Retirement Plans Newsletter

April 19, 2019

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Retirement Plan Administrator
Cerberus Retirement, Inc.
in Phoenix AZ / Telecommute

Senior Associate Attorney
Ferenczy Benefits Law Center
in Atlanta GA

Junior DC Administrator
Summit Benefit & Actuarial Services, Inc.
Telecommute

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Doing Good While Doing Well
May 14, 2019 WEBCAST
HANYS Benefit Services

401(k) Plan Hot Topics
May 23, 2019 WEBCAST
Trucker Huss

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Discussions

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[Official Guidance]

Text of IRS Rev. Proc. 2019-19: Updates to Employee Plans Compliance Resolution System (PDF)

128 pages. "This revenue procedure modifies and supersedes Rev. Proc. 2018-52 ... published primarily to expand SCP eligibility to permit correction of certain Plan Document Failures and certain plan loan failures, and also to provide an additional method of correcting Operational Failures by plan amendment under SCP ... [b]eginning April 19, 2019 ... SCP is available to correct certain plan loan failures.... Reporting of deemed distributions ... Plan loan statutory failures.... Failure to obtain spousal consent for a plan loan.... Expanding SCP to correct certain plan loan failures by plan amendment.... [T]he Treasury Department and the IRS received comments on permitting the correction of Overpayments under SCP, and are currently developing guidance on these issues."
Internal Revenue Service [IRS]

Richard Thaler Wants to Use 401(k)s to Boost Social Security Payments

"Mr. Thaler, who won the Nobel Prize in 2017 for his work on behavioral economics, said Americans should be allowed to contribute more into Social Security using a portion of their 401(k) benefits when they retire, which would increase the size of their monthly Social Security checks. Allowing retirees to send up to perhaps $100,000 or $250,000 of their 401(k) balances to the Social Security Administration would deliver an inflation-adjusted annuity, guaranteed by the federal government at fair actuarial value over a retiree's lifetime -- which companies in the private sector are loath to do, said Mr. Thaler[.]"
InvestmentNews

Trump Administration Looking at Environmental, Social, and Governance Factors for Retirement Investments

"While not explicit, one could infer that the Assistant to the President for Economic Policy is looking to determine whether or not there are any discernable trends away from energy investments and, if so, whether any fiduciary-related guidance is controlling that trend."
Buck

How One Small Pension Fund Added $1 Billion in Value

"In 2006, the San Bernardino County Employees' Retirement Association made a decision that it credits with adding nearly $1 billion to its portfolio over time. The fund did not hire a particularly talented manager or bet big on a hot new asset, but rather improved its investment process -- specifically, how its nearly $10 billion portfolio gets rebalanced."
Institutional Investor

Benefits in General

Editor's Pick How Employers Are Tackling Student Loan Debt (PDF)

16 pages. "Nearly a third (32.4 percent) of [responding] employers ... reported offering or planning to offer some student loan debt program ... These 'Student Loan Debt Focused Employers' were more likely than the typical survey respondent (the full sample of all 250 that responded) to have taken steps to measure the financial wellness needs of employees, including examining existing employee benefit data ... surveying employees ... holding focus groups ... and analyzing other quantitative employee data ... Student Loan Debt Focused Employers cited complexity of the programs as their number one challenge in offering financial wellness benefits in the workplace -- nearly half gave this reason."
Employee Benefit Research Institute [EBRI]

Executive Compensation
and Nonqualified Plans

[Guidance Overview]

IRS Allows Flexibility in Purchase of Employer Shares by Stock Purchase Plan Participants

"The IRS concluded [in Private Letter Ruling 201911002] that a participant's ability to obtain a loan from its employer or a third party to purchase shares under a plan does not prevent the plan from qualifying as an employee stock purchase plan under Section 423(b). The IRS further concluded that the inability of a participant to obtain a loan to purchase shares due to the applicability of the Sarbanes-Oxley Act does not cause some options under the plan to have different 'rights and privileges' in violation of Section 423(b)(5)."
Morgan Lewis

Rabbi Trusts: When to Ask and What to Get

"[T]he most notable characteristic of a rabbi trust may be its inability to protect executives against the employer's bankruptcy or technical insolvency.... It is common as a result to say that rabbi trusts merely provide 'change of heart' protection. That protection can, however, be invaluable for an executive if significant severance, deferred compensation, or supplemental retirement benefits are not scheduled to be paid coincidentally with the executive's termination of employment."
The Wagner Law Group

Selected Discussions
on the BenefitsLink Message Boards

Employer Has Been Notified of 'Invalid' SSNs -- Participants May Be Illegal Aliens Using Fraudulent SSN

A plan sponsor has been notified by Social Security that 2 of its employees have invalid SSNs. These 2 employees have worked for the plan sponsor for several years, W-2s have been issued, and both are plan participants. This notification has come as a surprise to the plan sponsor because, until now, there never has been a notice of any kind. The plan sponsor asked each employee if the SSN being used was provided in error and if either has another SSN (either due to typo or ascertaining a valid SSN), to which both said the SSN the plan sponsor has on record is correct and that they have filed tax returns. The plan sponsor is still trying to get to the bottom of this. [1] If either or both are in fact illegal aliens using invalid SSNs (stolen or otherwise), are they entitled to their plan accounts? [2] If so, what taxpayer ID number would the plan need to report on 1099-R when distributed, or would the plan use the one on record currently even though it is known to be invalid? [3] If not, is it a forfeiture or is there some other action necessary?
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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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