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Retirement Plans Newsletter March 1, 2019 |
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Jobs
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Webcasts, Conferences DOL Has Rejected Your 2016 Form 5500 Filing: Now What?
Retirement Plans: Key Fiduciary Issues in 2019
Retirement Plans: Key Fiduciary Issues in 2019
Breaking up is Hard to Do: Terminating Your Relationship with a Client
IRA Academy 2019
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Discussions |
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This Newsletter:
BenefitsLink Health & Welfare Plans Newsletter:
Message Boards Digest:
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Sr. 401(k) Plan Administrator / Relationship Manager|
Intel Asks Supreme Court to Rule on ERISA Breach Case "The participant alleged that plan managers violated their ERISA obligations by offering too many alternative investments in the plans' lineups and that the plans' disclosures of investment information were inadequate. The investment policy committee has argued that the participant missed the three-year deadline for filing ERISA claims." [Sulyma v. Intel Corp. Investment Policy Comm., No. 17-15864 (9th Cir. Nov. 28, 2018; cert. pet. filed Feb. 26, 2019)]
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Considerations for Outsourcing Investment Decisions "Outsourcing plan investment decisions may offer a number of valuable advantages to the plan sponsor, including: [1] Access to expertise ... [2] Ability to focus on core business ... [3] Improved outcomes ... [4] Lower fiduciary risk ... [5] Economies of scale ... [P]ossible disadvantages: [1] Cost ... [2] Loss of control ... [3] Ongoing monitoring remains ... [4] Fiduciary risk is not eliminated."
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As States Clash with Feds Over Fiduciary, Regulation Jitters Rise "The federal government's failure to rally behind a uniform fiduciary standard for brokers and advisors left a vacuum that lawmakers in a variety of states are looking to fill with their own rules for the wealth management sector. But some worry that state efforts will add an unwelcome new layer of regulation and impinge on SEC-registered advisors."
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"In 2018, 59% of Vanguard participants in defined contribution (DC) plans were invested in a professionally managed account option, including 52% who were invested in a single target-date fund (TDF).... At year-end 2018, 9 in 10 plans offered a TDF, three-quarters of all participants had a position in the funds, and the funds accounted for 35% of plans' assets and more than half of total plan contributions."
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401(k) Safe Harbor Rules (PDF) Detailed summary of safe harbor design and administration, presented in list and chart form.
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"Among independent contractors, the share who were ages 55-64 increased from 18.8 percent to 22.9 percent; for those ages 65+, the share increased from 8.5 percent to 14.1 percent. In other words, 37 percent of independent contractors were older workers in 2017, up almost 10 percentage points since 2005."
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Trends in Employee Tenure, 1983-2018 "[M]ost workers have changed jobs during their working careers, and all evidence suggests that they will continue to do so in the future. This ... has several important implications -- potentially reduced or no defined benefit plan payments due to vesting schedules, reduced defined contribution plan savings, lump-sum distributions that can occur at job change, and public policy issues both through lower retirement incomes of the elderly population and the loss of experienced, public-sector workers likely to be retiring soon."
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FAS87 ASC715 Discount Rates and Moody's Rates, Updated February 28, 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).
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Time to Review 403(b) Plans for Compliance with IRS Requirements "The IRS has established a pre-approved plan program under which a plan sponsor has until March 31, 2020, to retroactively adopt a plan document which the IRS has already opined complies with the requirements of Internal Revenue Code section 403(b). A plan sponsor should analyze whether a pre-approved plan document works administratively and structurally with its objectives. The IRS has indicated that it does not intend to establish a determination letter program for individually designed section 403(b) plans."
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[Opinion]
"Incomes will continue to rise, old-age poverty will fall, and the share of retirees unable to maintain their standard of living will be similar to today. The median retiree born during the Great Depression had an income equal to 109% of his average inflation-adjusted preretirement earnings. For Gen Xers born from 1966 to 1975, the Social Security Administration projects a median replacement rate of 110% of real average preretirement earnings."
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[Opinion]
The Troubling Decline in Private Sector DB Plan Coverage: Write to Your Senators (PDF) "The Butch Lewis Act (S. 2147) ... is another proposed federal government rescue program to throw taxpayer dollars at a social problem... [P]rivate sector defined benefit plans pose a much larger set of problems due to the declining pension coverage of private sector employees whose pension benefits are not subject to collective bargaining."
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Benefits in General |
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DOL Is Rejecting Form 5500 Filings from Professional Employer Organizations "DOL is rejecting filings from 2016 where [Professional Employer Organizations (PEOs)] have used a coding system to protect the names of their clients. Both retirement plan and health plan Form 5500s have been rejected by DOL."
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Executive Compensation |
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[Guidance Overview]
A Deeper Look at Tax Reform's Evolving New Game Plan for Tax-Exempt Organizations (PDF) "As a practical matter, tax-exempt organizations will need to watch the payments triggered by an involuntary separation from employment to keep that amount at a multiple of 2.99 or less. Organizations who compensate covered employees at an annual amount that exceeds the $1 million dollar limit will need to budget for the excise tax on the compensation the tax-exempt organization pays the executive above the annual limit. Affected tax-exempt and governmental employers will also need to maintain lists of which individuals are amongst the 'High Five' in each calendar year after December 31, 2016, because the excise tax follows the change to Section 162(m) by adopting a 'once-in-always-in' rule."
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Selected Discussions |
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Never Signed a Plan Document -- VCP Issue? Solo-k client is moving assets from one Investment Company to another. The new Investment Company requires that a client use their AA (which is a service that we offer). So, our firm was asked to restate the plan onto our document. The advisor says the plan was effective 1/1/2014. We always ask for the prior AA for compliance and mapping purposes. The client says it cannot provide a document. No AA, no SPD, no resolution adopting a plan, nothing -- and asks that we just use our default provisions for the restatement. This is clearly a VCP issue, agreed?
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In-Service Withdrawal from Roth Account Participant want to take in-service withdrawal of $50,000 from his Roth 401k account. He's over age 59-1/2 and has met the 5-year rule on his Roth contributions. When the money comes out, must it be split between basis and earnings?
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GoFundMe Account for Participant Mitigates Financial Hardship? We were about to tell the plan sponsor that the hardship paperwork they'd sent to us looked good when one of our admins stumbled upon a GoFundMe page set up for the specific purpose of paying the bill that the hardship was submitted for. A very well-supported GoFundMe page. One could argue that there is no longer a financial need. The hardship form has a certification that the participant has no other funds with which to pay this bill; it was signed by the participant. Has anyone else thought about this, or come up with a policy?
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Press Releases |
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Topretirements.com Launches Free Online Retirement Preparation Quiz
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Most Popular Items in the Previous Issue |
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Forecasting Investment Returns and Expected Return Assumptions for Pension Actuaries (PDF)
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Connect
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BenefitsLink.com, Inc.
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Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager
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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