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Retirement Plans Newsletter May 2, 2019 |
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Webcasts, Conferences Special Edition - Proposed 2019 Legislation
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Discussions |
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This Newsletter:
BenefitsLink Health & Welfare Plans Newsletter:
Message Boards Digest:
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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."
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[Guidance Overview]
"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."
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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.' "
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"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."
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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."
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[Advert.]
Handling QDROs, QMCSOs And Other Benefits Issues When An Employee Divorces
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. |
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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.
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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."
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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]
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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."
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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."
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Benefits in General |
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[Guidance Overview]
"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."
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Selected Discussions |
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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?
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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.
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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?
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Press Releases |
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Economic Group Pension Services Acquires Feldman Benefit Services, Inc.
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PSCA Announces Massey Services as 2019 Best-in-Show Signature Award Winner
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OneDigital Acquires The Benefit Group, LLC
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Alison J. Cohen, Partner, Ferenczy Benefits Law Center is the 2019 Recipient of the NIPA Excellence in Education Award
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Most Popular Items in the Previous Issue |
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Text of IRS Rev. Proc. 2019-20: Expanded Availability of Determination Letter Applications (PDF)
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Text of PBGC Final Regs: Terminated and Insolvent Multiemployer Plans and Duties of Plan Sponsors
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401(k) Loan Usage Reaches Nine-Year Low
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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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