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Retirement Plans Newsletter August 13, 2018 |
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Jobs |
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Webcasts, Conferences 2018 Legislative Update
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Discussions |
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This Newsletter:
BenefitsLink Health & Welfare Plans Newsletter:
Message Boards Digest:
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Client Service Representative|
[Guidance Overview]
Text of IRS Publication 4285: SEP Checklist (PDF) Rev. Aug. 2018. "Every year it's important that you review the requirements for operating your Simplified Employee Pension (SEP) plan. Use this checklist to help you keep your plan in compliance with many of the important rules."
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[Guidance Overview]
Text of IRS Publication 4284: SIMPLE IRA Plan Checklist (PDF) Rev. Aug. 2018. "Every year it's important that you review the requirements for operating your Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) IRA plan. Use this checklist to help you keep your plan in compliance with many of the important rules."
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"Judge Kevin McNulty of the United States District Court for New Jersey held that using the Segal Blend by the UAW Local 259 Pension Fund did not violate MPPAA. The decision creates a split within the two district courts to have considered the issue, and opens the door to a possible Circuit Court split ... A Supreme Court decision on this issue would then become a real possibility." [Manhattan Ford Lincoln, Inc. v. UAW Local 259 Pension Fund, No. 17-5076 (D.N.J. July 3, 2018)]
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Victory for NYU After First Trial in the 401(k) Fee Cases Filed Against Colleges and Universities "In the past two years, more than 16 prominent colleges and universities across the country have been targeted by class action lawsuits filed under [ERISA] challenging the fees and investment lineups in the schools' retirement plans.... As the first case to consider the merits of the claims asserted in these ERISA class actions, Sacerdote is not only a significant victory for NYU but also for the other colleges and universities defending similar suits." [Sacerdote v. New York Univ., No. 16-6284 (S.D.N.Y. July 31, 2018)]
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Non-ERISA 403(b) Plan Sponsor Cited for Late Deposit of Deferrals "Among other things, the school board has asked the charter school to provide documentation that the affected participants have been notified of the delay of the transfer of contributions and to submit a plan to address any potential investment losses by employees as a result of the late transfer of contributions."
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[Advert.]
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One Reason Many DC Participant Communication Programs Fail "[O]ne facet many participant communication professionals don't consider is intent -- whether the individual participant is planning to make a change to his or her retirement plan account. Depending on their level of intent, participants will either require more specific information to inform their upcoming decision, or content that validates their current retirement saving strategies or motivates necessary changes."
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15 pages. "Almost one-fifth of all Americans approaching retirement are at the low end of the readiness spectrum (not ready at all), having saved 20 percent or less of the money they will need for retirement.... In general, workers in blue- ... and gray-collar occupations ... are less prepared for retirement than their white-collar counterparts (49 percent versus 44 percent) ... Conversely, those working in Engineering and Protective Services are performing above the norm of all workers when it comes to retirement readiness."
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"[T]he top concern of plan sponsors was whether the plan was effectively preparing employees for retirement financially (33 percent), whereas in 2017 the main focus was on reducing business costs related to the plan (32 percent).... While last year's potential regulatory changes were top of mind for plan sponsors, this year, the top reason they hired advisors was to help improve their plans (27 percent versus seven percent in 2017)."
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"Through Aug 6, consumer and industry groups, as well as individuals, had submitted just over 3,800 letters ... But the state attorneys general's remarks carry particular weight because of their regulatory powers and ability to sue the government if the rule falls short of its intended goals. Judging from their comments, they're mad as hornets at the proposed measure."
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Pennsylvania Commission Scrutinizes Active Management of Public Pension Assets "Studying the costs and benefits of both active and passive investment strategies and developing recommendations to generate $3 billion in savings over 30 years is the directive for the Public Pension Management and Asset Investment Review Commission, created in 2017 as part of Pennsylvania's public pension reform legislation."
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How to Increase Your Current Retirement Spending Budget Under the Actuarial Approach "[1] Work part-time.... [2] Consider all your assets.... [3] Defer commencement of Social Security or purchase a fixed life annuity.... [4] Marry someone with lots of assets who is willing to share them with you.... [6] Decrease your desired estate.... [7] Assume decreasing expenses after first death (for couples).... [8] Assume declining future real dollar recurring expenses as you age.... [9] Decrease the default lifetime planning period (LPP) assumption(s).... [10] Increase the default investment return assumption."
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[Opinion]
12 pages. "[S]pecific areas of the SEC' s Proposal ... that require further clarification and consideration by the SEC [include] ... [1] Clarify whether Regulation Best Interest applies to recommendations to participants in all employer-sponsored retirement plans.... [2] Confirm that retirement plan representatives are not retail customers.... [3] Clarify certain conversations regarding retirement accounts do not involve 'recommendations of any securities transaction or investment strategy involving securities.' ... [4] Clarify conflict mitigation requirements for broker-dealers recommending rollovers and offering proprietary products or limited menus."
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Executive Compensation |
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Possible Compensation Planning Opportunities in New Code Sec. 199A "A public company might look among its subsidiaries and find a qualifying trade or business that throws off predictable income, and that could be housed in an LLC or other pass-through entity, or is already in a pass-through. Then the company could award partnership interests to a few senior executives.... Existing pass-through entities, such as S-corporations or LLC/partnerships, could pay executives with more non-wage and non-guaranteed payments, which could qualify for the 20% deduction resulting in a lower tax rate to the recipient."
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Pay for the Top Executive at Long Island, NY Non-Profit Organizations (PDF) 12 pages. "Among the 118 organizations included in [this] study: [1] Revenue for the study group ranged from $20 million to $2.2 billion ... [2] Median number of employees equaled 581; [3] Median aggregate compensation paid to all employees equaled $27.0 million; [4] Median total compensation to the top executive equaled $458,059 for fiscal 2016 ... [5] Perquisites were provided and disclosed by 19% of the total sample."
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Deferred Compensation Claim of Exec Fired for Not Accepting Transfer Revived "The appeals court agreed with the employee that his refusal to accept the transfer to the new position could not reasonably be considered cause for terminating him. Rather, when he was offered the opportunity to assume a different position in Kansas, the offer involved a new set of 'material duties and obligations.' But the appeals court agreed with the district court's grant of summary judgment in favor of the employer on the exec's severance pay plan claims." [Peck v. SELEX Systems Integration, Inc., No. 17-7138, (D.C. Cir. July 17, 2018)]
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Ninth Circuit Withdraws Altera Opinion "The Ninth Circuit ... announced that it is withdrawing its July 24 opinion in the Altera Corp. case. The order announcing the withdrawal says it is being done 'to allow time for the reconstituted panel to confer on this appeal.' ... The Ninth Circuit [had found Treas. Reg. Sec. 1.482-7A(d)(2)], which requires related entities to share the cost of employee stock compensation for their cost-sharing arrangements to be considered qualified cost-sharing arrangements (QCSAs) and avoid IRS adjustment, withstands scrutiny under general administrative law principles and is therefore valid. " [Altera Corp. v. Comm'r, Nos. 16-70496, 16-70497 (9th Cir. Aug. 7, 2018)]
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Selected Discussions |
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Do Beneficiary Designations Continue After Plan Merger? Following a corporate acquisition, the profit sharing plan of Target merges into the profit sharing 401(k) plan of Buyer. Prior to plan merger, participants of Target profit sharing plan filed beneficiary designation forms. Buyer's profit sharing 401(k) plan is silent as to the effectiveness of these beneficiary designations. Because IRC section 414(l) provides that a merger of plans is the combining of plans into a single plan, it would appear that by operation of law the beneficiary designations made with respect to Target's plan remain in effect under Buyer's plan, which is post-merger the combination of two plans, until a new beneficiary designation is filed.
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Include Only One of Many Union Employees in a PS/401(k) Plan? Employer is asking if he can include Union Office Manager in his 401k/PS Plan. Knee-jerk reaction is NO! I think he has 20+ other Union plumbers.
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Most Popular News Items in the Previous Issue |
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Press Releases |
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ACOPA Honors Norman Levinrad with Edward E. Burrows Distinguished Achievement Award
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DOL Investigation Results in Court Ordered Restitution of $491,890 After 28 Union Members Pleaded Guilty to Filing False Healthcare Claims
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DOL Reaches Agreement to Distribute Assets to Eligible Participants of Sacred Heart Hospital Profit-Sharing 401(k) Plan
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USI Consulting Group Hires VP, Retirement Services
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David Rhett Baker, J.D., Editor and Publisher
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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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