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[Official Guidance]

PBGC Regulatory Agenda, Fall 2019

Proposed Rules:

  • Valuation Assumptions and Methods: Interest and Mortality Assumptions for Asset Allocation in Single-Employer Plans and Mass Withdrawal Liability Determination in Multiemployer Plans
  • Benefit Payments
  • Administrative Review
  • Multiemployer Plan Guaranteed Benefits
  • PBGC-Approved Arbitration Procedures -- Multiemployer Plans
  • Benefits Payable in Terminated Single-Employer Plans: Assumptions for Determining Lump Sum Amounts
  • Examination and Copying of PBGC Records
  • Filing and Issuance Rules
  • Improvements to Rules on Recoupment of Benefit Overpayments

Final Rules:

  • Miscellaneous Corrections, Clarifications, and Improvements
  • Methods for Computing Withdrawal Liability
  • Adjustment of Civil Penalties
  • Privacy Act Regulation: Exemption for Insider Threat Program Records.

Pension Benefit Guaranty Corporation [PBGC]

[Guidance Overview]

New Guidance on the Territorial Scope of GDPR Impacts U.S. Benefit Plans

"Benefit plans may need to conduct a closer review of the types of information gathered about enrollees and how that information is processed to determine whether activities give rise to 'monitoring' when providing services to individuals who are in the E.U. The specific activities of employees in the E.U. may also be relevant, as well as whether the U.S. data controller or processor has an establishment in the EU to which the data relates."

Groom Law Group

[Guidance Overview]

Editor's Pick Analysis of DOL's Proposed Notice and Access Electronic Disclosure Safe Harbor

"The proposed rule presents a number of practical challenges ... [which] include ensuring the continued accuracy of electronic addresses, the accuracy of the webpage, and any links to relevant documents; the need to present documents in a widely available format suitable for reading, printing, and permanent storage across all electronic devices; and the requirement that documents be searchable by word.... Another question is whether the requirement to properly maintain a website will create an additional burden when it comes to administrators' fiduciary duty because the proposal states that administrators must prudently select and monitor any website providers. "

Morgan Lewis

[Guidance Overview]

Do the Final Regs on Hardship Distributions Affect 457(b) Plan 'Unforeseeable Emergencies'?

"[A] 457(b) plan may continue to require a 6-month deferral suspension if a member requests an unforeseeable emergency. However, if a member receives a hardship distribution from a 401(k) plan or a 403(b) plan, the employer cannot suspend the member's contributions to the 457(b) plan."

Ice Miller LLP

[Guidance Overview]

Technical Amendments Bill Would Change Taxation of Puerto Rico Retirement Plan Distributions

"[S]ignificant amendments ... would be made by HB 2172 to the PR Code provisions on qualified retirement plans: [1] Plan distributions to Puerto Rico non-residents ... [2] Withholding tax provisions on plan distributions ... [3] Plan loan provisions."

McConnell Valdes

2019 EBSA Enforcement Program Restores Over $2.5 Billion to Employee Benefit Plans and Participants

"EBSA's enforcement program reported over $2 billion in recoveries from its investigations. Under its Terminated Vested Participant Project, EBSA helped participants collect nearly $1.5 billion in retirement benefits owed to them in the form of lump sum payments, present value of lifetime annuity payments and interest. EBSA's criminal investigations led to the indictment of 76 individuals -- including plan officials, corporate officers, and service providers -- for offenses related to employee benefit plans." [Also available: Fact Sheet]

Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

Missing and Unresponsive Participants in ERISA Plans: Current Challenges and Recommendations

"The issue of missing participants in ERISA plans has been the subject of investigations by the [DOL] and the focus of other regulators, including the [IRS]. In light of this increased regulatory focus, plan sponsors may want to take steps to ensure that they understand their fiduciary duties regarding missing participants and the [DOL's] position on these duties."

Morgan Lewis

Two Possible Approaches to Reducing Population at Risk of Falling Short of Needed Retirement Income (PDF)

"A nationwide OregonSaves plan would provide reductions in retirement deficits for all participants, most significantly for the youngest age cohort. 401(k) safe harbor plans would reduce retirement deficits for each cohort even further."

Employee Benefit Research Institute [EBRI]

Why Defined Contribution Plans Need Private Investments (PDF)

30 pages. "Investing in private funds always increases average portfolio returns and reliably increases Sharpe ratios (return per unit of risk). The results are robust when accounting for the inclusion of higher fees for the private portfolio and while randomly selecting a few funds from each vintage year (e.g., 10), suggesting that the results are feasible in practice for many investor types."

Defined Contribution Alternatives Association [DCALTA] and the Institute for Private Capital

Amazon Taps Fidelity to Handle Its Massive 401(k) Plan

"[Amazon] is booting The Vanguard Group as its 401(k) recordkeeper in favor of Fidelity, effective in January, it said in a securities filing this week.... The move gives Fidelity responsibility for the administration of the retirement savings plan for one of the largest companies in the U.S., both by headcount and by market capitalization. As of the end of 2018, Amazon had $5.7 billion in total assets in its 401(k) plan[.]"

Boston Business Journal

A Primer on Early Withdrawals from Individual Retirement Accounts (IRAs) and 401(k) Plans

"Individuals who make early withdrawals are subject to rules that vary by plan type, the circumstance warranting a withdrawal, and plan-specific rules. IRAs generally have fewer restrictions on early withdrawals than do 401(k)s."

Congressional Research Service [CRS]

Benefits in General

[Official Guidance]

Draft of IRS Publication 15-A: Employer's Supplemental Tax Guide, for Use in 2020 (PDF)

28 pages. Topics include: [1] Who are employees? [2] Employee or independent contractor? [3] Employees of exempt organizations. [4] Religious exemptions and special rules for ministers. [5] Wages and other compensation. [6] Sick pay reporting. [7] Pensions and annuities.

Internal Revenue Service [IRS]

[Official Guidance]

DOL Regulatory Agenda, Fall 2019

Prerule Stage (EBSA): "Open MEPs" and Other Issues Under Section 3(5) of ERISA.

Proposed Rules (EBSA):

  • Fiduciary Rule and Prohibited Transaction Exemptions
  • Grandfathered Group Health Plans and Grandfathered Group Health Insurance Coverage
  • Default Electronic Disclosures by Employee Pension Benefit Plans Under ERISA
  • Transparency in Coverage

Final Rules (EBSA): Adoption of Amended and Restated Voluntary Fiduciary Correction Program.

Prerule Stage (WHD): Request for Information: The Family and Medical Leave Act of 1993.

U.S. Department of Labor [DOL]

[Official Guidance]

IRS Regulatory Agenda, Fall 2019

Proposed Rules:

  • Further Guidance on the Application of Section 409A to Nonqualified Deferred Compensation Plans
  • Determination of Governmental Plan Status
  • Deferred Compensation Plans of State and Local Governments and Tax-Exempt Entities
  • Additional Rules Regarding Pension Plan Funding and Benefit Restrictions
  • Application of Section 409A to Nonqualified Deferred Compensation Plans
  • Collectively Bargained Welfare Benefit Funds
  • Guidance on Rules Applicable to IRAs Under Sections 408 and 408A
  • Spousal IRAs, SEPs and IRA Technical Changes
  • Reporting and Notice Requirements for Deferred Vested Benefits Under Section 6057
  • Requirements for Employee Stock Ownership Plans
  • Excise Tax on High Cost Employer-Sponsored Health Coverage
  • Minimum Vesting Standards
  • Rules Relating to Employer-Provided Meals and Employer-Operated Eating Facilities
  • Application of Nondiscrimination Requirements, Backloading Limitations, Certain Plan Termination Rules, Benefit Limitations, and Top Heavy Rules to Statutory Hybrid Plans
  • MEPs and the Unified Plan Rule
  • Section 4960 Excise Tax on Tax-Exempt Organization Compensation
  • Use of Actuarial Tables in Valuing Annuities, Interests for Life or Terms of Years, and Remainder or Reversionary Interests
  • Regulations Under Section 401(a)(9) Updating Life Expectancy and Distribution Period Tables for Purposes of the Required Minimum Distribution Rules
  • Health Reimbursement Arrangements and Other Account-Based Group Health Plans
  • Voluntary Employees' Beneficiary Association (VEBA) Regulations

Final Rules:

  • Reporting and Notice Requirements for Deferred Vested Benefits Under Section 6057
  • Regulations Explaining How to Compute Unrelated Business Taxable Income (UBTI) of Voluntary Employees' Beneficiary Associations (VEBAs)
  • Application of Normal Retirement Age Regulations to Governmental Plans
  • Health Insurance Providers Fee
  • Additional Rules Regarding Information Reporting of Minimum Essential Coverage
  • Withholding on Certain Retirement Plan Distributions Under Section 3405(a) and (b)

Internal Revenue Service [IRS]

Earnings and Employment Data for Workers Covered Under Social Security and Medicare, by State and County, 2017 (PDF)

461 pages. "In 2017, 173.0 million workers had earnings taxable under the Social Security program.... Social Security taxable earnings totaled $6.998 trillion ... In 2017, 177.0 million workers had earnings taxable under the Medicare program.... Medicare taxable earnings totaled $8.654 trillion. Medicare taxes totaled about $251 billion."

U.S. Social Security Administration [SSA]

Are You Periodically Benchmarking Your Group Benefits Plan?

"For those employers looking to target a more specific comparison, consider using e-surveys of key employers within your region or industry. This gets very specific and takes a bit longer. To garner cooperation/participation, your company would need to play a key role in reaching out to those targeted employers to encourage their participation, and in exchange, they would receive the results on a de-identified basis."


Selected Discussions
on the BenefitsLink Message Boards

Coupon Loans -- Why Are They a Bad Idea?

"I'm trying to talk a client (a big client) out of having coupon loans. They don't want to take on the responsibility of taking money out of people's paychecks. I'm trying to go the 'you need to be reasonably sure these loans will actually get paid off, and coupon loans makes this job very difficult' route. Any other thoughts?"

BenefitsLink Message Boards

Non-Spousal Beneficiary Wants More Than Required Minimum Distribution But No Partials Allowed by Plan Document

"Can a non-spousal beneficiary withdraw more than the required amount? Plan does not allow for partial distributions after termination. The RMD is about $500 and she wants to take $5,000. If she can, would the whole distribution be taxed at 10% or just the RMD amount?"

BenefitsLink Message Boards

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Press Releases

Most Popular Items in the Previous Issue, Inc.
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Winter Park, Florida 32789
(407) 644-4146

Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

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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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