Retirement Plans Newsletter

January 9, 2019 logo logo
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ERISA Attorney
Kraw Law Group APC
in CA

Enrolled Actuary
EJReynolds, Inc.
in FL

Pension Administrator
Flynn, Shojinaga & Associates, Inc.
in CA

Pension Benefits Senior Analyst
Willis Towers Watson
in CO

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Webcasts, Conferences

Fiduciary Fundamentals
January 30, 2019 WEBCAST
Multnomah Group

How Labor, Employment, and Benefits Specialists Can Best Add Value to Your M&A Deal
February 5, 2019 WEBCAST
Morgan Lewis

IRA Essentials
February 8, 2019 in MI
Michigan Bankers Association

2019 Mid-Winter IRA Advanced Workshop
February 12, 2019 in NE
Nebraska Bankers Association

Benefits and Breakfast: Updates on Hot-Button Benefit Issues
February 12, 2019 in PA
Drinker Biddle & Reath LLP

Advanced IRAs
February 13, 2019 in KY
Kentucky Credit Union League

►See 159 Upcoming Webcasts and Conferences

►See 1462 Recorded Webcasts


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[Official Guidance]

Text of 2018 IRS Form 5500-EZ: Annual Return of a One-Participant Retirement Plan or a Foreign Plan (PDF)

"This form is required to be filed under section 6058(a) of the Internal Revenue Code. Certain foreign retirement plans are also required to file this form[.]" [Fillable PDF; may not open correctly in some web browsers.]
Internal Revenue Service [IRS]


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No VCP Fee Relief in Updated Rev. Proc.; Some Fees Increased

"Unlike prior years, the 2018 VCP fee was determined by reference to net plan assets with no reduced fees for minimum distribution, participant loan, or plan amendment failures.... The revised schedule drew some criticism from trade groups that advocated for a return to some of the reduced fees for common failures.... The updated procedure for 2019 in [Rev. Proc. 2019-04] does not budge on the VCP fees[.]"

401(k) Contribution Deadlines - You Don't Want to Miss Them!

"All 401(k) plan contributions have deposit deadlines -- and it's up to 401(k) fiduciaries to meet them.... [C]onfusion can easily lead to late contributions.... [C]onsequences for the employer ... range from mild (losing a tax deduction, making participants whole for lost earnings) to severe (plan disqualification, IRS and/or civil penalties).... [This article includes] a summary of the deposit deadlines applicable to all 401(k) plan contributions -- including how to correct late contributions."
Employee Fiduciary

Another University Wins 403(b) Suit

"In the course of the 28-page ruling, [Judge Collyer] took the plaintiffs to task for: [1] not appreciating the difference in standing between defined benefit and defined contribution plans ... [2] applying 401(k) plan standards to 403(b) ... and [3] 20/20 hindsight in evaluating investment decisions[.]" [Wilcox v. Georgetown Univ., No. 18-422 (D.D.C. Jan. 8, 2019)]
National Association of Plan Advisors [NAPA]

Most Pension Plans Will Have Seen Material Declines in Funded Status During December

"In December, discount rates decreased sharply from the 2018 high water mark the past couple months, dipping nearly 0.25%. Despite the decline, rates are still slightly higher than rates at the end of Q3 2018 and are up over 0.60% since the end of 2017."
River and Mercantile Solutions

Risk Sharing in Public Retirement Plans (PDF)

64 pages. "Shared risk plans are intended to increase the predictability of financial outcomes resulting from both positive and negative events affecting plans, sponsors and beneficiaries.... A primary consideration for any retirement plan sponsor is which types of risk, and in what proportion, are most appropriately borne by individuals, and which risks are best borne collectively, by institutions."
National Association of State Retirement Administrators [NASRA]

Retirement Savings: Priorities, Strategies, and Barriers

"Fewer than half (47%) of working Americans in their 40s and 50s with household incomes from $40,000 to $99,999 said retirement was one of their top three savings priorities for 2019 ... Just 21 percent said saving for retirement is their top priority for the new year."

Finding Your Tax Equilibrium Rate When Liquidating Retirement Accounts

"[W]ith some relatively simple and straightforward assumptions about future Social Security and pension payments, RMD calculations, and anticipated interest, dividends, and capital gains, it really is feasible to make a reasonable approximation of an individual's future tax rates to determine where the ideal equilibrium will be. And then engage in strategies from accelerated retirement account liquidations, to partial Roth conversions, and capital gains harvesting, as necessary to ensure that any currently-lower tax brackets are filled up to reach the equilibrium point."
Nerd's Eye View


People Who Saved for Retirement Are Being Punished by Social Security Taxes

"When Congress made Social Security benefits taxable in 1983, lawmakers didn't index the tax thresholds to inflation. They 'forgot' inflation again when adding a second layer of taxation in 1993. That means the proportion of recipients who have to pay federal income taxes on their benefits keeps increasing. Initially, only 1 in 10 Social Security recipients had to pay any federal tax. Now, it's over half."


Divestment: The Impact of Political Decisions on Public Pensions (PDF)

11 pages. " Divestment is rooted in arguments based on global urgency, political necessity, or morality. This is inherently against the fiduciary responsibility of public pension fund managers.... Divestment as a means of creating change is ineffective.... Expert financial management firms disagree on divestment strategies.... There are real, expensive costs associated with divestment which directly harmed public pensions."
Institute for Pension Fund Integrity

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

SEC Adopts Hedging Policy Disclosure Requirements

"Companies will be able to satisfy the new rules either by disclosing the practices or policies in full or by providing a fair and accurate description of their hedging practices or policies, including the categories of people affected and types of hedging transactions specifically allowed or not allowed. If a company does not have hedging policies, it will be required to state that fact or to state that hedging transactions generally are permitted."

[Guidance Overview]

Hedging Disclosure Is Here: SEC Adopts Final Rules

"The final rules ... require public companies to disclose their hedging practices and policies (whether or not written) for employees, officers and directors in proxy and information statements relating to the election of directors. This leaves only three sets of executive compensation-related rulemaking under the DFA that have not been finalized, related to performance-based compensation disclosures, clawback policies and excessive compensation at certain financial institutions."
K&L Gates

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David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

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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