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[Official Guidance]
Text of PBGC Interest Rate Update for Benefits Payable in Terminated Single-Employer Plans, May 2018
"The May 2018 interest assumptions under the benefit payments regulation will be 1.00 percent for the period during which a benefit is in pay status and 4.00 percent during any years preceding the benefit's placement in pay status. In comparison with the interest assumptions in effect for April 2018, these assumptions are unchanged."
Pension Benefit Guaranty Corporation [PBGC]
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First Circuit Agrees That Roth IRA Can Own DISC
"The IRS argued, and previously the Tax Court had agreed, that while both the DISC and the Roth IRA were enacted for the purpose of providing tax benefits to their owners and beneficiaries, the taxpayers used these provisions to improperly sidestep the Roth IRA contribution limitations.... In a majority opinion, the First Circuit concluded that the application of the substance over form doctrine to reclassify the dividends as excess contributions was inappropriate." [Benenson v. Commissioner, No. 16-2067 (1st Cir. Apr. 6, 2018)]
RSM US
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Missing Retirement Plan Participants and Employer Risk
"[T]he plan fiduciary needs to understand how ... uncashed check amounts will be tracked and/or managed.... [T]he amounts related to these uncashed check can be considered 'plan assets,' and thus still subject to trust and fiduciary obligations and in many cases may continue to earn income ('float') for the service provider, further complicating the fiduciary considerations for the plan sponsor."
Stevens & Lee
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Blockchain Technology and Its Impact on Employee Benefit Plans
"[Blockchain technology] will have the capability to transform the overall administration and recordkeeping, link payroll with participant accounts and investment elections and allow participants to more easily transfer money from one fund to another. One specific opportunity is the use of smart contracts for pension plans.... Blockchain would make it easier for all parties to review and approve documents."
Schneider Downs
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Strategies to Help Your Executives Maximize Their 401(k) Contributions
"Safe Harbor is an easy way of getting around most non-discrimination testing. It's also rather expensive.... Getting more employees to participate in the 401(k) can really move the needle on contribution limits for your HCEs.... higher default savings rates have little-to-no effect on employee participation. Setting a smarter default is an easy way to double your employee savings rates with little-to-no loss in participation."
ForUsAll
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April 18 Open Meeting Scheduled by SEC to Consider Investment Advice Standards
"The subject matters of the Open Meeting will be the Commission's consideration of: [1] whether to propose new and amended rules and forms to require registered investment advisers and registered broker-dealers to provide a brief relationship summary to retail investors; [2] whether to propose a rule to establish a standard of conduct for broker-dealers and natural persons who are associated persons of a broker-dealer when making a recommendation of any securities transaction or investment strategy involving securities to a retail customer; [3] whether to propose a Commission interpretation of the standard of conduct for investment advisers."
U.S. Securities and Exchange Commission [SEC]
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[Advert.]
Online Learning Course: 401(k) Plan Structure
![Sponsored by International Foundation of Employee Benefit Plans [IFEBP]](https://benefitslink.com/bnrs/2016/IFEBP_401kstructure_online_top.jpg "Sponsored by International Foundation of Employee Benefit Plans [IFEBP]")
Review considerations for structuring a 401(k) plan. Topics include salary deferral limits and catch-up contributions, matching and profit-sharing contributions, nondiscrimination testing and safe harbors.
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Interesting Angles on DOL Fiduciary Rule, Part 86
"Assuming that the 5th Circuit Court of Appeals decision is the final word, the old 5-part fiduciary test will automatically be reinstated.... Let's look at each of the 5 parts of the definition."
FredReish.com
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The Future of the DOL Fiduciary Rule
"The DOL's non-enforcement policy does not prevent private parties, including service providers and plan participants, from bringing lawsuits challenging the Fiduciary rule or compliance with the Fiduciary rule. Many service providers have expended substantial effort and expense in developing systems and procedures surrounding their investment advice in order to comply with the Fiduciary rule. These systems and procedures have been substantially socialized and adopted by plan fiduciaries, and may now be an expected service or cost of doing business in the retirement and IRA industries."
Pillsbury Winthrop Shaw Pittman LLP
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Single Retirees Feel More Vulnerable to Longevity Risk
"[O]nly 64 percent of single retirees feel confident they will be able to live the lifestyle they want in retirement, compared with 71 percent of married retirees. Four in ten single retirees believe their savings won't be enough if they live to age 90 -- close to half of single women are not confident their savings will last through age 90."
LIMRA
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Kentucky Governor Signs Pension Reform Bill; State Attorney General, Two Employee Groups File Lawsuit
"Kentucky Gov. Matt Bevin signed into law Tuesday a pension reform bill ...[under which] teachers hired after Jan. 1, 2019, will be enrolled in a cash balance plan instead of the existing defined benefit plan at the $18.1 billion Kentucky Teachers' Retirement System, Frankfort.... Wednesday's lawsuit ... condemns lawmakers for passing a bill that lacked an actuarial analysis at the time and was not subject to public comment or testimony ... [T]otal unfunded liabilities for KRS, KTRS and the $327 million Kentucky Judicial Form Retirement System, Frankfort, [are] $64 billion."
Pensions & Investments
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How Have Pension Cuts Affected Public Sector Competitiveness for Employees? (PDF)
"[The authors find that] workers hired after benefit cuts had earned less in the private sector than similar workers hired before the cuts occurred.... [P]ension cuts appear to reduce the ability of public sector employers to compete with private sector employers for workers.... [T]he finding does indicate that states and localities should at least consider how pension cuts might affect recruitment and retention."
Center for State & Local Government Excellence
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Executive Compensation
and Nonqualified Plans
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[Guidance Overview]
Tax-Exempt Executive Compensation Under Fire
"To which tax-exempt entities do the new taxes apply? ... Who is a covered employee? ... What is an 'Excess Parachute Payment' for purposes of the Parachute Tax? ... What is 'Remuneration' for purposes of the Excess Compensation Tax? ... Do the Excess Compensation Tax and the Parachute Tax apply to individuals providing services through another entity, a partnership, or in a capacity other than that of an employee? ... What should tax-exempt entities be doing at this time, and what, if any, planning opportunities are there to address these new taxes?"
Michael Best
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Selected Discussions
on the BenefitsLink Message Boards
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Exclude HCE from Safe Harbor Allocation Eligibility via a Board Resolution?
Plan has 3 partners and a few NHCEs. Provides a 3% flexible SH to all employees. Plan does not exclude HCE from the safe harbor. Plan is top heavy. Employer wants to exclude one partner from receiving the safe harbor. Can one HCE/Owner be excluded from receiving safe harbor via a board resolution without spoiling the plan's safe harbor status?
BenefitsLink Message Boards
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Are Distributions from a 457(b) Plan Allowed to a Retired-but-Rehired (Part-Time) Employee?
New client is a governmental entity that sponsors a 457(b) plan. An employee has attained normal retirement age under the plan and retired. He did not take a distribution at retirement. Four months later, he becomes re-employed in a part-time position, which means he is not eligible to contribute to the 457(b) plan. The employee is asking for a distribution. Can do?
BenefitsLink Message Boards
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BenefitsLink.com, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
(407) 644-4146
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.
Links to web sites other than BenefitsLink.com and EmployeeBenefitsJobs.com are offered as a service to our readers; we were not involved in their production and are not responsible for their content.
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401(k) Administrator
