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[Guidance Overview]
DOL's Final Rule on Association Retirement Plans: What It Means for the Retirement Industry
"[T]rade associations and other employer groups where the more liberal commonality threshold can be comfortably satisfied ... may choose to create a MEP under the regulation in order to obtain savings through economies of scale. But a greater expansion of the MEP market -- specifically the Open MEP market -- will need to wait for the passage of additional laws or regulations."
Drinker Biddle
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IRS Updates VCP Electronic Submission Procedures, Revises Form
"Sponsoring employers and their authorized plan representatives are now permitted to use the same 'Pay.gov' username to submit multiple Forms 8950 -- including forms submitted on behalf of different employers or plans. Similarly, the same 'Pay.gov' username may be used to submit additional user fees for multiple open VCP submissions ... with respect to different plans or clients of an authorized plan representative."
Compliance Dashboard
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Are Your Target Date Funds a Lawsuit Waiting to Happen?
"Although target date funds are very complicated, and have different risks, structures and fees, they have become the [QDIA] of choice for most 401(k) plans. Despite the major differences among target date funds, far too few fiduciaries really understand how they work or evaluate their vendor’s target date funds against the available alternatives."
Cohen & Buckmann, P.C.
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How Many Small Business Owners Accidentally Trap Themselves with This Treacherous 401(k) Fiduciary Conflict?
"Suppose ... the owner’s personal adviser, one not affiliated with the retirement plan’s adviser, offers a significant fee break to the owner if the owner transferred the retirement account to this adviser.... The math says it’s in the owner’s best interest to take the funds out of the retirement plan and consolidate with the personal adviser. But is that transaction in the best interests of the remaining plan participants? All the fixed fees associated with the plan must now be absorbed by them, potentially raising their fees quite dramatically."
Fiduciary News
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[Advert.]
SPARK Forum - November 3-5, 2019 -- The Breakers, Palm Beach, FL
Join us at the retirement services industry's leading event for top marketing, sales, administration and record keeping professionals. Comprehensive agenda includes topics for Record Keepers, 401(k) Plan Providers, Financial Advisors and Cyber Security Professionals.
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Avoiding Employee Benefits-Related Representations & Warranties Policy Exclusions
"The standard employee benefits-related policy exclusions typically include an exclusion for any losses related to the underfunding of a defined benefit plan and any losses relating to potential withdrawal liability associated with a multiemployer pension plan. These standard policy exclusions will be included in the R&W Insurance policy regardless of the diligence process.... To limit the number of transaction-specific policy exclusions, buyers and their counsel should ensure that they conduct a thorough due diligence process."
Morgan Lewis
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Protecting Retirement Assets from Creditors (PDF)
"[T]he Supreme Court decided in 2014 that inherited IRAs are not 'retirement funds' protected by the federal Bankruptcy Code, and the repercussions are still being felt. Bankruptcy courts have now extended the Supreme Court’s reasoning to find that retirement accounts received through divorce proceedings are not 'retirement funds,' and state courts are wrestling with whether their exemption statutes similarly expose inherited IRAs to creditors."
Greensfelder
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Creating a National Retirement Policy (PDF)
"A comprehensive national retirement policy that articulates guiding principles for the U.S. retirement system could help policymakers craft legislation and regulations that more effectively address Americans’ retirement security needs including securing adequate lifetime income."
American Academy of Actuaries
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Windfall Elimination Provision Exemptions (PDF)
"Of 150 sampled beneficiaries, SSA improperly exempted 26 from WEP.... Although the Agency was aware these 26 beneficiaries had received pensions, it did not reduce their benefits for WEP.... Based on our sample results, we estimate SSA improperly paid approximately 3,600 beneficiaries $118 million. Additionally, SSA exempted 28 beneficiaries from WEP where we found the exemptions questionable."
Office of the Inspector General, Social Security Administration
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[Opinion]
The SECURE Act and Guaranteed Retirement Income in Plans
"By now you have probably seen a number of articles about the SECURE Act and its safe harbor for guaranteed retirement income in 401(k) plans. Some have favored the safe harbor, while others have criticized it. In either case, the authors appear to contemplate that participants will be buying individual annuities at retail prices. ... [T]hose articles -- on both sides of the fight -- are at best misleading and in some cases just plain wrong."
FredReish.com
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Executive Compensation and Nonqualified Plans
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Capital Gains Tax Tug-of-War: Democratic Presidential Candidates, Trump's Indexing, and IRS Forms
"Democratic presidential candidates are proposing changes in capital gains tax to boost federal revenue. At the same time, pulling in the opposite direction, the Trump White House is considering an executive order to require the US Treasury to index capital gains for inflation, effectively resulting in a tax cut for investors ... [An] employee incurs a capital gain or loss when selling company shares acquired from stock option exercises, restricted stock/RSU vesting, or ESPP purchases, even if the number of shares is small."
Bruce Brumberg via Forbes
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Selected Discussions on the BenefitsLink Message Boards
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Can Adoption Agreement Reference the CBA for Eligibility Criteria?
Potential client employs people in several different unions. Wants to start a plan for those union employees only. But there are different requirements for eligibility for each union. The employer wants to put in "as specified in applicable CBA." Is that kosher?
BenefitsLink Message Boards
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Projected 2020 Retirement Plan Limitation Amounts, Based on New CPI Release
The latest and greatest figures based on today's CPI release -- this is a spreadsheet that's a revision of the last spreadsheet I created. Note: it adds 2 new columns which might never be used: [1] indexed limit for minimum distribution which was planned last year but never passed; and [2] indexed limit for catch up at age 60, which was part of the secure act if that ever gets passed. Of course, the year I to which I have it indexed might need to be adjusted someday.
Tom Poje via BenefitsLink Message Boards
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Most Popular Items in the Previous Issue
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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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