Retirement Plans Newsletter

January 16, 2019 logo logo
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Enrolled Actuary
Cash Balance Actuaries, LLC

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Webcasts, Conferences

Life of an ERISA Claim: Know the Basics and the Pitfalls
Ogletree Deakins

Employment and Employee Benefits Forum: Strategic Planning in the Face of Disruption
January 29, 2019 in CA
McDermott Will & Emery LLP

Employment and Employee Benefits Forum: Strategic Planning in the Face of Disruption
January 31, 2019 in CA
McDermott Will & Emery LLP

Employee Benefit Mistakes You Will Make This Year (If You Are Not Prepared)
February 7, 2019 in AL
Ogletree Deakins

Advanced Trustees and Administrators Institute
February 18, 2019 in FL
International Foundation of Employee Benefit Plans [IFEBP]

ESOP Valuation Basics
February 26, 2019 WEBCAST
National Center for Employee Ownership [NCEO]

Trading Compliance: Best Execution, Soft Dollars and Directed Brokerage
March 5, 2019 WEBCAST
National Regulatory Services [NRS]

Understanding Fiduciary Duties and a Sweep of Anti-Fraud Provisions of the Advisers Act
March 7, 2019 WEBCAST
National Regulatory Services [NRS]

Pension Plan Investments 2019: Current Perspectives
May 7, 2019 WEBCAST
Practising Law Institute

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[Official Guidance]

Text of PBGC Interest Rate Update for Benefits Payable in Terminated Single-Employer Plans, February 2019

"The February 2019 interest assumptions under the benefit payments regulation will be 1.25 percent for the period during which a benefit is in pay status and 4.00 percent during any years preceding the benefit's placement in pay status. In comparison with the interest assumptions in effect for January 2019, these assumptions represent a decrease of 0.25% in the immediate rate and are otherwise unchanged."
Pension Benefit Guaranty Corporation [PBGC]


ASC's CE Webcast Series: Part 2

Sponsored by ASC

Discover the unique aspects of the 401(k) plans which are imperative to retirement plan practitioners. Part 2 includes limitations on contributions, compensation definitions, determining "highly compensated employees" and much more. Register Now!

IRS Increases User Fees for Requests for Determination on Qualified Plan Termination

"[E]ffective July 1, 2019, the user fee to submit an Application for Determination for a Terminating Plan (IRS Form 5310) will be increased from $2,300 to $3,000.... [T]he user fee to submit a request for a determination letter for an individually designed plan remains at $2,500; and the user fee for regular submissions, under the Voluntary Correction Program (VCP) under [EPCRS], remains the same ($1,500 for plans with assets of $500,000 or less, $3,000 for plans with total assets in excess of $500,000 to $10,000,000, and $3,500 for plans with assets of over $10,000,000)."
Ice Miller LLP

Not All 457(b) Plans Are the Same

"The differences between a tax-exempt 457(b) plan and a governmental 457(b) plan include: [1] Eligible employees ... [2] Automatic enrollment ... [3] Roth contributions ... [4] Catch-up contributions ... [5] Correction of excess deferrals ... [6] Loans ... [7] Contributions to a trust ... [8] Rollovers ... [9] Taxation ... [10] Statutory period for correction of plan failures ... [11] Correction programs."

Making Your Benefit Plan Audit Easier

"Your auditors will want to see support for any items selected for testing.... [Y]ou will need to keep all of your payroll and benefit plan files on hand until the audit has been completed.... To prevent errors or misstatement, find ways to automate or at least simplify your process.... You can also simplify the calculation of employer contributions to prevent errors."
Schneider Downs

Cybersecurity: Don't Become a Different Kind of Victim

"A former broker at a national brokerage firm was recently sanctioned by FINRA after accepting instructions to transfer assets out of a client account.... The instructions were actually sent by an imposter who had obtained access to the client's account, presumably through some form of cyber-crime. Unfortunately, the broker unwittingly contributed to the imposter's malfeasance by not only accepting the instructions but by also taking pro-active steps to circumvent his brokerage firm's controls."
Winstead PC


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Mapping Your Route to Pension Plan Termination Readiness

"[1] Gather background data and assess current status.... [2] Reach decisions on strategic objectives in a compressed timeframe.... [3] Build consensus among the many stakeholders.... [4] Outline key communications priorities.... [5] Create, implement, and monitor your multi-year strategic plan."

Retirement Industry Associations in Alignment on 401(k) Auto Portability

"Representing a broad cross-section of stakeholders in America's retirement system, many of these organizations offered strong, unequivocal support for auto portability, including some important suggestions for improvements.... As an exception, the joint comments supplied by the Consumer Federation of America and the National Employment Law Project were more-skeptical, suggesting that the DOL consider more restrictions and 'guardrails.' "
401K Specialist

Modernizing Social Security: Minimum Benefits

"Social Security's minimum benefit for retirees with very low career earnings does not prevent poverty and is withering away due to a design flaw. A broad consensus exists for enhancing this benefit to at least keep full-time, full-career workers out of poverty. Reform proposals, though, do differ over the extent to which part-time workers and those with shorter careers should also be eligible for a minimum benefit. Overall, any improved minimum benefit would reduce retiree poverty, and its cost could be offset by reducing benefits somewhat for higher earners."
Center for Retirement Research at Boston College

Benefits in General

[Official Guidance]

Text of DOL Annual Adjustments to Civil Penalties for 2019 (PDF)

"This final rule sets forth the Department's 2019 annual adjustments for inflation to its civil monetary penalties, effective [on the date published in the Federal Register]." Penalties under various ERISA provisions begin on page 31; FMLA penalties are on page 34. This pre-publication version is being made available by DOL. It will be published in the Federal Register when normal government operations resume.
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

Executive Compensation
and Nonqualified Plans

Rapid Collapse of Utility Underscores Need to Manage Risk

"In a regulatory filing, PG&E disclosed it will file for Chapter 11 bankruptcy protection. Three of its retirement plans -- the Supplemental Retirement Savings Plan (SRSP), Supplemental Executive Retirement Plan (SERP), and Defined Contribution Executive Supplemental Retirement Plan (DC-ESRP) -- are likely to experience substantial losses and may be worthless, as participants in these plans acquire status as General Unsecured Creditors (GUC).... Over the last three months, PG&E stock has lost more than 80% of its value, causing the company's valuation to crater to $2.8 billion from a peak of more than $36 billion in 2017.... Not a single analyst or market expert predicted such a precipitous decline."

2019 Deadlines Approach to Furnish Incentive Stock Option and Employee Stock Purchase Plan Information Statements and Returns

"In addition to the employee information statements, corporations must file returns with the [IRS] on Forms 3921 and 3922 no later than February 28, 2019, if filed on paper, or April 1, 2019, if filed electronically. These information returns, Form 3921 for ISO exercises and Form 3922 for initial ESPP share transfers, must be filed electronically by any corporation required to file 250 or more of a particular return and may otherwise be filed either electronically or in paper form."
DLA Piper

Selected Discussions
on the BenefitsLink Message Boards

Fees for Locating Missing Participants

It remains unclear how much effort a single-employer individual-account retirement plan's administrator must put into finding another address for a participant if the administrator receives information suggesting that the participant no longer is at the address the participant furnished (and perhaps neglected to update). Administrators have expressed concerns that some EBSA examiners suggest unreasonable efforts. Some of the tension results because not all of an employer/administrator's cost is visible as an expense. Of those service providers that offer ERISA Section 3(16) services, do any of them offer the service of finding better addresses on 'missing' participants? Does that service have a distinct fee, or is it embedded in an overall fee? If there is a distinct fee, is it charged against the account of the to-be-located participant?
BenefitsLink Message Boards

RMD Needed Despite QDRO Awarding 100% of Account Balance?

I have an owner who turned 70-1/2 in 2018 and also got a divorce in 2018. The QDRO was not received in our office until 2019. The QDRO has the division date for the accounts on 3/31/2018. The alternate payee will be receiving 100% of the participant's account balance. The participant took his RMD for 2018 by December 31, 2018. Does he need to take a 2019 RMD or is his account balance equal to $0 on 12/31/2018 because the alternate payee is entitled to100% of his account balance? The alternate payee is not 70-1/2.
BenefitsLink Message Boards

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Press Releases

Welcome to Our New Partner Jason S. Luter
Drinker Biddle & Reath LLP

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What to Do if You Missed Your RMD
Morningstar Advisor

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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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