Retirement Plans Newsletter

January 8, 2019 logo logo
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Pension Administrator
Duncan Financial Group
in PA, Telecommute

Financial Operations Settlement Analyst
Willis Towers Watson
in FL

Quality Assurance Automation Specialist
Willis Towers Watson
in UT

Senior Retirement Actuarial Analyst
Willis Towers Watson
in MO

Pension System Implementation Manager
Willis Towers Watson
in IL

Health and Benefits Analyst
Willis Towers Watson
in GA

Conversions Consultant
Newport Group
in CA

Qualified Plan Consultant
Newport Group
in FL

Internal Sales Consultant
Newport Group
in CA, NC

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Webcasts, Conferences

M&A Planning for the Plans: Executive Compensation and Employee Benefit Plans
January 29, 2019 WEBCAST
Morgan Lewis

New Hardship Distribution Rules for 401(k) Plans
January 31, 2019 WEBCAST

2019 Enrollment Technology Strategy Seminar
February 5, 2019 in FL

Advanced IRAs
February 6, 2019 in MI
Michigan Bankers Association

2019 Top 10 IRA Issues
February 7, 2019 WEBCAST

2019 Mid-Winter IRA Essentials Workshop
February 11, 2019 in NE
Nebraska Bankers Association

IRA Essentials
February 12, 2019 in KY
Kentucky Credit Union League

East Coast Defined Contribution Conference
March 10, 2019 in FL
Pensions & Investments

Dealing with Participant Loan Defaults [2019]
March 20, 2019 WEBCAST
FIS Relius Education

Spring 2019 Compliance Conference
April 28, 2019 in FL
National Regulatory Services [NRS]

►See 135 Upcoming Webcasts and Conferences

►See 1464 Recorded Webcasts


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[Guidance Overview]

IRS Provides Relief for Improper Exclusion of Part-Time Employees from 403(b) Plan Participation

"According to [Notice 2018-95], a 403(b) plan with a provision to exclude employees working less than 20 hours per week will not be considered noncompliant if it did not consider such employees eligible to participate in the 403(b) plan on an ongoing basis once those employees first completed 1,000 hours of service. The Notice includes a 'Relief Period' and a 'Fresh Start.' "


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Who's Got My Beneficiary Designation ... or Who Lost It?

"When plans and participants were younger, it is likely that no one paid these important forms much attention -- after all, no one was going to die, right?! But, with the workforce aging and plans maturing, it will be increasingly important that designations are retained somewhere so that the participant's named beneficiaries get what is coming to them.... Here are a few ideas for making sure you have proper beneficiary information when it is needed[.]"
Ferenczy Benefits Law Center

Multiple Employer Plans: Their Potential Impact on the Retirement Plan Landscape

"Recordkeepers, financial advisors, asset managers, banks, third-party administrators and other firms might form strategic alliances to provide the necessary services.... Technology companies might see this new type of arrangement as an opportunity to disrupt the marketplace by developing creative solutions that would be difficult for entrenched providers with legacy systems to emulate. Employers with existing defined contribution plans might find a MEP's reduced fiduciary responsibility and potentially lower costs attractive and drop their separate plans in favor of joining a MEP."
J.P. Morgan Asset Management

Four Critical ERISA Cases to Watch in 2019

"[1] Plan participants' role in retirement plan management put into question.... [2] Will the standard challenge finally make its way to the Supreme Court? ... [3] Courts grapple with which party must prove loss causation in a breach of fiduciary duty case.... [4] The [DOL]'s fiduciary rule meets its demise."
401K Specialist

Second Circuit Allows IBM Stock Drop Case to Proceed

"Jander does not resolve the 'would have' vs. 'could have' issue. Instead, the Jander court holds that, ... where disclosure of the inside information is likely in the near future ... in effect no fiduciary could conclude that disclosure would do more harm than good. This holding, in the court's view, does not conflict with related restrictions on securities fraud litigation (a related securities fraud case based on more or less identical facts was dismissed), because the ERISA action is based on fiduciary breach, not fraud.." [Jander v. Ret. Plans Comm. of IBM, No. 17-3518 (2d Cir. Dec. 10, 2018)]
October Three Consulting


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Ninth Circuit Rejects Petition for Rehearing from Chevron 401(k) Participants

"On Jan. 3, three federal appeals court judges voted to deny the request for a rehearing en banc ... The participants had sought class-action status. They claimed that some funds in the Chevron plan's investment lineup had charged 'unreasonably high' investment management fees among the six fiduciary breach claims." [White v. Chevron Corp., No. 17-16208 (9th Cir. Nov. 13, 2018, unpub.)]
Pensions & Investments

Selecting and Monitoring Target Date Funds

"Things [for plan fiduciaries] to consider are: [1] How well does the TDF's characteristics align with the ages and expected retirement dates of the plan participants? [2] What are the principal strategies and risks of the fund? [3] Have there been any changes to the investment strategy or management team since the fund was initially chosen? [4] What is the glide path? [5] What are the fees and expenses, including sales loads?"
Retirement Management Services, LLC

An Annuity Is Not a Holiday Sweater: A Look at Lifetime Income in TDFs

"[An] 'auto-annuitize' feature in a TDF does not serve the best interest of defaulted DC plan participants.... [T]ools that largely exist today and are achievable within our current regulatory framework ... include: [1] Removing age restrictions and mandatory cash-outs. [2] Granting greater withdrawal flexibility for retired participants. [3] Allowing for incoming rollovers. [4] Offering investment options oriented to current retirees. [5] Providing enhanced advice and education that may inform participants of annuitization as an option."

Will 401(k) Plan Sponsors Fall for These Over-Hyped Topics?

"[1] Student loans in 401(k) plans ... [2] Annuities in 401(k) plans ... [3] All-passive 401(k) plans ... [4] Financial wellness ... [5] On-line education."
Fiduciary News

Are Cybercriminals Targeting Your 401(k)? (PDF)

"[S]teps you should take now to protect your 401(k) assets: [1] Check your account regularly.... [2] Use a unique and strong password.... [3] Beware of phishing scams ... [4] Avoid using public computers and public Wi-Fi networks ... [5] Never share your login username or password ... [6] Inquire with your 401(k) service provider or human resources department about the availability of advanced security measures."
Francis Investment Counsel LLC


Disclosure Requirements the SEC Could Adopt -- That Would Make Sense

"While disclosures are not the most effective means of consumer protection, the disclosure forms [in this article] would provide consumers with much more useful information. These forms of disclosure would more clearly provide consumers with information that permits them to understand the role their broker or investment adviser is in, and the duties owed (or not owed) to the consumer."
Ron A. Rhoades, JD, CFP

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

IRS Issues Guidance on Excise Tax on Executive Compensation of Tax-Exempt Entities

"In determining the total remuneration paid, payments by the [applicable tax exempt organization (ATEO)] and all related entities are considered. Related entities can include for-profit organizations and governmental organizations. Related entities share common control. The IRS guidance specifically rejects the control group test for qualified plans that uses 80% and adopts a 50% test -- more than 50% ownership for stock corporations; partnerships; trusts, using beneficial interests -- and more than 50% of directors or trustees who are representatives of nonstock entities."
Nelson Mullins

[Guidance Overview]

Details on the SEC's Final Rules on Hedging Policies

"The SEC resisted all requests to provide a definition of hedging, instead placing that burden entirely on the company ... However, the rules make it very clear that the SEC intends the disclosure requirement to apply very broadly.... There is less risk of misleading investors if the policy is disclosed word-for-word."
Winston & Strawn LLP

ISS Updates U.S. Compensation and Equity Compensation Plan Policies for 2019

"Equity plan amendments that involve removal of general references to Section 162(m) qualification (including references to approved metrics for use in performance plan-based awards) will be viewed as administrative and neutral. However, the removal of individual award limits in an equity plan will be viewed as a negative change, as ISS considers such limits to be consistent with good governance practices."
Benefits BCLP

Selected Discussions
on the BenefitsLink Message Boards

Still Enough Time to Amend 2019 Safe Harbor Plan to Exclude Class of Employees?

Can I amend a 2019 3% SH plan now to exclude a certain class of employees? Coverage not a problem. None of the current employees thusly situated are eligible for the plan at this time.
BenefitsLink Message Boards

5500 Newbie Has Question About Question 8a

Am doing a 5500-SF filing for a "one-participant" plan -- 2 sibling partners in a general partnership with 2 self-employed 401(k)s that use the EIN of the partnership. For question 8a on 5500-SF, is the employee contribution of up to $18,500 per person (in 2018) to 401k go to 8a(2) participants and the 20-25% go to employee amount go to 8a(1) employers.... or does IRS want "one-participant" plans to lump all 401k (employer and employee) contributions to 8a(2) participants because it is not a "single employer plan"?
BenefitsLink Message Boards

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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2019, 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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