Retirement Plans Newsletter

October 8, 2018 logo logo
Search   ·   Past Issues   ·   Get Message Boards Digest   ·   Get Health & Welfare News


Retirement Plan Administrator
Nicholas Pension Consultants
in CA

ERISA Litigation Associate
Robinson & Cole LLP
in NY

►See All Jobs

►Post a Job

Webcasts, Conferences


New Topics on the BenefitsLink Message Boards

New Comments and Topics

All Topics, Grouped by Forum

This Newsletter:
Subscribe Now

BenefitsLink Health & Welfare Plans Newsletter:
Subscribe Now

Message Boards Digest:
Subscribe Now

[Guidance Overview]

Section 404(c) Compliance: Added Protection Makes It Worth the Effort (PDF)

"Section 404(c) of ERISA dates all the way back to 1974, but plan sponsors and fiduciaries are still trying to figure out what it means for their defined contribution plans. While the protection it provides to plan fiduciaries is valuable, the list of requirements can be intimidating."
Fred Reish, for Wells Fargo


Findley Davies | BPS&M is now Findley

Sponsored by Findley

We make the complex world of retirement, benefits, human capital and M&A simpler for organizations across the nation. Learn how!
FINDLEY is: Flexible, Innovative, Nimble, Dynamic, Loyal, Experienced and integritY

IRS Updates Plan Correction Procedure

"IRS released [Rev. Proc. 2018‑52, which requires] plans, effective April 1, 2019, to use for voluntary correction program submissions; paper filings and checks will no longer be allowed after that date. While the updated procedure does not address either the recoupment of overpayments or the expansion of the self-correction program, the IRS says it is considering changes on these topics in response to comments."

PBGC Issues Final Regs on Guaranteed Benefits and Asset Allocation for Retirement Plans with Owner-Participants

"The final regulations are identical to the proposed regulations issued by the PBGC in March 2018 except that the final regulations: [1] Add language to DOL Reg. Section 4022.26 (the benefit payment regulation) to clarify that in a bankruptcy termination under the PPA, the length of time that the plan was in existence is measured from the later of the effective date or the adoption date of the plan to the bankruptcy filing date.... [2] Do not include the proposed amendment to the PBGC's regulation on termination of single-employer defined benefit plans."
Thompson Reuters Practical Law

Benchmarking the Features of a 401(k) Plan

"Business owners who sponsor plans must manage their fiduciary responsibilities, including plan management, hiring and monitoring service providers, employee education, participant communication, administrative support, and plan design." [Article includes 10 questions and discussion.]
Journal of Accountancy

Annuity General Accounts vs. Separate Accounts (PDF)

"In the simplest terms, the primary difference between the two types of accounts is that a general account is subject to the creditors of the insurance company, while the separate account is not subject to creditors. Here are the full definitions of each[.]"
Groom Law Group via PLANSPONSOR

Editor's Pick Tax-Efficient Charitable Giving of Savings or Retirement Benefits

"This article discusses how savings or retirement lifetime and survivor benefits may be used to fund charitable contributions in a tax-efficient manner. These tax advantages may be offset by other considerations, tax and otherwise.... The most favorable tax consequences arise from special or demonstrative (pecuniary) bequests, which are treated like plan designations. General (pecuniary) bequests, unlike residuary bequests, may cause a mismatch between income and charitable deductions."
Albert Feuer, via SSRN

Navigating Complex Financial Decisions at Retirement: Evidence from Annuity Choices in Public Sector Pensions

"Choices regarding the disposition of wealth at retirement can have substantial implications for retirement income security.... Using combined administrative records and survey data, [the authors] explore the role of individual and household characteristics as well as risk preferences, time preferences, and financial literacy.... Comparing retirees who chose different annuities, ... these groups of retirees report very different levels of well-being in retirement."
National Bureau of Economic Research [NBER]; purchase required for full document


Lifetime Income 'Puzzle' Pieces

"[A]cademics can't quite understand is the reluctance of American workers to embrace annuities as a distribution option for their retirement savings.... [A] number of explanations have been put forth to explain this reluctance: the fear of losing control of finances; a desire to leave something to heirs; discomfort with entrusting so much to a single insurer; concern about fees; the difficulty of understanding a complex financial product; or simple risk aversion.... Yet today the annuity 'puzzle' remains largely unsolved."
Data 'Points'


The Case for Liability-Driven Investing

"[A] number of courts have recently dismissed ERISA actions involving allegations of excessive fees and/or breach of plan sponsor fiduciary duties.... [The author believes] that the plaintiff's bar can strengthen their cases and possibly prevent such questionable dismissals by focusing on Section 90, comment h(2) [of the Restatement (Third) of Trusts, which] essentially states that the use or recommendation of an actively managed mutual fund is imprudent unless the fund is cost-efficient. This position is a follow-up to Section 90, comment b, which states that fiduciaries have a duty to be cost-conscious."
The Prudent Investment Fiduciary Rules


ARA Comment Letter to Treasury Department on Potential Changes to Life Expectancy and Mortality Tables Following Recent Executive Order (PDF)

"ARA recommends [1] any change to the life expectancy and distribution tables be finalized at least six months prior to the beginning of the calendar year for which they are effective, in order to allow time to revise software and administrative procedures to calculate new amounts.... [2] that no changes to the life expectancy and distribution tables be made unless the change is significant enough to justify the costs and complexities of transitioning to new morta lity tables.... [3] that in the future, ... the IRS review the tables and determine whether another change is justifiable every five years, rather than updates being done on an annual basis."
American Retirement Association [ARA]

Benefits in General

[Guidance Overview]

IRS Notice Takes a Bite Out of the Business Expense Deductions for Meals, Entertainment

"[Notice 2018‑76] explained that, under Code Section 274(k), no deduction is allowed for food and beverage expense unless the expense is not lavish or extravagant under the circumstances and the taxpayer or an employee of the taxpayer is present at the furnishing of the food and beverage. If those requirements are satisfied, the amount of the deduction is limited to 50 percent of the amount of the food and beverage expense under Code Section 274(n)(1)."
Jackson Lewis P.C.

Editor's Pick A Broad Explanation of ERISA Fiduciary Insurance (PDF)

15 pages. "[M]ost D&O policies do not protect against ERISA claims due to a common ERISA exclusion.... [E]mployee benefits liability insurance covers claims involving administrative errors that are not treated as breaches of fiduciary duty.... Civil penalties, like audit CAP monetary sanctions, are not covered under a standard fiduciary or employee benefits liability policy.... [E]xisting fiduciary liability insurance coverage [generally] will not cover risks relating to liability related from state law causes of action (that are not preempted), for data breaches as opposed to liability resulting from a breach of an ERISA fiduciary duty relating to a privacy or security breach."

Selected Discussions
on the BenefitsLink Message Boards

$10,000 Request for Change in Funding Method Despite Merger of Plans

Two plans are sponsored by the same company. They want to merge them in order to make administration easier. One plan has a funding shortfall in the year before the merger but the other does not. So Rev. Proc. 2017‑56 seems to say that the change in funding method would not qualify for automatic approval of a change in funding method. But, as of the merger date, the assets in the second plan are such that all shortfall amortizations in the first plan will be wiped, out and the plan after the merger will be more than 100% funded. The $10,000 user fee under Rev. Proc. 2017‑4 seems excessive here because one company sponsors both plans and the only reason the change wouldn't qualify for automatic approval is a funding shortfall that's taken care by the merger. Comments?
BenefitsLink Message Boards

24 vs. 26 Pay Periods: OK to Withhold Deferrals on Only 24?

Client has 26 pay periods per year, resulting in two months (March and August) having three pay dates. The client's payroll system is unable to process voluntary benefits, including 401(k) deferrals on a 26 pay period basis (not sure why, just what I've been told). So, although there are 26 pay periods per year, deferrals for the retirement plan are pulled from only 24. This fact has been widely communicated and is standard knowledge to employees. Has anyone seen anything in the Internal Revenue Code that would prohibit this arrangement?
BenefitsLink Message Boards

Late 402(g) Refund

A participant exceeded the 402(g) limit in 2017 by $98.18. What's the fix now, given that so much time has gone by?
BenefitsLink Message Boards

► Subscribe to the BenefitsLink Message Boards Digest— a free daily email of all new discussions (not just the selected few shown above). View a sample issue.

Press Releases

Nelson Mullins Announces Automated Tool for HIPAA Compliance
Nelson Mullins Riley & Scarborough LLP

Most Popular Items in the Previous Issue

Connect   LinkedIn logo   Twitter logo   Facebook logo, 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, 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.

Links to web sites other than and are offered as a service to our readers; we were not involved in their production and are not responsible for their content.

Unsubscribe  |   Change Email Address  |   Privacy Policy