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Howard & Howard
in CA, IL, MI, NV

Enrolled Actuary
TPA specializing in small plans
in CA

Senior Pension Administrator
Yang's Pension Consulting
in CA

Retirement Plan Administrator (F/T)
Tycor Benefit Administrators, Inc.
in PA

Compliance Analyst -- QKA
Newport Group
in AL, CA, FL, IL, MD, NC, Telecommute

Compliance Analyst
in CA

Pension Enrolled Actuary
Consulting Actuaries Incorporated
in NJ, Telecommute

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[Official Guidance]

Text of 2018 IRS Publication 590-B: Distributions from IRAs (PDF)

63 pages. "What's New: [1] No recharacterizations of conversions made in 2018 or later.... [2] No miscellaneous itemized deductions allowed.... [3] 2018 Form 1040 redesigned.... References to Form 1040 and its related schedules have been revised accordingly in this publication. [4] Form 1040A and Form 1040-EZ no longer available."
Internal Revenue Service [IRS]


PBI reinvents Death Audit category with launch of CertiDeath

Sponsored by Pension Benefit Information, Inc.

CertiDeath™ eliminates the work, complexity, and uncertainty now associated with identifying deaths, saving companies loads of time spent reviewing obituaries and money lost due to missed or misclassified deaths.

[Guidance Overview]

We're in a New York State of Distributions

"The first $20,000 of a taxpayer's taxable retirement income in each year is exempt from New York State and City income taxation.... [A] New Yorker who takes a $20,000 distribution annually after reaching age 59 1/2 saves as much as $2,500 annually in otherwise eventually payable New York taxes. Note that this is not a deferral but rather complete tax-exemption on these amounts."
Thomson Reuters Practical Law

Judge Rejects Claims That American Century 401(k) Plan Fiduciaries Violated ERISA

"The plaintiffs ... claimed plan managers improperly favored proprietary investments, mismanaged the plan lineup and 'imprudently' monitored fees ... 'Plaintiffs ... failed to establish a single instance in which the (investment) committee members placed American Century's interest over those of plan participants,' [the judge] wrote. 'It is not disloyal as a matter of law to offer only proprietary funds.' " [Wildman v. American Century Services, LLC, No. 16-737 (W.D. Mo. Jan. 23, 2019)]
Pensions & Investments

Roth 401(k)s Are an Essential Employee Benefit

"Adding this option to your plan allows participants to save into two accounts with different tax benefits. Plan sponsors should be aware that most participants won't realize the benefits of Roth 401(k) on their own. Like any investment option, sponsors should educate participants about how the feature works, how it impacts their saving and planning, and how to decide between a Roth 401(k) and a traditional 401(k)."

'Compensation' for Sole Proprietors, Partners, and LLC Members -- It's Complicated

"Instead of the appropriate variation of taxable wages, 'Earned Income' is the basis for retirement plan allocations for sole proprietors, partners, and LLC members. It can be the Internal Revenue Code version of a Rubik's Cube."
The Retirement Plan Blog


Join the Pension Rights Center's no-fee lawyer referral service!

Sponsored by Pension Rights Center

Are you an experienced attorney who can handle issues involving private or government retirement plans? Join our no-fee National Pension Lawyers Network! There is no obligation to take any case we refer to you. Join our network!

'Outdated' Mortality Tables a Growing Source of Litigation Exposure for DB Plans

"Four lawsuits filed in federal district courts against large corporate pension plans late in 2018 alleged that this practice has caused participants and survivor annuitants to receive lower payments than required under [ERISA]. The similarities among the suits, filed by the same two law firms, suggest that additional lawsuits against other large pension plan sponsors may soon follow[.]"
HR Daily Advisor

PBGC Finalizes Mediation Program and Expands It to Cover Fiduciary Breach Cases

"The PBGC has engaged the Federal Mediation and Conciliation Service to serve as intermediaries in the dispute resolution processes. Under the program, the PBGC and plan sponsors share the cost of the mediation sessions to avoid the appearance that either side is favored."
Thomson Reuters Practical Law

U.S. Pension Insurer Slams Lampert Bid for Sears

"The planned sale of Sears Holdings Corp.... is under fire from the [PBGC] over a $1.7 billion funding gap that the agency says should sink his efforts to buy out the chain.... [The agency] said on Jan. 18 it would assume responsibility for a pair of Sears defined-benefit pension plans, which cover 90,000 people and are 64% funded.... [PBGC] is the largest single unsecured creditor of Sears.... The PBGC anticipated years ago that Sears could file for bankruptcy and stick the agency with a big bill. To protect itself, the PBGC obtained an interest in the company's Kenmore and DieHard trademarks."
The Wall Street Journal; subscription may be required

Plan Design and 2018 Market Performance

"This 2018 market performance brings into relief the risks inherent in traditional cash balance plan [TCB] finance. Prior to 2018, there were nine straight years of positive S&P 500 performance. Over that same period interest rates trended steadily down. The result was positive performance for TCB and negative performance for [traditional defined benefit plans]. In 2018, those results reversed."
October Three Consulting

What's Your Risk Capacity -- and How to Use It to Help Build Your Retirement Portfolio

"Start with this question: Will you still be able to meet your investment objectives if your investment portfolio falls in the short term? In other words, how much can you afford to lose, and how long can you afford to wait for your investments to potentially recover? ... If you have a long time horizon, and can weather ups and downs without selling out of the markets, time generally works to your advantage. The shorter your time horizon, the more damaging volatility can be."
Charles Schwab

Does It Make Sense to Max Out Your 401(k) Plan Early in the Year?

"When contributions are front-loaded so that they occur early in the year, less 401(k) match may be received.... 401(k) participants that utilize lump sum contributions or front-load contributions early in the year can also expose themselves to higher levels of volatility."

Can ESOPs Benefit Disadvantaged Communities?

"Real estate investment businesses in these Opportunity Zones could create ESOPs as part of their employees' retirement plans, giving employees in the areas an ownership interest in those property investments. Businesses already existing in Opportunity Zones could be encouraged to create ESOPs that would benefit employees through the growth of the company that could increase capital investment in those businesses.... Qualified Opportunity Zone laws should be amended to allow for a broader range of ESOP conversions to be financed within the Opportunity Zones."
Butterfield Schechter LLP


Why a Federal Taxpayer Bailout for Union Pensions Is a Bad Idea

"The loan approach is based on the idea that if the plans get a low-interest loan from the government, and then invest the proceeds in risky assets and target a high return, the loan can be repaid in full.... In fact, the proposal now in Congress is similar to disastrous pension obligation bond issues under which state and local governments went on to sell bonds to the public and put the proceeds at risk in investments that they hoped would earn high returns."
Joshua Rauh, in the Washington Times

Benefits in General

[Guidance Overview]

Editor's Pick Tax Cuts and Jobs Act: A Comparison for Businesses

"The Tax Cuts and Jobs Act (TCJA) changed deductions, depreciation, expensing, tax credits and other tax items that affect businesses. This side-by-side comparison can help businesses understand the changes and plan accordingly."
Internal Revenue Service [IRS]

Agencies Release Advance Informational Copies of 2018 Form 5500

"The instructions have been updated to reflect that the new maximum penalty for a plan administrator who fails or refuses to file a complete or accurate Form 5500 report has been increased to up to $2,140 a day for penalties assessed after January 2, 2018, whose associated violations occurred after November 2, 2015."
United Benefit Advisors

2018 Benefits Strategy and Benchmarking Survey -- Wholesale Industry Addendum (PDF)

"Faced with industry consolidation, slim margins and often, a small HR staff, wholesale employers are challenged with balancing the need to control compensation and benefit costs with the ability to attract and retain a high-performing workforce. As a result, employers in the sector may benefit from exploring innovative cost-containment tactics that do not have a negative impact on employee wellbeing. This benchmarking report explores these key issues, trends in the industry and potential solutions."

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

Code Section 162(m) Grandfathering Rule Under TCJA

"Many practitioners are applying the Treasury's 162(m) guidance in ways that unnecessarily narrow the scope of the grandfathering protection and therefore could lead to unnecessary tax charges."
Ivins, Phillips & Barker

How Would Your Company Respond to a CEO Pay Ratio-Related Shareholder Proposal?

"Each company that received the proposal [from the New York State Common Retirement Fund (NYSCRF)] during 2018 took a different approach to their settlement and disclosure that reflect the diverse viewpoints over how workforce compensation fits in to the executive pay setting process. [The authors provide] examples of how companies have responded[.]"
Willis Towers Watson

Selected Discussions
on the BenefitsLink Message Boards

Hardship Withdrawal Request Needed for Roth Deferrals?

I had a client call me with a participant wanting a hardship withdrawal. All of his money is in Roth deferrals. Does he need to request a hardship, or can he just take his Roth out? He hasn't been in the plan 5 years, however -- only 3. He's only 32 and the in-service distribution is available only at age 59 1/2. He does have a true hardship. I'm not sure of hardship rules as they apply to Roth.
BenefitsLink Message Boards

Fully Vested Match Deemed to be a QMAC?

If a plan has a per-payroll fully vested match subject to deferral withdrawal restrictions, is the match deemed to be a QMAC?
BenefitsLink Message Boards

Leaving MEP to Start Own Plan: Effective Date?

We have a new client who was part of a MEP as of 6/1/16 and has decided to terminate participation in the MEP and wants to start its own plan this year. We have conflicting thoughts in our office as to what would be the effective date of the new plan. I say this is a new plan and its effective date should be 2019. My reasoning for a 2019 date: this is the first time the employer has sponsored its own plan. Others are saying the effective date of the plan should be the date the employer entered the MEP as a participating employer.
BenefitsLink Message Boards

401(k) Plan Terminating; Starting a Replacement SIMPLE IRA

An employer wants to terminate his 401k plan in 2019 and start a SIMPLE IRA plan at the beginning of 2020. Can the employee 401k accounts be rolled immediately into the SIMPLE IRA or is there a 2 year wait? If a 2 year wait, then if the owner and/or participants wanted to have their 401k money in the SIMPLE IRA, could they park the money in an IRA, wait two years, then move it to the SIMPLE IRA?
BenefitsLink Message Boards

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Press Releases

New App Displays What Original Medicare Covers
Centers for Medicare & Medicaid Services [CMS]

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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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