Retirement Plans Newsletter

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Retirement Plan Relationship Manager
AEPG Wealth Strategies
in Warren NJ

General Attorney (Tax) - Health and Welfare Branch
Internal Revenue Service, Department of the Treasury
in Washington DC

General Attorney (Tax) - Executive Compensation Branch
Internal Revenue Service, Department of the Treasury
in Washington DC

General Attorney (Tax) - Exempt Organizations
Internal Revenue Service, Department of the Treasury
in Washington DC

General Attorney (Tax) - Qualified Plans Branch
Internal Revenue Service, Department of the Treasury
in Washington DC

General Attorney (Tax) - Employment Taxes
Internal Revenue Service, Department of the Treasury
in Washington DC

Employee Benefits Investigator
Employee Benefits Security Administration, U.S. Department of Labor
in Atlanta GA

Daily Valued Plan Administrator
Rudd and Wisdom Inc
in Austin TX

ESOP Administrator
Blue Ridge ESOP Associates
in Charlottesville VA / Telecommute

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[Guidance Overview]

IRS Expands Determination Letter Opportunities for Retirement Plans

"Since 2017, the determination letter program has been available only for new or terminating individually designed plans. Beginning on September 1, 2019, the determination letter program will be expanded [by Rev. Proc. 2019-20] to include [1] retirement plans that merge as the result of a corporate transaction, and [2] certain defined benefit plans."
Smith, Gambrell & Russell, LLP


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[Guidance Overview]

Editor's Pick Fiduciary Rule Remnants: The Strange Case of Field Assistance Bulletin 2018-02 (PDF)

"Under the Fiduciary Rule, most cross-selling would have been clearly fiduciary activity, but could be engaged in if the conditions of the BIC Exemption or Principal Transactions Exemption were met. With the Fiduciary Rule and related exemptions gone, we are back to ambiguity. If the activity is not fiduciary activity, then no exemption is needed -- but if it is fiduciary activity, no exemption is available. In this situation, FAB 2018-02 allows the fiduciary to continue to rely on the BIC Exemption or the Principal Transactions Exemption, even though those exemptions technically no longer exist."
K&L Gates, via Benefits Law Journal

DOL to Issue New Rules on Fiduciary Duties

"[DOL Secretary Alexander Acosta] said that Labor is collaborating with the [SEC] as it works on its advice-standards package, which includes Regulation Best Interest, and that 'based on our collaborative work, we will be issuing new rules in this area.' "

PBGC Issues Final Regs Amending Valuation, Reporting, and Disclosure Rules for Terminated and Insolvent Multiemployer Plans

"The final regulations, which are substantially the same as [those proposed in July, 2018], change the reporting and disclosure requirements for multiemployer plans that are: Terminated by a mass withdrawal. In critical status and that are insolvent or expected to be insolvent."
Thomson Reuters Practical Law

IRS Issues Retirement Plan 'Operational Compliance' Checklist for 2019

"The 2019 Operational Compliance List starts with some important caveats, including: [1] While the IRS intends to periodically update the list, it is not intended to be comprehensive. [2] A plan must be operated in compliance with all changes in qualification requirements from the respective effective date of each such change. [3] In order to be qualified, a plan must comply operationally with each relevant qualification requirement, even if the requirement is not included on the Operational Compliance List."
Michael Best


Handling QDROs, QMCSOs And Other Benefits Issues When An Employee Divorces

Sponsored by Lorman and BenefitsLink

May 7 webinar. Practical guidance in reviewing and complying with QDROs, DROs, and QMCSOs, along with tools to identify and address potential complications that may arise when an employee divorces. BenefitsLink discount.

Editor's Pick Notes from Meeting of Actuaries 'Intersector Group' with IRS, March 7, 2019 (PDF)

6 pages. Topics include: [1] Revenue Procedures 2017-56 and 2017-57; [2] Final Form 5500 Filings; [3] Substitute Mortality Tables (SMTs); [4] Market Rate of Return (ROR) Plans; [5] Multiemployer Technical Correction; [6] Adjusted Funding Target Attainment Percentages (AFTAPs) and Annuity Purchases; [7] Life Expectancy Tables; [8] Retiree Lump Sum Payments; [9] 'New Form 5500'; [10] Plan Factors; and [11] Guidance Plan.
American Academy of Actuaries, Conference of Consulting Actuaries, Society of Actuaries, and ASPPA College of Pension Actuaries [ACOPA]

GAO Issues Report on IRA and Retirement Plan Early Withdrawals

"Survey interviewees offered suggestions on steps that could be taken to limit early retirement plan distributions. [1] Allow continued repayment of outstanding plan loans after separation from employment ... [2] Restrict early access to employer-made retirement plan contributions. [3] Encourage partial distributions (rather than lump sums) when an employee separates from service with an employer. [4] Build emergency savings features into employer-sponsored retirement plans, with access criteria that differ from amounts earmarked for retirement."

An Overview of Social Security

"176 million covered workers (and their employers) pay into the system. 63 million beneficiaries receive monthly cash benefits, including retired workers, disabled workers, spouses, children, and widow(er)s. It is a self-financing program, with 91.7% of its total income from dedicated tax revenues. Over its 84-year history, the program has collected $21.9 trillion and paid out $19.0 trillion, leaving trust fund asset reserves of more than $2.9 trillion. It is projected to be unable to pay full benefits starting in 2035, largely due to demographic factors." [IF10426 version 11, updated May 1, 2019]
Congressional Research Service [CRS]

Pension Income Plays Significant Role in Supporting Retirees' Spending (PDF)

"[W]hile about a third (34 percent) of households with regular pension/annuity income spent more than their income, nearly half -- 46 percent -- of households without regular pension/annuity income spent more than their total income ... While the average single retiree and retired couple had fairly similar spending-to-income ratios (86 percent and 80 percent respectively), at the median there is a significant difference: the median single retired households spent 112 cents for every dollar of income reported; in comparison, the median retired couple spent 86 cents for every dollar of reported income."
Employee Benefit Research Institute [EBRI]

Pension Finance Update, April 2019

"Pension finances bounced back in April due to higher stock prices and higher interest rates. Both model plans we track gained ground last month: Plan A added more than 2% and is now up almost 5% for the year, while Plan B gained close to 1% and is now up 2% through the first four months of 2019."
October Three Consulting

Benefits in General

[Guidance Overview]

Editor's Pick DOL Proposes Clarifications to FLSA 'Regular Rate of Pay' Exclusions with Potential Implications for Employee Benefits

"The [March 29] proposed rules fail to clearly exempt certain common employer-sponsored benefit arrangements from having to be taken into account for purposes of the FLSA's overtime rules.... Key employee benefits-related proposals [include:] [1] Exclusion of payments for unused leave ... [2] Clarification that wellness programs, tuition benefits and similar benefits offerings may be excluded ... [3] For bona fide plans, clarification of the types of benefits that may be excludable ... [4] Clarification regarding discretionary bonuses ... [5] Examples are not exclusive."
Groom Law Group

Selected Discussions
on the BenefitsLink Message Boards

Eligibility After Converting from 1099 to Common-Law Employment

A 1099 "employee" has been with a client for 7 years and is now a W-2 employee. Eligibility is age 21, 12 months of service, with entry the 1st of the month following. Must this person wait 12 months to enter? Technically he's never been an employee. Or, maybe he was, but the client treated him as 1099 as a way to keep him from being an employee?
BenefitsLink Message Boards

401(k) Hardship Distribution for My College Tuition: How to Document Costs Ahead of Time?

How does one get a statement of sorts or proof of college tuition billing for the future 12 months? Normally you don't know what classes are available for the future semester until around the end of the current semester you're in.
BenefitsLink Message Boards

Replacing SIMPLE with 401(k) Plan Mid-Year After Correcting SIMPLE Employer Eligibility Failure

Notwithstanding the general rule that you can't terminate a SIMPLE and replace it with a 401(k) plan mid-year, if the employer has become ineligible to maintain a SIMPLE and is beyond the grace period, and they correct under VCP by stopping any further contributions in the middle of this year, can they start a 401(k) plan for the rest of this year? Or must they wait to start the 401(k) until next year?
BenefitsLink Message Boards

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Press Releases

OneDigital Acquires The Benefit Group, LLC
OneDigital Health and Benefits

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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, 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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