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February 12, 2019 logo logo
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Non-Qualified Client Service Manager (Vanguard)
Newport Group
in Lake Mary FL / Dallas TX

Product Support Consultant part of Wolters Kluwer Legal & Regulatory
in Madison WI / Telecommute

Marketing Analyst
in Dallas TX

Employee Benefit Assistant (P/T)
Tycor Benefit Administrators, Inc.
in Berwyn PA

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Webcasts, Conferences

Planning for a Patchwork of Best Interest Standards
February 27, 2019 WEBCAST
Eversheds Sutherland

DC Investment Lineup
February 28, 2019 in CA
Pensions & Investments

Annual Legal & Regulatory Update
March 7, 2019 in OH
Worldwide Employee Benefits Network [WEB] - Northeast Ohio Chapter

IRA Distributions
March 26, 2019 WEBCAST

DC Investment Lineup
April 2, 2019 in IL
Pensions & Investments

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[Official Guidance]

Text of 2018 IRS Publication 575: Pension and Annuity Income (PDF)

49 pages. "What's New: Extended rollover period for qualified plan loan offsets in 2018 or later. For distributions made in tax years beginning after December 31, 2017, you have until the due date (including extensions) for your tax return for the tax year in which the offset occurs to roll over a qualified plan loan offset amount."
Internal Revenue Service [IRS]


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[Official Guidance]

Treasury Department Approval of Southwest Ohio Regional Council of Carpenters Pension Plan Application for Reduction of Benefits (PDF)

"In consultation with the [DOL] and the [PBGC], Treasury has determined that the Fund is eligible to reduce benefits under MPRA and that your application satisfies the requirements of subparagraphs (C), (D), (E), and (F) of section 432(e)(9) of the Internal Revenue Code, as added by MPRA.... [No] reduction of benefits can take effect before a vote of the participants and beneficiaries of the Fund with respect to the proposed reduction."
U.S. Department of the Treasury

[Guidance Overview]

Editor's Pick IRS 401(k) Plan Fix-It Guide: Hardship Distributions Were Not Made Properly

Feb. 11, 2019. "How to avoid the mistake: [1] Review the plan document language ... [2] When you amend your plan document, make certain the language for hardship distributions is in the most recent document. [3] Establish hardship distribution procedures ... [4] Only allow hardship distributions that meet the plan document and IRC Section 401(k) requirements. [5] Look for signs that the hardship distribution program is being abused or badly managed."
Internal Revenue Service [IRS]

2019 Annual Plan Deadlines by Event (PDF)

10 pages. "[This] chart includes the key annual events which must occur within a specific deadline. The chart is intended to serve as a tool that can be used by employers to monitor compliance over the plan and calendar year."
VOYA Financial

Editor's Pick Annual Plan Deadlines for the Plan Year Ending December 31, 2019 (PDF)

"[This] chart provides an explanation of key plan events and the deadline for each for Section 401(a) and 401(k) defined contribution plans with a plan year ending December 31, 2019. Off-calendar year plans should adjust the deadlines accordingly based on the time frames described in the chart."
VOYA Financial


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PBGC Pilot Mediation Project Is Now Permanent

"The Mediation Program remains voluntary and available only for certain cases and eligible plan sponsors. Cases are generally ineligible for the program if: [1] the plan sponsor has a minimal ability to pay; [2] there is a pending court proceeding; or [3] there is limited time to act and the plan sponsor has declined to sign a standstill or tolling agreement."
Proskauer's ERISA Practice Center

Charles Schwab 401(k) Lawsuit Trimmed but Moves Forward

"Former Schwab employee Michael Dorman can move forward with a challenge to how the company replaced an affiliated stable value fund in its 401(k) plan with other funds. But Dorman's other allegations, which challenged the fees and performance of the plan's Schwab-affiliated funds and certain loan transactions, were dismissed[.]" [Dorman v. Charles Schwab Corp., No. 17-285 (N.D. Cal. Feb. 8, 2019)]
Bloomberg BNA

Key Investment Themes for Consideration by Corporate DB Plan Sponsors in 2019

"[1] Determine if the Investment Committee Governance structure is optimal in executing decisions.... [2] Re-assess your de-risking glide path.... [3] Re-evaluate composition of liability-hedging assets.... [4] Examine concentration risk in multi-LDI manager structures and explore merits of complementary and diversifying strategies.... [5] Evaluate portfolio structure of return-seeking assets.... [6] Establish an investment strategy to manage potential pension-risk-transfer activities."

Misperceptions Prevent Retirement Saving But These Remedies Can Alter That Reality

"The financial decisions people make can reaffirm their perceived reality.... Living below one's means requires a discipline many simply don't possess.... Rather than bailing out their children, perhaps parents should be leading by example."
Fiduciary News

401(k) Loans: Why You Shouldn't Take Them

"You will likely forfeit some company matching contributions ... Job changes can force defaults of 401k loans ... The opportunity costs can be substantial ... Interest on a 401k loan is not tax-deductible ... Paying interest to yourself is not a good idea ... Easy access can lead to bad loans ... Double taxes are paid on interest payments."
Lawton Retirement Plan Consultants

Retiring Earlier Than Planned: What Matters Most?

"This study looks at: the impact of unexpected changes in health, employment, family, and finances on early retirement; and the prevalence of these shocks. The findings suggest that: [1] Health shocks play the largest role, mainly because they are widespread. [2] Job loss without finding a new job, while not as prevalent, is also important. [3] Family transitions have a modest impact, while financial shocks appear to have little effect."
Center for Retirement Research at Boston College

Editor's Pick An Actuarial Analysis of Public Pension Plan Contributions in the U.S. (PDF)

24 pages. "Most of the plans studied received insufficient contributions to reduce their unfunded liabilities ... The percentage of plans whose contributions were insufficient to reduce unfunded liabilities as a dollar amount ... but were sufficient to reduce unfunded liabilities as a percent of payroll ... increased from 36% in fiscal year 2003 to 77% in 2017 ... [Of] plans whose contributions did not reduce unfunded liabilities as a dollar amount, ... more than half also fell short of the plans' Actuarially Determined Contributions (ADC) or other target contributions"
Society of Actuaries


Forget the 401(k) -- Let's Invent a New Retirement Plan

"The reimagined plan ... would blend the stable income for life of old-fashioned defined-benefit pension plans with the favorable tax treatment of the contemporary 401(k). But unlike those plans, this one would follow participants wherever they work and be universally available, while accommodating the needs of different kinds of savers and protecting participants from their own worst impulses."
Jason Zweig, in The Wall Street Journal; subscription may be required

Benefits in General

Themes in Recent Employee Benefits Litigation

"Good fiduciary process continues to win ... Who must prove a fiduciary breach caused losses? It depends.... Administrative staff can create fiduciary liability ... Harder for fiduciaries to win on statute of limitations grounds ... Pension lawsuits challenge benefit calculation ... Fiduciaries win life insurance conversion suit ... Benefit interference claim proceeds."

Executive Compensation
and Nonqualified Plans

Securities Disclosure as Soundbite: The Case of CEO Pay Ratios

"This Article analyzes the history, design, and normative impact of the ... CEO pay ratio disclosure rule, which went into effect in 2018.... [The authors] propose that the SEC should seek to improve the rule's informational integrity by mandating a narrative disclosure approach that provides information about median worker pay and the resulting pay ratio with more context, nuance, and explanation."
Steven A. Bank and George S. Georgiev, via SSRN

Selected Discussions
on the BenefitsLink Message Boards

Roth Contributions Mistakenly Treated as Pre-Tax Contributions

Participant elected in 2015 to contribute Roth 401(k). From 2014 through June 2018, the participant contributions were inadvertently set up as pre-tax in all respects (W-2 reporting, deposits at recordkeeper, withholding calcs, etc). What to do? Note: The participant has since rolled his entire balance out to an IRA, but if it helps we can start by assuming the money is still in the plan.
BenefitsLink Message Boards

In-Service Periodic Payments: Restricted for Participants Over 59-1/2 But Unrestricted After 70-1/2?

Current plan document allows for in-service distribution for participants who are over 59-1/2 and employed for 5 years. The withdrawal is restricted to once a year. The client wants to amend the plan to allow multiple (periodic) payments of in-service distribution for participants who are over 70-1/2 and leave the restriction for once a year for participant who is 59-1/2. is this allowed?
BenefitsLink Message Boards

Traditional Safe Harbor 401(k) Restating to QACA: OK to Use Different Vesting Schedule?

We have a 401(k)(12) safe harbor 401k plan with the basic match that we want to restate to become a QACA safe harbor match 401(k) plan under 401(k)(13). Can the QACA match have a 2 year vesting schedule not just for new hires but also for existing participants with a traditional safe harbor match account that is 100% vested? Our document sources these accounts separately -- it has a separate definition of QACA match in the document.
BenefitsLink Message Boards

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Press Releases

DOL Obtains Temporary Restraining Order to Protect Participants and Beneficiaries of Failing MEWA
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

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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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