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May 23, 2019 logo logo
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Defined Contribution Account Manager
Nova 401(k) Associates
in Houston TX / Dallas TX / Austin TX / Scottsdale AZ / Telecommute

Relationship Manager - ERISA Department
National Benefit Services
in West Jordan UT / Plano TX

Enrolled Actuary
TPA specializing in small plans
in Fullerton CA

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Bill Expanding Annuity Options in Retirement Plans Passes the House

"The Setting Every Community Up for Retirement (SECURE) Act is designed to expand access to workplace retirement plans, particularly for small businesses, and will improve the ability for employers to extend greater access to annuity options in those plans. The measure also requires retirement plans to provide participating workers with an illustration of how much monthly income a retirement savings account might deliver. Additionally, the bill raises the age to begin required minimum distributions from retirement accounts from 70-1/2 to 72."


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House Passes Bill Making Big Changes to U.S. Retirement System

"[T]he House version of the legislation would repeal the age cap for contributing to individual retirement accounts, currently 70-1/2. It would also increase the age to start taking required withdrawals from 401(k)s and IRAs to 72 from 70-1/2.... The bill passed Thursday, which includes many of the provisions in a similar bill in the Senate, would encourage 401(k)-style plans to offer annuities by giving certain employers some protection from future liability if their chosen insurer fails to pay claims.... Both the House and Senate versions allow employers without an affiliation to band together to offer a 401(k)-type plan."
The Wall Street Journal; subscription may be required

Employers Link Student Loan Payments to 401(k)s

"Employees who put at least 2 percent of their income toward student loan payments will qualify for Abbott's 5 percent contribution to their 401(k) account -- without the worker having to put his own money into the 401(k).... After a burst of sign-ups following the August rollout, enrollment has increased steadily. All workers who are paying off their own student loans are eligible, including brand new hires. Older workers paying for a child's education cannot participate."
Squared Away Blog, by the Center for Retirement Research at Boston College

Defined Contribution Plan Participants' Activities, 2018 (PDF)

16 pages. "In 2018, 3.4 percent of DC plan participants took withdrawals, the same share as in 2017.... Only 1.6 percent of DC plan participants took hardship withdrawals during 2018, compared with 1.7 percent in 2017.... In 2018, 2.3 percent of DC plan participants stopped contributing, compared with 2.7 percent in 2017.... At the end of December 2018, 16.7 percent of DC plan participants had loans outstanding, compared with 16.7 percent at year-end 2017, and 17.0 percent at year-end 2016."
Investment Company Institute [ICI]

How to Establish a Strong Investment-Focused Retirement Plan Committee

"At the broadest levels, the investment-oriented committee's main objectives are to establish an investment selection process, implement investment decisions, analyze offerings and expenses and make changes where warranted.... These broad objectives can be broken down into a more manageable list of responsibilities."


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Product Development Moves Beyond the 401(k) Plan

"Retirement plan advisers with established 401(k) businesses are finding new revenue streams and client engagement opportunities among nonprofits and educational institutions, and in the area of estate planning."

Clearing Up Cybersecurity Confusion for Investment Advisers

"[M]any advisors assume that protecting client data and staying compliant require outsourcing these tasks entirely, purchasing expensive tools, or both. While outsourcing and quality cybersecurity tools can certainly be of benefit, advisors would be best served to understand what's required, what's best practice, and what their risks are before tackling the cybersecurity process and compliance."
Morningstar Advisor

Text of Exposure Draft: Pri-2012 Private Retirement Plans Mortality Tables (PDF)

"Most plan sponsors that update their mortality assumption from the RP-2006 tables to the Pri-2012 tables will experience only a small change in their pension liabilities, usually within plus or minus 1%.... [P]articipants in multiemployer plans did not exhibit significantly different mortality than participants in single employer plans.... When comparing the RP-2006 and Pri-2012 total dataset tables, the life expectancy as of 2019 for an age-65 female remained roughly constant at 87.4 years, while for an age-65 male, life expectancy declined slightly from 85.0 years to 84.7 years."
Society of Actuaries

An Actuarial Perspective on the 2019 Social Security Trustees Report (PDF)

10 pages. "In order to achieve viability of Social Security in the foreseeable future, any modifications to the system should include sustainable solvency as a primary goal. Sustainable solvency means that not only will the program be solvent for the next 75 years under the reform methods adopted, but also that the trust fund reserves at the end of the 75-year period will be stable or increasing as a percentage of the annual program cost.... Providing for solvency beyond the next 75 years will require changes to address micro-aging, as beneficiaries will likely be receiving benefits for ever-longer periods of retirement."
American Academy of Actuaries


Be a Faithful Fiduciary: Keep Politics Out of Your Decisions When Investing Other People's Money

"[V]ocal opponents of current immigration policies ... have advocated for divestment from private prison companies.... [CalPERS] felt this pressure as it faced a pending bill to divest its holdings from these companies, which total over $10 million in stocks.... CalPERS recently voted to oppose the pending bill which would mandate divestment.... The private sector should follow CalPERS' lead and prioritize its fiduciary responsibility over that of political expediency."
Institute for Pension Fund Integrity


The Future of Retirement Plans

"[P]articipant-directed investments ... will be replaced by turbo-charged managed accounts that are automatically customized to the needs of each individual participant.... The concern over individuals saving enough for retirement may disappear ... [with] all participants auto-enrolled at a customized contribution rate that is projected to accumulate enough savings for each individual's retirement.... Pricing could FINALLY be easy to understand."
Cammack Retirement Group

Selected Discussions
on the BenefitsLink Message Boards

Life Insurance Sales Commission Info for Line 10e

A small, calendar year cash balance plan purchases life insurance in November 2018. The insurance company says a Schedule A will not be completed until November 2019. Assuming the 2018 commissions will be listed on the Nov 2019 Schedule A, is it acceptable to wait until the 2019 5500 to enter 2018 commission amounts on Line 10e Part V of the SF? Or do we press the insurance company to provide the commission amount paid in 2018?
BenefitsLink Message Boards

Non-ERISA 403(b) Plan Has Started Automatic Contributions -- ERISA Now Applies?

A non-ERISA 403(b) plan was amended to include an automatic contribution arrangement. Does that amendment make the plan subject to ERISA? If so, if the plan is amended to terminate the ACA, does the plan again become a non-ERISA plan?
BenefitsLink Message Boards

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Text of IRS Regulatory Agenda, Spring 2019
Internal Revenue Service [IRS]

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David Rhett Baker, J.D., Editor and Publisher
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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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