Retirement Plans Newsletter

February 1, 2019

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Webcasts, Conferences

DOL's Terminated Vested Participant Project
February 21, 2019 in NY
Worldwide Employee Benefits Network [WEB] - New York Chapter

Employee Benefits Spring Update 2019
April 3, 2019 in DC
American Bar Association Joint Committee on Employee Benefits [JCEB]

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Relief for 403(b) Plans That Wrongly Excluded Part-Time Workers

"Employers that do not allow part-time employees to make elective deferrals to the 403(b) plan should carefully consider [IRS Notice 2018-95] and determine whether they need to change their administrative procedures or plan documents. Under the transition relief, 403(b) plans may need to operationalize this new guidance as early as January 1, 2019."
Willis Towers Watson

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Public Pensions Pour More Money Into Private Equity

"Private equity mandates accounted for 27 percent of new allocations made by U.S. and U.K. pension funds in 2018, an uptick from 25 percent last year ... On an absolute basis, mandates awarded to private equity firms increased dramatically year-over-year, from a total of 580 commitments in 2017 to 954 allocations last year."
Institutional Investor

Online VCP Filing System Up and Running

"[T]he most recent update, set forth in Revenue Procedure 2018-52, mandates online filing of VCP submissions starting April 1, 2019. The IRS opened the online filing system for voluntary use starting January 1 of this year. Paper filing is optional through March 31, 2019. This post reports on first experiences with the online filing system."
E is for ERISA

IRS Publication 5329: TE/GE Fiscal Year 2018 Accomplishments Letter (PDF)

"TE/GE delivered a compliance platform that was divided into six portfolio programs: Compliance Strategies; Data-Driven Approaches; Referrals, Claims, and Other Casework; Compliance Contacts; Determinations; and Voluntary Compliance and Other Technical Programs. Data was used to identify and address existing and emerging high-risk areas of noncompliance, and steered the decisions on how best to apply optimal resources."
Internal Revenue Service [IRS]

This Is How Clueless Most Americans Are About Their 401(k)s

"[T]he complex nature of 401(k) accounts are a much bigger barrier to saving for retirement than financial experts realize.... Questions about tax rules, 401(k) basics and financial terminology account for about 63% of the questions [DreamForward received]. They were things like: How much money do I need to save to get a match? How does my money get from my paycheck into this account? How does the 401(k) impact my taxes?"
MarketWatch

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As Wall Street Spasmed with Fear, 401(k) Savers Held Steady

"While professional traders on Wall Street scrambled to sell stocks amid a fear-fueled, nearly 20 percent drop for the S&P 500 late last year, most people at home remained relatively calm when it came to their own retirement savings.... Investors held the steadfast approach even as the average 401(k) balance dropped to $95,600 by the end of the year, down 10 percent from three months earlier."
St. Louis Post-Dispatch

Second Circuit Overrules District Court Dismissal of Stock-Drop Case

"In a significant departure from the stock drop case rulings coming out of other courts, including other U.S. Courts of Appeals, the U.S. Court of Appeals for the Second Circuit overturned a district court's dismissal of a claim for breach of ERISA fiduciary duties brought by a participant whose accounts in IBM's 401(k) plan were invested in an IBM stock fund and suffered losses as a result of a decline in the market price of IBM shares. Prior to this Second Circuit ruling, plaintiffs in other stock drop cases have struggled to defeat plan defendants' motions to dismiss." [Jander v. Ret. Plans Comm. of IBM, No. 17-3518 (2d Cir. Dec. 10, 2018)]
Hodgson Russ LLP

The Bucket Approach to Retirement Allocation

"Whereas some retirees have stuck with an income-centric approach but have been forced into ever-riskier securities, the Bucket concept is anchored on the basic premise that assets needed to fund near-term living expenses ought to remain in cash, dinky yields and all. Assets that won't be needed for several years or more can be parked in a diversified pool of long-term holdings, with the cash buffer providing the peace of mind to ride out periodic downturns in the long-term portfolio."
Christine Benz, in Morningstar Advisor

FAS87 ASC715 Discount Rates and Moody's Rates, Updated January 31, 2019

An unofficial monthly report as of January 31, 2019, of the Moody's Daily Long-term Corporate Bond Yield Averages and Moody's Daily Treasury Yield Averages (used as benchmarks by some corporate pension plans).
David Rigby, via BenefitsLink Message Boards

Repealing the Michigan Tax on Pensions Might Be Tough

"[The Michigan] Treasury Department is saying repeal of the tax on pensions, which took effect in 2012, would cost the state $320 million a year.... The 2011 legislation pushed by former Gov. Rick Snyder didn't create a new tax, but it removed total and partial tax exemptions for income from public and private pensions, respectively."
Detroit Free Press

Benefits in General

DOL Issues 2019 Adjusted Penalty Amounts

"The maximum penalty for failing to file Form 5500 (which must be filed annually for most ERISA plans) increases from $2,140 to $2,194 per day that the filing is late.... The maximum penalty for failing to provide the summary of benefits and coverage (SBC) required under the [ACA] increases from $1,128 to $1,156 per failure.... For plans with automatic contribution arrangements, penalties for failure to provide the required ERISA Section 514(e)preemption notice to participants increase from $1,693 to $1,736 per day."
Thomson Reuters / EBIA

Press Releases

CUNA Retirement Adds to Sales Team
CUNA Mutual Retirement Solutions

Most Popular Items in the Previous Issue

Compensation for MEP Sponsors, Part 1 (PDF)
Fred Reish, Bruce Ashton and Josh Waldbeser, via Plan Consultant

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David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2019 BenefitsLink.com, 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 BenefitsLink.com, 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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