Retirement Plans Newsletter

January 10, 2019 logo logo
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Webcasts, Conferences

ERISA Litigation - Are You Bullet-Proofed for the Inevitable?
January 11, 2019 WEBCAST
McDermott Will & Emery LLP

Legislative and Regulatory Benefits Update
February 7, 2019 in IL
Worldwide Employee Benefits Network [WEB] - Chicagoland Chapter

2019 Mid-Winter IRA Essentials Workshop
February 13, 2019 in NE
Nebraska Bankers Association

Nondiscrimination Testing for Actuaries
February 26, 2019 WEBCAST
ASPPA College of Pension Actuaries [ACOPA]

Multiemployer Pension Plan Withdrawal: An In-Depth Examination
March 19, 2019 WEBCAST

►See 163 Upcoming Webcasts and Conferences

►See 1462 Recorded Webcasts


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[Guidance Overview]

Puerto Rico Treasury Department Issues Guidance on Retirement Plan Limits for 2019

"For plans qualified only in Puerto Rico, the limits on elective deferrals, catch-up and after-tax contributions, all remain unchanged for 2019, while the limits on annual benefits, annual contributions, and plan compensation, and the highly-compensated employee threshold, all increased for 2019. For plans qualified both in Puerto Rico and the U.S. ... the limits on catch-up and after-tax contributions, all remain unchanged for 2019, while the limits on elective deferrals, annual benefits, annual contributions, and plan compensation, and the highly-compensated employee threshold, all increased for 2019."
Groom Law Group


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[Guidance Overview]

IRS Proposed Regs Relax Requirements for Hardship Distributions

"The proposed regulations generally clarify or supplement recent statutory changes, including those made by the Bipartisan Budget Act of 2018. Except where noted, the rules and changes summarized herein also apply to plans of tax-exempt organizations under Section 403(b).... Except for the required elimination of the six-month contribution suspension as of January 1, 2020, plan sponsors generally will have flexibility with implementing the above changes after the proposed regulations are finalized."
McCarter & English

Driving Plan Participation Through Education Efforts

"Follow these guidelines to ensure an effective and successful education program, and in turn, drive participation rates. [1] Cover basic investment concepts ... [2] Address possible misconceptions ... [3] Emphasize financial wellness ... [4] Encourage attendance ... [5] Commit to education."

The Stock Market Soap Opera and Some Basic Math

"[Is] the current stock market 'crisis' real -- or just a soap opera? And, if the 'crisis' has substance, should it cause concern for retirement plan investors? ... For most of us, the answer is to stay the course and maintain a properly diversified investment strategy, regardless of market performance, and avoid being reactionary to market events. A proper understanding of percentage movements in the market should help in this regard, as opposed letting the media narrative drive decisions."
Cammack Retirement Group

Alight Solutions 401(k) Index Full Year 2018 Observations

"[P]articipants were very active during the year, with 46 days of above-normal daily transfer activity -- the highest number of above-normal days in the last five years, much higher than the 13 days of above-normal trading in 2017. On the other hand, net trades in 2018 amounted to only 1.42% of total plan balances, making 2018 a record low year for trading activity in the over 20-year history of the Index."
Alight Solutions


Managing your 401(k) Plan: A Day in the Life of a Healthy 401(k)

Sponsored by Lorman and BenefitsLink

Feb. 7 webinar. Ensure all parties are fulfilling their obligations under ERISA and that your organization's 401(k) program is running smoothly. BenefitsLink discount.

4 in 10 Small Businesses Currently Offer Retirement Benefits

"40 percent of small business employers (2-99 employees) feel retirement benefits are more important now than three years ago with 57 percent say it is equally as important.... While only 37 percent of companies with less than 10 employees say they are more important now than three years ago, that number goes up to 64 percent for companies with 50-99 employees."

House Ways & Means Committee Chairman Introduces Legislation to Address Multiemployer Pension Crisis

"The bill establishes the Pension Rehabilitation Administration (PRA), a new agency within the Department of the Treasury, authorized to issue bonds in order to finance loans to 'critical and declining' status multiemployer pension plans, plans that have suspended benefits, and some recently insolvent plans currently receiving financial assistance from the [PBGC]."
Committee on Ways and Means, U.S. House of Representatives

Pensionomics 2018: Measuring the Economic Impact of Defined Benefit Pension Expenditures

"Each dollar paid out in pension benefits supported $2.13 in total economic output nationally. Each taxpayer dollar contributed to state and local pensions supported $8.48 in total output nationally. This represents the leverage afforded by robust long-term investment returns and shared funding responsibility by employers and employees. The largest employment impacts occurred in the real estate, food services, health care and retail trade sectors."
National Institute on Retirement Security [NIRS]

Assessing Economic Resources in Retirement: The Role of Irregular Withdrawals from Tax-Advantaged Retirement Accounts

"Compared to total household income, irregular IRA and pension withdrawals amount to about 5 percent of income for singles and 10 percent of income for married households. The irregular withdrawals are concentrated among those in the highest wealth quartile and those in the highest education group, reflecting the higher prevalence of pensions in high-paying jobs that are predominantly held by those with high education. Thus, they have little impact on poverty rates."
Michigan Retirement and Disability Research Center, Univ. of Michigan


2019 Wish List for Regulation of Financial and Investment Advice

"[1] Have the SEC alter how the Advisers Act is applied and enforced.... [2] The states should move to adopt fiduciary standards for brokers who provide investment advice.... [3] Clean up mutual fund regulation.... [4] Solve the problems in defined contribution plans ... [5] Reduce broker-dealer conflicts of interest.... [6] Work to reduce regulatory overkill.... [7] Disband FINRA."
Ron A. Rhoades, JD, CFP

Benefits in General

$28 Trillion and Personal Liability: ERISA Roars Back

"[T]he 10 highest ERISA class action settlements in 2017 with respect to employer-sponsored retirement plans totaled nearly $1 billion.... In recent years, ERISA fiduciary litigation has increasingly focused on excessive plan fees and expenses... Looking ahead, fiduciaries' decisions about monitoring costs and who they appoint and hire to administer health plans will be important drivers of ERISA litigation -- and often, companies are not fully aware of this growing threat."
Crowell Moring

Executive Compensation
and Nonqualified Plans

Revising 162(m) Disclosures in Proxy Statements

"The Section 162(m) deduction limit for performance-based compensation was repealed by the Tax Cuts and Jobs Act, effective for taxable years beginning after December 31, 2017, subject to transition relief. Public companies should consider revising disclosures in their upcoming proxy statements. Recently filed proxy statements may provide some ideas, a sample of which is noted [in this article]. The disclosures seem to range from 'compensation in excess of $1,000,000 will no longer be tax deductible, get used to it' to 'it may not be deductible, but we still intend to tie pay to performance.' "


Shareholder Letter May Prompt More Descriptive CEO Pay Ratio Disclosures

"[A] shareholder letter ... that was sent to Fortune 500 company compensation committees from a group of 48 institutional investors ... requests far more information than needed to provide shareholders insights on these issues, many of which may give employee advocates and unions more information to leverage in negotiations or provide competitors with critical proprietary business information. In many cases it would greatly increase the amount of information collected and the burden on internal systems."
Willis Towers Watson

Selected Discussions
on the BenefitsLink Message Boards

Missed Disclosure to Participants on Change in Investment Options

A 401k plan converted from one investment product to another product with the same recordkeeper. A couple, but not all, funds in the plan's core lineup changed and the account number changed. Discovered that the notice to the participants announcing the change was not delivered. Is the fix to forward the notice now to communicate the change? What other correction would/should be made?
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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