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Associate Director of Pension Benefits
Sheet Metal Workers' National Pension Fund
in VA

Employee Benefits Associate
Shipman & Goodwin LLP
in CT

Retirement Plan Services Supervisor
Alerus Financial
in MI, NH

Chief Executive Officer/Administrator
Southern CA UFCW and Food Employers Joint Benefit Funds
in CA

Retirement Plan Administrator
Equity Trust Company
in OH

Defined Benefits Administrator
Primark Benefits
in CA, Telecommute

Defined Contribution Plan Administrator
Southern California TPA Firm
in CA, Telecommute

Vice President, Business Development - Retirement Sales
in IL, Telecommute

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[Guidance Overview]

Puerto Rico Tax Reform Changes Employee Benefit Provisions

"Act No. 257 of December 10, 2018 amended the Puerto Rico Internal Revenue Code of 2011 ... to simplify our tax system, stimulate economic growth, and promote voluntary compliance with tax laws. Although the Financial Oversight and Management Board for Puerto Rico has expressed reservations with respect to certain portions of the Act, in general, it became effective on December 10, 2018.... This Alert provides a general description of the most important aspects of the Act in the Employee Benefits Area[.]"
McConnell Valdes

Editor's Pick 2019 Hot Topics in Retirement and Financial Wellbeing

32 pages. "[1] Financial wellbeing programs will continue to expand.... [2] Employers are focused on having participants keep their money in the defined contribution plan.... [3] Most employers are vigilantly trying to locate missing participants."

Longterm Disability, 'Un-Retirement' and Pension Plans

"It can take time to resolve an employee's claim for long-term disability benefits, especially in complicated cases.... An eligible employee may take an early pension without regard to disability.... [But] the employee can be substantially penalized for taking an early pension to pay bills when there's a delay in processing a long-term disability claim.... One possible solution is for the employee to try to 'un-retire' -- to retroactively cancel the pension."
Bob Blum Mediation, via Los Angeles & San Francisco Daily Journal

Retirement Choices by State and Local Public Sector Employees: The Role of Eligibility and Financial Incentives

"[This study models] the probability of retirement as a function of pension wealth at early and normal retirement eligibility and Social Security coverage in the public sector job.... [B]ecoming eligible for early retirement, or receiving an early-out offer, significantly increases the probability of retiring.... These findings suggest that state legislative action to affect retirement decisions and reduce future pension costs may be most effective operating through plan eligibility rules and early-out incentives."
National Bureau of Economic Research [NBER]; purchase required for full document


American Benefits Council Comment Letter to IRS on Proposed Regs for Hardship Distributions

"The most critical issue raised by the proposed regulation that we ask the IRS to address as soon as possible is the need for confirmation that taxpayers may rely on the proposed regulation until a final regulation is published, and that any changes made in the final regulations that are more restrictive than the proposal will be applied prospectively only."
American Benefits Council


Public Pension Fund Crisis Has a Start Date

"A simple extrapolation of the lines suggests a crisis around 2023, when pension fund assets are wiped out. That's an extrapolation, not a prediction. Market returns and political actions could move the date a few years in either direction. Moreover, action will be forced before assets go to zero. We don't know when or how or what will happen, but it won't depend on average investment returns over the next few decades."

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

Reminder: Employers Must Report 2018 ISO and ESPP Transactions

"Corporations that offer incentive stock options (ISOs) or maintain a tax-qualified employee stock purchase plan (ESPP) have an obligation to file returns with the IRS and to deliver information statements to employees and former employees regarding the acquisition of shares under such arrangements.... These forms are due regardless of any partial shutdown of the Federal government."
Latham & Watkins

[Guidance Overview]

What You Need to Know About the New Tax on 'Excess' Nonprofit Compensation

"[1] Compensation that is 'reasonable' under other federal tax rules can still be taxed as 'excess' compensation.... [2] To know whether it might pay compensation that triggers the tax, a nonprofit ... must keep track of its 'related' entities and any compensation paid by those entities to shared employees.... [3] 'Remuneration' counts once there is no substantial risk of forfeiture.... [4] Each common-law employer, whether it is the nonprofit or a related entity, must pay its share of the tax based on its proportional share of remuneration paid to a covered employee."
Caplin & Drysdale

[Guidance Overview]

IRS Provides Interim Guidance Regarding the New Excess Compensation Excise Tax Applicable to Tax-Exempt Organizations

"[T]he IRS narrowly construed many of the statutory provisions, which ultimately will result in additional administrative burden and cost to tax-exempt organizations subject to the rules. In particular, large, multiple-entity tax-exempt organizations (e.g., hospital or university systems) will need to be careful in determining which employees are subject to the excise tax, how much compensation is paid to each such employee, and which employers throughout the system will be liable for the tax."
Seyfarth Shaw LLP

Selected Discussions
on the BenefitsLink Message Boards

Gateway to Otherwise Excludable Employees?

I have a plan that has 3 month wait, entry is date of event. Cross-tested 3% SH plan. Do I have to give the otherwise excludable folks the gateway if I am testing them separately? GW will be 5%.
BenefitsLink Message Boards

Exclude One LLC Partner from Permitted Disparity?

I've got an LLC with 4 partners, all active, and 3 rank and file employees. HCEs are excluded from Safe Harbor. Using permitted disparity because all rank and file are older than 2 of the partners. The oldest partner is retiring, and doesn't want to fund anything for himself. The other 3 partners all want to do the maximum. Is there a way to accommodate this, or is it an all or nothing situation?
BenefitsLink Message Boards

Include Individual in Cross-Testing if Participant Status Is Only Due to Incoming Rollover?

A profit sharing plan accepts rollovers on behalf of employees who haven't met the plan's eligibility requirements. I suppose such employees would technically be considered participants and included in the participant count for Form 5500 purposes. Would they be included in the annual testing before they meet the eligibility requirements?
BenefitsLink Message Boards

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Press Releases

Most Popular Items in the Previous Issue

Boosting the Effectiveness of Retirement Plan Communications (PDF)
Great-West Financial and Empower Retirement

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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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