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[Guidance Overview]

Editor's Pick Multiple Employer Retirement Plans: A Petite Primer (PDF)

24 pages. Topics include: [1] Tax Code's Multiple Employer Plan rules: participation, vesting, exclusive benefit rule, Section 415 limitations, employer-by-employer determinations (especially nondiscrimination rules), disqualification of entire plan, funding and deduction rules, Section 413(b) collectively bargained plan rules; [2] Cooperative and Small Employer Charity Plans (CSEC Plans); [3] DOL's different understanding of what constitutes a single 'plan'; [4] Proposed DOL regulation: bona fide group or association of employers, bona fide Professional Employer Organization, working owners; [5] Would the DOL's proposed rule make a difference?
Utz & Lattan, LLC


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IRS Releases Guidance on Tax Reform's Pass-Through Income Provisions

"Of significant concern during the TCJA legislative process was whether new pass-through income taxation rules might create a disincentive for those who receive such income to establish -- or continue to maintain -- an employer-sponsored retirement plan.... [U]nder certain circumstances, it can be highly advantageous for a pass-through business owner to establish and contribute to a retirement plan, and thereby qualify for a greater Qualified Business Income Deduction."

You Have a Retirement Plan Committee -- But Do You Have a Committee Charter?

"A committee charter serves to identify the governance process of the committee and the roles and responsibilities of its members. It also provides a formal document for the named fiduciaries of the plan, and other fiduciaries by function (e.g., the Board of Trustees/Directors), to delegate certain fiduciary functions to the committee.... [A] well-drafted committee charter is often an important part of a prudent fiduciary due diligence and risk management process."
Cammack Retirement Group

Target Date Investing: A Different Perspective on Sequence-of-Returns Risk Around Retirement

"For investors with a longer-term focus on longevity risk, the benefits of maintaining a growth-oriented glide path in their accumulation phase could meaningfully outweigh the potential negative impact of a large market decline close to or soon after retirement.... [M]ost investors could have achieved higher asset balances at and into retirement by following higher-equity glide paths, even after experiencing large market declines close to retirement."
T. Rowe Price

Nevada Proposes Sweeping Fiduciary Regulation

"[B]roker-dealers, investment advisers and their respective representatives are 'financial planners' under Nevada law if they advise others for compensation upon the investment of money or upon provision for income to be needed in the future, or if they hold themselves out as qualified to perform either of these functions. As financial planners, they will now be subject to Nevada's statutory fiduciary duty with respect to advice that they provide to Nevada clients."
Stradley Ronon


2019 SPARK National Conference -- June 4-5, National Harbor, MD

Sponsored by SPARK

The retirement services industry's leading event for top marketing, sales, administration and record keeping professionals. Comprehensive agenda is designed to meet the needs of 401(k) Plan Providers, Financial Advisors and Record Keepers.

Editor's Pick U.S. Population Mortality Observations, Updated with 2017 Experience (PDF)

49 pages. "The Society of Actuaries has developed this report to provide insights on the historical levels and emerging trends in U.S. population mortality. The most recently released U.S. population mortality experience from 2017 has been incorporated and added to prior available data to enable analysis of mortality experience over the period 1999-2017." [Also available: Appendices]
Society of Actuaries

Editor's Pick Understanding Actuarial Assumptions (PDF)

"Performing an actuarial valuation is a complex process which involves extensive data requirements and various assumptions. In order to fund pension benefits, several projections about future events are developed based on 'actuarial assumptions.' ... Properly chosen assumptions can help stakeholders understand the plan's financial condition and can help to ensure future sustainability."

2018 Public Pension Funding Study

"As of June 30, 2018, the aggregate funded ratio is estimated to be 72.1%, with plan assets earning slightly more than anticipated by the plans' interest rate assumptions ... Adoption of more conservative assumptions added $73 billion to reported liabilities; plan changes shaved off $14 billion ... The aggregate Total Pension Liability reported at the last fiscal year-ends was $4.93 trillion, growing from $4.72 trillion as of the prior fiscal year-ends. We estimate that the Total Pension Liability has since passed the $5 trillion mark as of June 30, 2018."

Working Longer Policies: Framing the Issues (PDF)

29 pages. "[This paper looks] at the retirement decision through the lens of the life-cycle model plus the insights of behavioral economics. [The authors] then consider trends in labor force participation and ask what has been driving these trends. The subsequent section examines the range of policies that could either encourage people to work longer or encourage employers to hire and retain older workers."
Martin Neal Baily and Benjamin H. Harris, for The Brookings Institution

Proposals to Keep Older People in the Labor Force (PDF)

25 pages. "[This paper] explores three initiatives to help people make better-informed work and retirement decisions: [1] establishing that age 70 is the nation's full retirement age; [2] restating 401(k) balances as flows of retirement income; and [3] instituting workplace seminars for employees in their 50s about the advantages of working longer. [It then] turns to the employer's side with two proposals: [1] reintroducing mandatory retirement ... and [2] undertaking a massive public education campaign to make the business case for older workers."
Alicia H. Munnell and Abigail N. Walters, for The Brookings Institution

PBGC Fiscal Year 2018 Financial Statement Audit Management Letter Report (PDF)

16 pages. "During the FY 2018 audit, [CliftonLarsonAllen LLP (CLA), an independent certified public accounting firm], did not [identify] any new internal control deficiencies of less significant matters to be included in this report.... This year the OIG and CLA will continue working with management to discuss and evaluate the status of four remaining prior years' recommendations."
Office of Inspector General, Pension Benefit Guaranty Corporation [PBGC]

Benefits in General

Financial Wellness Strategy: The Four-Pronged Approach to Get it Right

"More than half of all employees want to make their own financial decisions, but are looking to have someone to help validate that decision.... Evaluate workforce needs ... Provide choice in solutions ... Awareness and education ... Ongoing engagement."

Enhancing Work Incentives for Older Workers: Social Security and Medicare Proposals to Reduce Work Disincentives (PDF)

24 pages. "[The authors consider three proposals:] ... [1] eliminating the earnings test for participants between age 62, the early retirement age (ERA), and the full retirement age (FRA) ... [2] creating a paid-up status for Social Security, a point at which employees and employers would no longer be required to pay the payroll tax and earnings would not alter future benefits.... [3] a paid-up status for Medicare, coupled with a policy shift for Medicare that would return the program to its original status as the primary payer for covered expenditures rather than its current status as the secondary payer."
Robert L. Clark and John B. Shoven, for The Brookings Institution

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

IRS Provides Interim Guidance for Tax-Exempt Organizations Paying Excess Executive Compensation

"Notice 2019-09 creates a vast web of defined terms and potential pitfalls.... The guidance not only will drive the design and implementation of executive employment agreements and deferred compensation plans, but it also will influence the structuring of severance payments and settlement agreements. It also may necessitate changes to management service agreements, payroll systems, and internal controls to better manage and account for executive compensation."
Jackson Lewis P.C.

Selected Discussions
on the BenefitsLink Message Boards

User Fees for DB Funding Waiver

The IRS User Fee Schedule (Appendix A, IRB 2018-1) does not show the user fee for an application to waive minimum funding and the Rev. Proc. refers back to 2004-15 which refers back to 2004-8, which shows a user fees of $2,290 (waiver <$1M) and $5,415 (waiver =>$1M). It doesn't look like any of these rules have been updated. Are these still the fees?
BenefitsLink Message Boards

Old Payroll Records Missing -- Alternate Sources for 'Compensation'?

During an audit of a 401(k) plan, the IRS auditor has informed the plan sponsor that they've used the incorrect definition of compensation in withholding from eligible employees. They are requesting that the sponsor go back to 2002 to make the appropriate corrections. The plan sponsor no longer has the payroll records back to 2002, but does have the compliance testing from their TPA (who is no longer in existence). Can they use the compensation information from these tests in order to perform the calculation, informing the IRS that this is all they have and it's their best estimate as to the amounts due?
BenefitsLink Message Boards

Termination of 401(k) in a Controlled Group

What termination procedure is needed when a 401(k) plan is part of a controlled group? Can it be terminated?
BenefitsLink Message Boards

Notice 2019-09 and FICA Aspects of Tax-Exempt Org's SERP

In thinking about a standard non-qualified SERP plan for a tax-exempt organization (a nonaccount balance plan), would the remuneration under Notice 2019-09 be the same as for FICA purposes? In general, it seems they would be the same.
BenefitsLink Message Boards

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DOL Increases Civil Monetary Penalties for 2019
Thomson Reuters Practical Law

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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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