Retirement Plans Newsletter

November 18, 2019

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View job as Experienced 401k Plan Administrator/Consultant Experienced 401k Plan Administrator/Consultant

Farmer & Betts, Inc.
Tacoma WA / Tualatin OR / Littleton CO

View job as Pension Benefits Manager Pension Benefits Manager

Sheet Metal Workers' National Pension Fund
Fairfax VA

View job as Retirement Sales Consultant (External) Retirement Sales Consultant (External)

Ascensus
Chesterfield MO

View job as Social Science Research Analyst (Recent Graduate) Social Science Research Analyst (Recent Graduate)

Centers for Medicare & Medicaid Services [CMS]
Washington DC / Woodlawn MD

View job as Health Insurance Specialist (Recent Graduate) Health Insurance Specialist (Recent Graduate)

Centers for Medicare & Medicaid Services [CMS]
Washington DC / Woodlawn MD

View job as Benefits Advisor Benefits Advisor

Employee Benefits Security Administration [EBSA]
Pasadena CA / Telecommute

View job as Auditor (Pathways Intern) Auditor (Pathways Intern)

Pension Benefit Guaranty Corporation [PBGC]
Washington DC / Telecommute

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[Official Guidance]

Text of IRS Notice 2019-61: Weighted Average Interest Rates, Yield Curves, and Segment Rates for November 2019 (PDF)

"This notice provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under Section 417(e)(3), and the 24-month average segment rates under Section 430(h)(2) ... In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under Section 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under Section 431(c)(6)(E)(ii)(I)."

Internal Revenue Service [IRS]

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[Guidance Overview]

IRS Extends Temporary Nondiscrimination Relief to Benefits, Rights, and Features of Closed DB Plans

"Notice 2019-60 should provide welcome relief for plan sponsors of some soft-frozen DB plans that would otherwise fail their next nondiscrimination test for benefits, rights, and features [BRF].... [It] will not provide relief for DB plans that were soft frozen on December 13, 2013 or later ... [nor] plans amended after January 29, 2016 to change the availability of benefits, rights, and features that hurt BRF testing coverage ratios[.]"

Buck

[Guidance Overview]

IRS Gives Closed DB Plans Relief for Benefits, Rights and Features Testing

"Like the temporary relief first issued in 2014, [Notice 2019-60] provides relief for closed plans only if the sponsor adopted the closure amendment before Dec. 13, 2013. But the 2014 relief is only available for plans that satisfied coverage and nondiscrimination testing for 2013 in one of two specified ways. The new relief imposes no such requirement for BRF testing relief (but does not change the requirements for the 2014 relief)."

Mercer

How Reliant Are Older Americans on State and Local Government Pensions?

"[S]tate and local government workers are better prepared for retirement than others, in part because they are better educated, worked longer, and have had higher income than others. ... [C]utting their pensions by 50 percent could reduce the proportion who are adequately prepared for retirement by three or four percentage points[.]"

Michigan Retirement and Disability Research Center, Univ. of Michigan

Who Leads in PBGC Single-Employer Program Claims?

"[S]ince the Great Recession there has been only one fiscal year with single-employer program claims exceeding $1 billion: 2013.... [T]here was a sharp drop from 2016 to 2017, a drop of more than 50% ... [Listed] are the 10 largest claims made by an employer on the Single-Employer Program through 2017. Six of the firms listed are no longer in business, and one of them was subsumed into another firm[.]"

American Society of Pension Professionals & Actuaries [ASPPA]

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401(k) 'Cholesterol' -- Are Loan Defaults a Financial Health Hazard?

"Retirement LDL is equal to retirement plan loan defaults, penalties, premature taxes, and the investment gains that would have been earned had a loan been repaid and remained invested until the employee reached retirement age.... [R]etirement LDL is difficult to measure.... [M]ost annual plan checkups don't include it -- even though loans are considered a plan investment and ERISA requires plans to review investment performance."

401(k) Specialist

Participation and Leakages in Oregon's Auto-IRA

"Participation in OregonSaves ranges from 48 percent to 67 percent ... Twenty percent of employees with balances in September 2018 made at least one withdrawal during the subsequent year, removing $1,000 on average. Withdrawals were more likely when employees left their OregonSaves employer, although many full-year contributors also made withdrawals (32 and 17 percent of employees, respectively)."

Center for Retirement Research at Boston College

[Opinion]

Actuaries Promote Actuarial Methods/Tools for Retirement Planning

"The actuarial profession has recently released two items that support the use of actuarial methods/tools for personal financial retirement planning.... [B]oth actuarial organizations still place too much importance on whether the model employed in the development of a robust retirement spending budget is 'deterministic' or 'stochastic.' "

Ken Steiner, FSA Retired

[Opinion]

Thanks to Rep. Dan Flynn, Texas Teachers Can't Win

"Texas Representative Dan Flynn ... authored House Bill 2820 which eliminated a 403(b) product registration requirement, and ended modest fee and surrender charge caps.... 'This legislation is about one thing: Indexed Annuities,' says [financial advisor Scott Dauenhauer].... 'We are about to witness a dramatic increase in the amount of indexed annuities sold in Texas K-12 403(b) plans.' "

403bwise

Selected Discussions
on the BenefitsLink Message Boards

Solo 401(k) Plan OK Despite 414(m) Aggregation with HCE-Only Company?

"Can a business owner maintain a solo 401(k) plan if the business would be considered an affiliated service group with another company? The other company only has greater than 5% owners. What if the other company had employees with no ownership who would be eligible for the solo 401(k) plan?"

BenefitsLink Message Boards

Effect of Catch-Up Contributions on ADP Test of Fiscal Year Plan

"Plan year is 7/1/19 - 6/30/20. HCE defers on pay date 12/15/2019 -- $25,000. Nothing else deferred in the 2019 calendar year. HCE defers on pay date 1/15/2020 -- $26,000. Nothing else deferred in the 2020 calendar year. Is my ADP test for the plan year ending 6/30/2020 going to show deferrals of $51,000? Or will it show $38,500 deferrals because 2019 is less a $6,000 catch-up and 2020 is less a $6,500 catch-up?"

BenefitsLink Message Boards

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Press Releases

Most Popular Items in the Previous Issue

Deskless Yet Informed: Successful Plan Communications for Hard-to-Reach Employees (PDF)
Benefits Quarterly, published by the International Society of Certified Employee Benefit Specialists [ISCEBS]

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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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