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Retirement Plan Analyst
Bates & Company, Inc.
in Winter Park FL

Portfolio Analyst - Target Date
T. Rowe Price
in Baltimore MD

Associate Portfolio Analyst - Target Date
T. Rowe Price
in Baltimore MD

Senior Pension Administrator
Aldrich Retirement Solutions
in Salem OR / Portland OR / San Diego CA / Carlsbad CA

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Webcasts, Conferences

Effective ESOP Administrative Committees
March 26, 2019 WEBCAST
National Center for Employee Ownership [NCEO]

Practical Privacy - Is Employee Information Secure and Private?
March 26, 2019 in CA
Western Pension & Benefits Council - San Diego Chapter

Choosing a Retirement Solution for Your Small Business
April 3, 2019 in IL
Employee Benefits Security Administration [EBSA], U.S. Department of Labor

ERISA Litigation Prevention and Defense: RFPs, Record Keeping, Revenue Sharing, Defending Against Class Actions
May 22, 2019 WEBCAST

►See 167 Upcoming Webcasts and Conferences

►See 1509 Recorded Webcasts


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DCIIA Custom Target Date Fund Survey (PDF)

"Based on the DCIIA sample of those that provided both custom TDF and plan assets, custom TDF strategies accounted for 43% of total plan assets for the year-end 2017. On average, the number of individual funds, or vintages, per custom TDF was ten.... DCIIA estimates that the sum of all TDF strategies ... totaled $2.1 trillion as of year-end 2017. Mutual funds accounted for $1.1 trillion, or 51%, of these TDF assets.... [In] 2015 the total TDF market accounted for an estimated $1.3 trillion across vehicles."
Defined Contribution Institutional Investment Association [DCIIA]


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Sponsored by ASC

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Editor's Pick Small Business 401(k) Plan Design Study: What 3,975 401(k) Plans Are Doing

"[1] 69.23% of plans use a safe harbor 401(k) plan design to avoid annual ADP/ACP and top heavy testing. Up from 68% in 2016. [2] 9.53% of plans automatically enroll employees that fail to make an affirmative enrollment election. Up from 8.71% in 2016...[3] The two most popular service requirements were 1 year -- used by 50.34% -- and none at all -- used by 21.81%. Very similar to our 2016 finding. [4] A 1 year of service eligibility requirement is most commonly combined with semi-annual entry dates and the hours of service crediting method -- the most restrictive combination allowed by law."
Employee Fiduciary

Courts Continue to Address Retirement Plan Mandatory Arbitration Provisions

"Mandatory arbitration provisions are not a simple matter and should be adopted only after careful consideration.... [1] What is the effectiveness to thwart class actions versus the risk of numerous participant arbitrations regarding the same subject matter and inconsistent arbitration awards? [2] Will the arbitration involve arbitrators with sufficient ERISA background and experience? ... [3] What are the potential time and cost savings derived from arbitration as an alternative to litigation? ... [4] What will be the effect on fiduciary indemnification and insurance coverage? ... [5] What is the risk of an adverse arbitration award that is generally non-appealable?"
Holland & Knight

Pension De-risking in 2019

"Increases in lump sum valuation interest rates have made de-risking in 2019 significantly less expensive than it was in 2018. It is also less expensive vs. a lump sum valuation made using current (first quarter 2019) interest rates. Changes in mortality assumptions in 2019, vs. 2018, have also reduced the cost of lump sums."
October Three Consulting

Editor's Pick State and Local Government Spending on Public Employee Retirement Systems (PDF)

"In the wake of the 2008-09 market decline, nearly every state and many cities have taken steps to improve the financial condition of their retirement plans and to reduce costs.... This update provides figures for public pension contributions as a percentage of state and local government direct general spending for FY 2016, and projects a rate of spending on pensions on an aggregate basis for FY2017."
National Association of State Retirement Administrators [NASRA]


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Senators Introduce Bill to Expand S-Corp ESOPs

"Senate Bill 177 [would] expand the creation of S Corporation ESOPs.... The Senate bill also claims to provide protection for small businesses by ensuring they are able to qualify for Small Business Administration (SBA) loans, contracting assistance, or business development programs after they transition to ownership to an ESOP. It also allows businesses that qualify for minority-owned, woman-owned, or veteran-owned programs to maintain their status after the ESOP acquires the shares."
Butterfield Schechter LLP

Why Rollover IRAs May Be a Bad Idea

"For the vast majority of 401(k) plan participants, ... it does not make sense to roll over their 401(k) balances from a prior employer into an [IRA}.... [1] Stable value funds are not available ... [2] IRA advisors may not be fiduciaries ... [3] IRA rollover = higher fees ... [4] IRA rollover balances are too small to meet minimums ... [5] Transaction fees are likely with IRAs ... [6] IRAs offer less protection from creditors and lawsuits ... [7] Loans are not available."
Lawton Retirement Plan Consultants

Reforming the Social Security WEP Exposes Weaknesses in State and Local Pensions

"The Windfall Elimination Provision (WEP) reduces Social Security benefits for retirees who also draw pension benefits from government employment not covered by Social Security. The Equal Treatment of Public Servants Act, a recently introduced congressional bill, would change how benefits are reduced.... Under the proposal, benefits for certain workers could be reduced by more than 30 percent and in some cases, by more than the amount of their noncovered pension benefit. The largest reductions would affect those who work in government employment for shorter periods, the same workers who already get the least benefit from their state and local government pension plans."
Urban Institute


Editor's Pick 2019 Legislative Proposals to Improve Retirement Security and Saving (PDF)

17 pages. "[The authors offer] a number of observations about policy issues raised by several key proposals that are, or recently have been, under consideration in Congress.... Most of the generally bipartisan retirement proposals evaluated here ... appear to stand a very good chance of enactment.... [In] the aggregate, they are likely to bring about a meaningful net improvement in the retirement landscape ... However, some of these approaches need to be modified and, importantly, should not be seen as a savior for the nation's ongoing retirement challenges."
Martin Neil Baily, Benjamin H. Harris, and J. Mark Iwry, for the Brookings Institution

Benefits in General

[Guidance Overview]

Changing Cybersecurity Baselines?

"On March 5, 2019 the [FTC commissioners] voted 3-2 to issue a proposed amendment to its Standards for Safeguarding Customer Information Rule ... The Proposal ... if finalized, could raise the baseline for plan fiduciaries when developing prudent cybersecurity programs.... [W]hile the steps outlined in the FTC's proposal do not apply to many financial institutions, the Proposal provides insight into changes that the other regulators could make and what plans and participants may expect."
Groom Law Group

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

Executive Compensation: Section 162(m) and the Grandfather Rule

"If the company retains the right to unilaterally amend the plan to reduce or eliminate deferrals and/or accruals ... only the amounts deferred prior to January 1, 2018, would be excluded [from the $1,000,000 deduction limitation]. This becomes important because of the change under TCJA to the definition of 'covered employee,' from those employed in certain positions during the year to a 'once covered always covered' approach."
Hawley Troxell

NQDC Issues for the 2019 Tax Season

"The IRS has still not finalized the Section 409A rules on W-2 reporting. Therefore, your company does not need to indicate deferred income on your Form W-2, though it may do so voluntarily in Box 14.... If your plan violates Section 409A and you need to pay a penalty and interest: Report this on Line 62 of IRS Schedule 4 (no longer directly reported on Form 1040).... Nonqualified deferred compensation itself is not an AMT preference item. However, deferrals of income can serve to prevent you from triggering the AMT in a tax year; conversely, income you receive in a distribution can trigger the AMT."

Selected Discussions
on the BenefitsLink Message Boards

Money Purchase Distribution at Employment Termination: Spousal Consent Needed Again?

Employer has a Money Purchase Plan. Participant named her children as her primary beneficiary and the spouse consented to waiving his rights. The employee has now terminated and wants to take a distribution. Does the participant's spouse have to consent to the payment? Since he waived his rights when he signed the beneficiary form, does he still have to consent to the distribution?
BenefitsLink Message Boards

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1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
(407) 644-4146

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, 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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