 41.6% in 2016.... A survey ... by Willis Towers Watson PLC found 41% of plans used a fixed-dollar amount per participant for record-keeping fees vs. 32% in 2014 ... DC industry members said there's room for revenue sharing depending on plans' unique circumstances. And in the case of 403(b) plans with lineups heavily weighted toward annuities, sponsors cannot easily drop revenue sharing."
Pensions & Investments

Should Plan Sponsors Consider Investing Retirement Plan Assets in Bitcoin? (PDF)
"Because cryptocurrency cannot be held and only exists as a few lines of computer code, the chance of it vanishing completely would be a concern to a plan sponsor who must have assets independently in the custody of a trust company.... One of the biggest challenges of bitcoin is its intangible nature.... Plan sponsors have to be able to know they own a particular asset and can value it in an accurate and timely fashion.... Cryptocurrencies remain a significant target for hackers and thieves."


PSCA's 60th Annual Survey of Profit Sharing and 401(k) Plans

Sponsored by Plan Sponsor Council of America [PSCA]

Does your plan offer Roth? 63 percent of plans do. Does your plan use automatic escalation to help employees save more? Three-fourths of plans do. Find out what other plans are doing to ensure your plan remains a competitive, best-in-class benefit.

Fidelity Puts 6 Million Savers on Risky Path to Retirement
"While deposits in the trillion-dollar sector have surged, Fidelity has seen nearly $16 billion in net withdrawals over the past four years ... The exodus stems in part from unease with the way Boston-based Fidelity has boosted performance -- by ramping up risk.... Fidelity portfolio managers now try to time market shifts, for instance by moving billions of dollars out of money-losing commodities bets and into Chinese stocks and U.S. tech shares[.]"

Bipartisan Bill Would Make Sweeping Changes to Retirement Plans
"Senate Finance Committee Chairman Orrin Hatch (R-UT) and Committee Ranking Member Ron Wyden (D-OR) have introduced the Retirement Enhancement and Savings Act of 2018 (RESA), previously introduced in similar form in 2016. If enacted, the legislation would make many changes to IRAs and employer-sponsored retirement plans and generally be effective for years after 2018."

How to Generate Retirement Cash Flow by Rebalancing
"A trap some retirees can fall into when it comes to retirement income planning is limiting their strategy to interest and dividends and neglecting the power of rebalancing to capture portfolio growth as an additional income source."
Charles Schwab


Senate 'Loan' Bill Is a Poorly Disguised Bailout for Private Pensions
"Do we want government to encourage private employers and unions to promise workers more than they can afford and then fail to set aside the money necessary to meet those promises? Because that's exactly what this proposal would do -- encourage the same reckless behavior that contributed to the $500 billion shortfall faced by roughly 1,300 multi-employer pension plans today. Unlike loans made in the private sector, which happen only where a legitimate expectation of repayment (and a risk-compensating interest rate) can be established, loans to insolvent pension plans would have a high expectation of default."
The Heritage Foundation

Benefits in General

Should You Transfer Money from an IRA to an HSA?
"[T]ransferring money from an IRA to an HSA will be of limited value, except in a small handful of cases. Most other IRA owners should leave their IRA assets intact and fund their HSAs with non-IRA dollars, the better to maximize contributions to both account types and take advantage of tax-sheltered savings."
Morningstar Advisor

Executive Compensation
and Nonqualified Plans

New Tax Law Provides Tax Deferral Opportunity for Certain Private Company Equity Grants
"[New] Code Section 83(i) ... will allow certain private company employees to defer federal income tax on eligible stock options and restricted stock units for up to five years following their respective exercise or settlement.... Section 83(i) could be useful for bridging the gap between when an employee is subject to income tax and when the employee's shares can be liquidated."
Morgan Lewis

Selected Discussions
on the BenefitsLink Message Boards

Deducted Too Much Pretax; How to Fix?
Participant went into the website of the Investment company and changed his pretax deduction from 10% to 2%. This was not picked up by payroll for 2 months, December and January. So too much was deducted from his paycheck. He wants the money. Should the excess be forfeited as a mistake of fact and the Participant made whole outside the plan? Should it be distributed to the Participant as an excess with the Plan issuing a 1099?
BenefitsLink Message Boards

Age 20-1/2 Eligibility Requirement?
Plan has this eligibility: Age 20-1/2, 1 YOS (1,000 hrs). Entry date: First day of plan year following. That's it. On the surface it seems it violates the 18 months rule, but I am half-remembering that the age 20-1/2 aspect somehow buys the plan an extra 6 months.
BenefitsLink Message Boards

Cash Balance Plan's 'Forfeitures Account' Can Be Used to Pay TPA Fees?
Can Plan expenses be paid out of a Cash Balance Plan's Forfeiture Account (similar to a 401(k))? For instance, TPA fees?
BenefitsLink Message Boards

EPCRS Correction for 3% SH with Non-SH Match
Plan is safe harbor non-elective with a 100% of 2% non-safe harbor match. A rehired employee was not given the opportunity to defer for 2017. I know that the fix for the deferral piece is 50% of the 3% plus the 3% safe harbor. But what about the match piece? I understand the regs to be 2% match. The employee's missed deferral was 3% (because of safe harbor non-elective), so the match is 100% of 2%?
BenefitsLink Message Boards

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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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