Retirement Plans Newsletter

January 11, 2019 logo logo
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DC Retirement Plan Consultant
Intac Actuarial Services
in NJ, NY

401(k) Retirement Plan Administrator
Alliance Pension Consultants, LLC
in IL

Pension Plan Administrator
American Pension Advisors, Ltd.
in IN

Senior Defined Contribution Administrator
Dunbar, Bender & Zapf, Inc.
in MD, OH, PA, VA, WV, Telecommute

Client Service Manager
in CA

Senior Relationship Manager
Newport Group
in AZ, CA, TX

Retirement Plan Administrator
Independent Retirement Consulting
in OR, Telecommute

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Webcasts, Conferences

Basics of 401(k) Plans (2019) - Part 1

Basics of 401(k) Plans (2019) - Part 2
January 24, 2019 WEBCAST

Basics of 401(k) Plans (2019) - Part 3
February 7, 2019 WEBCAST

2019 Mid-Winter IRA Advanced Workshop
February 14, 2019 in NE
Nebraska Bankers Association

Benefits and Breakfast: Updates on Hot-Button Benefit Issues
February 14, 2019 in IL
Drinker Biddle & Reath LLP

The New CEO Pay Ratio Rule: Developments and Updates
March 14, 2019 WEBCAST
Knowledge Group

Annual Conference
April 30, 2019 in FL
PSCA [Plan Sponsor Council of America]

►See 161 Upcoming Webcasts and Conferences

►See 1464 Recorded Webcasts


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[Official Guidance]

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

"What's New: ... The title of Form 5500-EZ has been changed to match the purpose of the form to include both a one-participant retirement plan and a foreign plan.... Plan characteristics code 3D has been updated to reflect the IRS changes for the pre-approved plans as prescribed in Rev. Proc. 2017-41[.]" [Also available: 2018 IRS Form 5500-EZ]
Internal Revenue Service [IRS]

[Guidance Overview]

IRS Issues Updated Eligible Rollover Distribution Notices

"The IRS recently updated its model notices in [Notice 2018-74] to include a number of significant changes in the law. There are two model notices, one for payments from a Roth account and one for payments not from a Roth account. Two changes addressed in the updated model notices apply to participants of most retirement plans, while others only apply to participants in certain governmental plans."
Frost Brown Todd LLC

New Year's Resolution: Prepare Yourself for an IRS or DOL Plan Audit

"How confident are you that your company's retirement plans are being run in accordance with all legal requirements under [ERISA] and the Internal Revenue Code? ... This Alert addresses what questions you should be asking when attempting to potentially minimize monetary sanctions, serious consequences to your employees, and personal liability for company officials who are ERISA-plan fiduciaries responsible for the investment of plan assets and plan administration that can stem from an IRS or DOL Plan audit."
Greenberg Traurig

Best Interest and Best Practices, Part 12

"This article discusses a novel approach for compliance with the fiduciary standard for the selection of investments for 401(k) plans.... [For the First Circuit Court of Appeals], the starting point is to consider index funds. Then, plan fiduciaries should seek to identify other funds, including actively managed funds, that can reasonably be expected to match or outperform the index funds." [Brotherston v. Putnam Investments, LLC, No. 17-1711 (1st Cir. Oct. 15, 2018)]

Boosting the Effectiveness of Retirement Plan Communications (PDF)

12 pages. "[T]he general public often misunderstands words that are commonly used by financial providers, employers and others in the retirement planning industry.... Even small tweaks can help break down complex ideas and make important financial information accessible to plan participants. Employers can support their participants by making their retirement communications easy to understand and free from jargon, then delivering them via the method of communication employees prefer."
Great-West Financial and Empower Retirement

Getting Your DB Plan Ready to Land Safely

"As plans get closer to their intended destination and as they line up for their (hopefully) final approach, emphasis needs to turn more towards addressing the liability risks.... Continually changing liabilities and short-term cash flow demands can provide severe and unpredictable turbulence and strong side winds on that final approach to the runway.... Making use of the best technology to regularly track not only your assets, but also your liabilities in detail -- and, most importantly, the interaction between the two -- is essential if you don't want to lose control at critical moments."

BlackRock to Cut 500 Jobs Amid Corporate Restructuring and Market Uncertainty

"BlackRock announced Thursday layoffs of about 500 employees, or 3% of its workforce, as part of company-wide restructuring. The planned staff cuts are firmwide, across all departments and geographies, and will happen over the next few weeks[.]"
Pensions & Investments

Examining the Fiduciary Duties of Investment Advisers Under State Common Law

"In 2018 the SEC published a draft of its interpretation of the fiduciary duties of investment advisers.... The SEC's draft could lead investment advisers to believe their conduct is 'o.k.' -- when in fact litigation (and arbitration) occurs as a result of state common law fiduciary claims -- and only very rarely under the Advisers Act itself ... [This article describes] the fiduciary duties of investment advisers, as discerned from both the SEC's proposed rule, but as augmented with state common law understandings of the fiduciary standard of conduct."
Ron A. Rhoades, JD, CFP


Pension Rights Center Comment Letter to EBSA on Proposed Exemption Involving Retirement Clearinghouse, LLC (PDF)

"To better inform and protect participants we recommend that the conditions of the proposed exemption be more specific in several areas.... [A]ccount holders should be fully informed of their rights to place their accounts with another IRA provider or to cash out on demand ... [C]onsider imposing limits on some of the fees, particularly the monthly administration fee and the transfer and communication fees to be assessed after RCH identifies a new employer.... [I]nclude a statement that participant records must be maintained until the accounts are distributed ... [R]equire an appeals procedure for mistakes or disputes."
Pension Rights Center

Benefits in General

The State of Employee Benefits: Findings From the 2018 Health and Workplace Benefits Survey

"Despite a tight labor market, fewer employees report that their employers are offering benefits: Health insurance remains the most frequently offered at 78 percent, followed by dental insurance at 68 percent and retirement savings plans at 67 percent.... [F]ewer workers received benefits from their employers in 2018 compared to 2017.... The percentage of employees accessing voluntary benefits is only 12 percent. Of that, 61 percent say they do so because it is less expensive to buy it through their employer than on their own -- more than the 51 percent who cited this reason in 2017."
Employee Benefit Research Institute [EBRI]

ERISA Litigation Defendants Take Note: Burdens of Proof Are Becoming More Weighty

"Many parties to ERISA litigation and arbitration pay lip service to the burden of proof, put on their respective cases and leave it to the trier of fact to decide which side deserves the victory. Burdens of proof have become increasingly important, however, as procedural and substantive issues become more complex, and judges often have less time to deal with the subtleties in ERISA litigation.... Emphasizing burdens of proof can mean the difference between winning or losing, and potentially millions of dollars in damages."
Seyfarth Shaw LLP

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

IRS Issues Interim Guidance on the New Excise Tax on Executive Compensation for Tax-Exempt Employers

"If the tax applies, who pays it? ... Which tax-exempt employers are affected? ... Who is a covered employee? ... What types of payments trigger the excise tax? ... What is a 'taxable year' for purposes of the tax? ... How do you report and pay the excise tax? ... Is there room for interpretation as to how code section 4960 applies?"
Drinker Biddle

Selected Discussions
on the BenefitsLink Message Boards

Inactive Members of LLC in ADP Test

LLC taxed as Partnership, has 2 owners in active management. The 3rd owner is not active and not deferring. I want to include him in testing because his zero will help. Is it correct to include him in testing?
BenefitsLink Message Boards

Safe Harbor Match, Employees Excluded from Match Only

Can a 403(b) plan allow a certain class of employees to defer, but exclude them from the safe harbor match?
BenefitsLink Message Boards

S Corp Dividend Payment to ESOP: Allocate to Which Year?

S-corp is paying a dividend payment to the ESOP. For tax purposes, the S-corp is apparently considering this dividend as 2018. But it's being contributed to the ESOP within a few days. Is this considered an ESOP contribution for 2018, or 2019, or can they choose either?
BenefitsLink Message Boards

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David Rhett Baker, J.D., Editor and Publisher
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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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