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[Official Guidance]

EBSA Invites Comments on Proposal Related to Retirement Asset Auto Portability

"[EBSA] today invited public comment on a proposed exemption related to the consolidation of small retirement savings accounts in 401(k) plans and IRAs when workers change jobs.... [ERISA] and the Internal Revenue Code of 1986 prohibit a plan or IRA fiduciary from using its discretion to cause the plan or IRA to pay the fiduciary a fee. The Department has the authority, however, to grant exemptions that are protective of and in the interests of plan participants and IRA owners. The Department looks forward to receiving input from the public, including any data or factors that it should consider as part of the exemption, including protective conditions for participants and beneficiaries.... Any such comments or requests should be sent either by e-mail ... or by FAX ... within 45 days."
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]


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[Official Guidance]

Text of IRS 2018 Form 8880: Credit for Qualified Retirement Savings Contributions (PDF)

"Use Form 8880 to figure the amount, if any, of your retirement savings contributions credit (also known as the saver's credit).... Beginning in 2018, ... a retirement savings contribution credit may be claimed for the amount of contributions you make before January 1, 2026, to an ABLE account of which you are the designated beneficiary." [Also available as fillable PDF; may not open correctly in some browsers.]
Internal Revenue Service [IRS]

First Circuit: Duty to Mitigate Causation in ERISA Claims Falls on Defendants

"The First Circuit joined the Fourth, Fifth and Eighth Circuits holding that once a plaintiff demonstrates a fiduciary breach, the defendant has the burden to negate loss causation. Other circuits, including the Sixth, Ninth, Tenth and Eleventh Circuits, have held that a plaintiff bears to burden to establish loss causation. This issue is ripe for Supreme Court review." [Brotherston v. Putnam Investments, LLC, No. 17-1711 (1st Cir. Oct. 15, 2018)]
National Law Review

Jackson National Life Insurance to Pay $4.5 Million Settlement in Proprietary Investment Products Case

"Plan participants alleged that the 401(k) plan was filled with 'high-cost proprietary investment products' managed by Jackson National and its affiliates ... Plan managers failed to consider similar low-cost investment options offered by other investment managers, the lawsuit said. Subject to court approval, the four law firms representing the plaintiffs will be paid a total of up to $1.5 million, which is part of the settlement amount."
Pensions & Investments

Many Participants in the Dark on Their Allocations

"Twenty-two percent of retirement plan participants do not know how their assets are allocated ... This jumps to 34% of Baby Boomers but declines to 11% of Millennials. Among those who do know how their assets are allocated, they put 51% in equities, 15% in fixed income, 12% in cash, 11% in target-date funds (TDFs) and 10% in commodities."


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Annual Savings Trends Report Reveals How Individuals Are Saving for Their Financial Futures

"Retirement savers ages 25 to 34 are most likely to be on track to meet their retirement goals.... Plans designed with automatic enrollment features see an average participation rate of 80%, which is 10 percentage points higher than participation in plans without automatic enrollment.... 401(k) account balances across all generations and income ranges are relatively low compared to what most experts suggest will be required to cover retirement goals."

Editor's Pick 2019 Planning for Governmental Retirement Plan Operations

"In addition to the key items noted [in this article], plan sponsors may want to perform an annual 'checkup' (i.e., a review of operational practices and fiduciary responsibilities) to address plan expenses, design considerations, and investments."

37% of U.S. Pension Plans Have a Funded Status of 95% or More

"The number of US pension plans with assets equal to or exceeding 95% of their liabilities on an accounting basis has risen to 37%, nearly doubling from 20% at the end of 2017 ... For the majority of US corporate plans, the final deadline for plan sponsors to make contributions for the 2017 plan year was September 15 2018 ... [A] number of plans [put] in sizeable contributions before the deadline, thereby improving plans' funded positions further since June 30."

How Much Income Do Retirees Actually Have? Evaluating the Evidence from Five National Datasets

"The estimates of median replacement rates vary from 55 to 91 percent, depending on the definition of pre-retirement income. Using a target replacement rate of 75 percent, these estimates imply that between 42 and 60 percent of households are at risk of falling short."
Center for Retirement Research at Boston College

Can the Multiemployer Pension System Be Rescued by Subsidized Loans? (PDF)

"[The authors used the Multiemployer Pension Simulation Model (MEPSIM)] to simulate the effects of subsidized loans on the multiemployer pension system.... [1] In 30% of trials, the loan program has little or no impact on the number of plans projected to become insolvent.... [2] The net cost of the program -- [defined] as the present value of lending to plans minus the plans' repayments, computed at Treasury discount rates -- is an average of $56 billion across the 500 trials.... [3] In 55% of the stochastic trials, the projected reduction in the present value of PBGC assistance payments exceeds the net present value cost of the loan program.... [4] On average, across 500 trials, the loan program reduces the cost of insolvencies by about $3 billion[.]"
The Pension Analytics Group


Midterm Fallout: The Impact on Retirement Issues

"Rep. Richie Neal (D-MA)... is in line to become chairman of [the House Ways and Means] committee.... Neal's Retirement Plan Simplification and Enhancement Act (RPSEA), introduced in December 2017, includes numerous changes that seek to encourage small businesses to offer plans as well as simplify the existing rules for employer-sponsored plans.... It's not clear yet who will replace Hatch as chairman [of the Senate Finance Committee], and while Sen. Chuck Grassley (R-IA) is next in line, he would have to step down from his post as chairman of the Judiciary Committee.... [M]any still believe there's a small chance the Senate could act on RESA as part of a legacy-building salute to Hatch."
National Association of Plan Advisors [NAPA]

Benefits in General

[Official Guidance]

Text of IRS Disaster Relief Notice AL-2018-06, for Victims of Hurricane Michael in Alabama

"Victims of Hurricane Michael that took place beginning on Oct. 10, 2018 in Alabama may qualify for tax relief ... Individuals who reside or have a business in Geneva, Henry, Houston, and Mobile counties may qualify ... certain deadlines falling on or after Oct. 10, 2018 and before Feb. 28, 2019, are granted additional time to file through Feb. 28, 2019."
Internal Revenue Service [IRS]

Selected Discussions
on the BenefitsLink Message Boards

12b-1 Fees Paid After Plan Liquidation

Right now 12b-1 fees are returned to participants by the institutional trustee. After a plan is terminated and liquidated, what can the trustee do with 12b-1 fees it receives in arrears? This is further complicated when a plan sponsor has dissolved and there is no entity to which 12b-1 fees in arrears can be returned. Can the trustee/former trustee feel comfortable that this is no longer a prohibited transaction because the plan and/or the plan sponsor no longer exist?
BenefitsLink Message Boards

Distribution to U.S. Citizen Living Abroad

We have a participant who lives abroad but is a U.S. citizen. The participant filled out the required W-9 form for the distribution. How would this distribution be taxed? Would it be subject to 20% federal tax withholding and no state tax (even if the participant previously lived in a state that had state tax)?
BenefitsLink Message Boards

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Press Releases

Most Popular Items in the Previous Issue

A Brief History of 401(k) Plans (PDF)
Employee Benefit Research Institute [EBRI]

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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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