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IRS Now Accepting Some Determination Letter Applications
"[T]he IRS will accept a determination letter application for individually designed statutory hybrid plans ... But the IRS will not be doing so forever: under [Rev. Proc. 2019-20] ... it will accept these applications for just one year, Sept. 1, 2019 - Aug. 31, 2020."
National Tax-Deferred Savings Association [NTSA]
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MIT, 401(k) Participants Reach Settlement 4 Days Before Trial Set to Start
"No terms were announced in the notice of settlement filed Thursday in U.S. District Court in Boston for the class-action lawsuit ... 'The parties have reached an agreement in principle to settle this case,' the notice said. 'Plaintiffs anticipate needing 45 days to file a motion for preliminary approval,' which will include details of the settlement. The deadline for the request is Oct. 28."
Pensions & Investments
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Advantages and Disadvantages of Hiring a 3(38) 401(k) Retirement Plan Adviser
"Advantages of hiring a 3(38) adviser: [1] Reduces fiduciary liability. ... [2] An experienced fiduciary takes the lead.... [3] Investments can be personalized for individual participants.... [4] Continuous investment oversight.... [5] Frees up time.... Disadvantages of hiring a 3(38) adviser: [1] Higher cost. ... [2] Gives up control. ... [3] You won't necessarily get to have your favorite investment.... [4] Requires trust.... [5] Requires timely communication. ... [6] You can never really delegate 100% of your fiduciary liability."
Chris Carosa, via Forbes
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Alight Solutions 401(k) Index: August 2019 Observations
"A volatile August on Wall Street spurred higher than normal 401(k) trading activity ... Net trading activity for the month was the highest in 2019 at 0.24% of balances. Additionally, there were six above-normal days, the highest monthly total since December 2018."
Alight Solutions
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Online IRS Tax Withholding Estimator Helps Retirees; Figures Tax on Social Security Benefits
"The new tool offers retirees, as well as employees and self-employed individuals, a more user-friendly way to check their withholding. Whether they receive wages or pension payments, it helps taxpayers estimate if the right amount is being withheld from their income to cover their tax liability. The estimator uses a simple, six-step question-and-answer format using information like marital or filing status, income, withholding, adjustments, deductions and credits."
Internal Revenue Service [IRS]
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Over 50 and Freelancing to Fill the Gaps in Retirement Funds
"The stereotype of today’s freelancer is a young, scrappy urbanite hustling for gigs in a shared work space or coffee shop. And while it is true that millennials make up the largest chunk of the freelancer population in the United States, another demographic may soon catch up: their parents."
The New York Times; subscription may be required
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Benefits in General
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Household Spending on Personal Insurance and Pensions Increased the Most from 2017 to 2018
"Average expenditures per consumer unit for 2018 were $61,224, a 1.9-percent increase from 2017 levels. During the same period, the Consumer Price Index (CPI-U) rose 2.4 percent, and average pretax incomes increased by 6.9 percent. From 2017 to 2018, a 7.8-percent increase in personal insurance and pensions expenditures was the largest percentage increase among all major components. This compared with a decrease of 0.9 percent from 2016 to 2017."
U.S. Bureau of Labor Statistics [BLS]
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Selected Discussions on the BenefitsLink Message Boards
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Can 401(k) Plan Have Individual Trustees None of Whom Is a U.S. Citizen?
We serve as TPA for a small 401k plan whose parent company is actually from the UK. The plan only covers the US employees. We had three trustees for the plan, 2 of which were not US citizens while one was a based in the US and was a US citizen. The US trustee left the company a few days ago. He will be removed as a plan trustee. Is there a problem if there are no US trustees for this plan?
BenefitsLink Message Boards
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One-Participant Plan Aggregated for Coverage
Plan covers only the 100% owner and his wife. The Plan has to be aggregated with another plan to pass coverage (i.e., the other plan covers nonexcludable employees). What's really happening is there are leased employees who are benefiting in a plan that has an identical design (which is why we can aggregate). But is my plan a one-participant-plan eligible for the 5500-EZ? Is it exempt from ERISA?
BenefitsLink Message Boards
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New Form 5310-A Required Due to Change in Controlled Group Members?
An employer previously filed Form 5310-A notifying the IRS of its two QSLOBs. In that filing, the employer included an attachment listing each member of its controlled group and assigning each member to either QSLOB #1 or QSLOB #2. Does the employer need to file a new Form 5310-A if it adds a subsidiary to the controlled group?
BenefitsLink Message Boards
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Recently Divorced Participant Wants Full Distribution Despite Settlement Agreement Giving Half to Ex-Spouse
Have you ever had a case where no DRO or QDRO was ever done, yet the participant is demanding a distribution? One of our clients has a 401(k) plan with a participant who was an unwilling party to his divorce. He says his ex wife "did it all" -- hired the lawyer and paid for the divorce. The lawyer made a one paragraph passing reference to the participant's retirement account in the Marital Settlement agreement. "Respondent has a retirement plan with XX Company. Upon distribution of the funds in this plan, Respondent will direct the Plan Administrator to divide the funds equally between the Respondent and the Petitioner, that being 50% to each party, however distributed." That's it. The participant has now terminated employment and claims to be in very dire straits and wants his half of his money RIGHT NOW so he can move in two weeks.
BenefitsLink Message Boards
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Most Popular Items in the Previous Issue
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