Retirement Plans Newsletter

January 15, 2019 logo logo
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Webcasts, Conferences

Most Common Compliance Pitfalls Within Employer-Sponsored Retirement Plans
January 16, 2019 WEBCAST
Clear Law Institute

Retirement Insights & Answers
February 19, 2019 WEBCAST
National Center for Employee Ownership [NCEO]

Establishing and Amending IRAs
March 7, 2019 WEBCAST

►See 158 Upcoming Webcasts and Conferences

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The Do's and Don'ts of Your 401(k) Fund Lineup

"Develop a standalone menu of funds, which allows you to give participants the opportunity to develop a properly diversified portfolio on their own.... Remember that too many options can be confusing for participants and actually cause them to make poor decisions or no decision at all.... When designing the menu, make sure that decisions are made for the group collectively, not just the Committee members.... Be sure to review your fund lineup regularly. It doesn't make sense to make changes for the sake of making changes."
Conrad Siegel Actuaries


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Recent Market Volatility Has Revealed This About Target Date Funds

"[W]hile all the major indices were down double-digits in the fourth quarter, Morningstar reports the average losses for all categories of target date funds remained in single digits. For the year, target date funds performed comparable to the broader markets. Of course, longer term target date funds lost more as they held lower percentages of fixed income assets to help mitigate the decline in equities."
Fiduciary News

Evaluating Your Financial Advisor

"This year's evaluation might be a bit different from most because of the significant volatility we experienced in the markets.... Learn exactly what you are paying ... Discuss fee transparency ... Understand your investment costs ... Determine whether your advisor is a fiduciary ... Get a list of the services you should be receiving ... Check your advisor's background ... Make sure you are getting leading-edge advice ... Confirm that your advisor has no conflicts of interest ... Check the marketplace[.]"
Lawton Retirement Plan Consultants

Second Circuit Affirms Lower Court Ruling in Challenge to Xerox Pension Plan Calculations (PDF)

19 pages. "The District Court's selection of the new hire remedy falls within the 'range of permissible decisions available under an abuse of discretion standard.'... [We] affirm the District Court's decision to use the new hire approach as an equitable remedy to redress the Plan Administrator's notice violations.... We affirm the District Court's decision to use the prime rate for [the award of prejudgment interest]." [Frommert v. Conkright, Nos. 17-114, 17-738 (2d Cir. Jan. 14, 2019)]
U.S. Court of Appeals for the Second Circuit

Editor's Pick Pension Derisking: Start with the End in Mind (PDF)

12 pages. "Recognizing that all plans are different, the formulation of each plan's glide path should begin by determining the funding-level objective at which the plan sponsor wishes to minimize volatility of funding status. Once that level of funding is identified and a matching end-state asset portfolio has been designed, a gradual path based on funding level and asset allocation can be mapped."


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What to Do if You Missed Your RMD

"There is no effect on the prior year other than you have a potential 50% penalty.... [As] soon as you discover it, you should figure out the amount you were short or whatever the RMD that was missed, and take the makeup distribution immediately. Then, of course, take you regular distribution for the year so you stay on track. And then you report that on ... Form 5329.... [Y]ou must attach a statement saying two things: number one, that I made up the shortfall, you have to show good faith that whatever I missed, I took immediately upon discovery. Then give a short explanation of why, and IRS waives the penalty in almost every case."
Morningstar Advisor

Restoring Lawsuit Winnings to an IRA

"An IRA owner sometimes has a claim against an investment advisor or a company for losses in connection with products or services provided to the IRA.... In the context of qualified plans, a recovery on a claim like this is allowed to be paid into the plan as a 'restorative payment' ... and as such the IRS does not consider it a contribution to the plan. Therefore, it is not subject to the rules and limits applicable to plan contributions. The IRS similarly has allowed IRA owners to contribute this type of recovery to their IRAs."
Morningstar Advisor

Considerations Before Maxing Out Your 401(k)

"Get an employer match.... Pay down high interest debt.... Create an emergency fund.... Avoid high-cost 401(k) plans.... Balance other savings goals.... Consider the tax savings."
U.S. News & World Report


SPARK Comment Letter to IRS on Proposed Hardship Distribution Regs (PDF)

11 pages. "By its terms, the Substantiation Memo only refers to the existing safe-harbor events. The IRS should expressly clarify that the substantiation guidelines described in the Substantiation Memo will cover the new safe-harbor event for expenses incurred as a result of federally-declared disasters and ensure that the Internal Revenue Manual is updated accordingly. This update should set forth what information and notifications the IRS would expect a plan administrator to collect and provide to substantiate the new seventh safe-harbor hardship event for expenses related to federally-declared disasters."
The SPARK Institute

Benefits in General

Long-Awaited Employee Benefit Plan Audit Standard Final Balloted

"Changes to the form and content of the auditor's report on the financial statements and the ERISA required supplemental schedules are among the most significant changes resulting from the new standard.... Auditors are required to perform procedures sufficient to ensure that amounts received and disbursed as reported by the trustee or custodian were determined in accordance plan provisions.... Auditors are required to read the draft Form 5500 and identify material inconsistencies, if any, with the audited financial statements prior to dating the auditor's report."
Schneider Downs

Selected Discussions
on the BenefitsLink Message Boards

Form 8950: Instructions Show Revision But Not Form

Looking at filing Form 8950 for a client. The instructions are revised January 2019 but on the IRS website the Form 8950 itself is has a revised date of November 2017. Any ideas?
BenefitsLink Message Boards

Appeal Rights for Participant Who Was Denied Information on QDRO Alternate Payee's Pay Status

Employee/participant has a QDRO designating that his ex-wife is to receive ALL of his benefits under the 401(k) Plan. Employee wants plan administrator to attest in writing that his ex-wife has started to receive the benefits. The plan administrator is refusing. In denying the employee's request, is the plan administrator obligated to provide the standard ERISA claims procedure rights (appeal process, etc)?
BenefitsLink Message Boards

Fidelity Bonding of Multiple Trustees

We all know that trustees should be bonded for at least 10% of plan assets. Is that each, or total? Let's say there are three trustees and the plan has $100,000 of investments. Does each participant need a bond of $100,000 or does each get a bond for $33,333?
BenefitsLink Message Boards

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Press Releases

Lestna Retirement LLC is Certified for Fiduciary Excellence
Centre for Fiduciary Excellence [CEFEX]

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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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