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Retirement Plans Newsletter January 6, 2020 |
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Webcasts, Conferences Step 2 of the Fiduciary Process: Formalizing the Investment Strategy
Will Policymakers' Vision for the Fiduciary Standard Be 20/20 in 2020?
The SECURE Act is Law - What You Need to Know
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Discussions |
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This Newsletter:
BenefitsLink Health & Welfare Plans Newsletter:
Message Boards Digest:
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[Official Guidance] Text of IRS Rev. Proc. 2020-04: Procedures for Determination Letter Requests (PDF) Begins at page 148 of the linked 290-page Internal Revenue Bulletin. "This revenue procedure is a general update of Rev. Proc. 2019-4, 2019-1 I.R.B. 146, which sets forth general information about the types of advice provided by Employee Plans Rulings and Agreements; general procedures for letter ruling and determination letter requests; specific procedures for determination letter requests; and the user fees associated with advice requested from Employee Plans Rulings and Agreements." Internal Revenue Service [IRS] |
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[Sponsored]
Webcast Series: Basics of Qualified Retirement Plans for 2020
New to the retirement plan industry? Or looking for a review? Don't miss ASC's Fundamentals of Qualified Retirement Plan webcasts! Part 1 includes Participation, Coverage, Vesting & much more. Attend 1, some or all sessions. Register Now! |
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[Guidance Overview]
"[Changes include:] [1] Section 6.02 has been modified to provide a list of applicable documents that should be submitted with determination letter request applications to enable the IRS to more efficiently process them.... [2] Section 8.02 has been modified to add a category of determination letter requests submitted by an adopting employer (or a controlling member of a multiple employer plan, if applicable) of a pre-approved plan with respect to the third (and subsequent) six-year remedial amendment cycles, under Rev. Proc. 2017-41 ... [3] Section 9.07 has been revised to delete a sentence that provided that a favorable determination letter does not constitute a determination with respect to the federal tax consequences of a lump sum risk transferring program." Thomson Reuters Practical Law |
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[Guidance Overview]
" 'Aggregating' plans has now taken center stage with the passage of the SECURE Act. We now often find ourselves a bit muddled by the new array of terms with which we now need to deal. Keep this as a (hopefully) handy glossary to guide when you find yourself caught in the middle of a conversation about 'Multiple Employer Plans' and need to quickly summarize the different MEP types[.]" Business of Benefits |
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[Guidance Overview] President Trump Signs SECURE Act Into Law "Although actual plan amendments will not be required for some time, modifications will need to be made to administrative systems starting in 2020, and any SECURE Act changes adopted will need to be communicated to plan participants, either by distributing a summary of material modifications or preparing a new summary plan description." Seyfarth Shaw LLP |
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The Effect of Employer Matching and Defaults on Federal Workers' TSP Savings Behavior "This presentation provides information about how CBO estimates the effects of employer matching and default deferral rates on federal employees' contribution rates to the Thrift Savings Plan and on employers' costs.... [M]ost of the previous literature has examined such changes in the defined contribution (DC) plans in the private sector -- an approach that makes extrapolating finds to public-sector workers difficult." Congressional Budget Office [CBO] |
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[Opinion] Scoring the SECURE Act: You Will Be Surprised at the Results "Many parties will be affected by the SECURE Act, and many entities will profit. However, ... the average American's ability to retire sooner, with more security or even at all, is not materially improved by the Act.... [The author has] scored the major provisions of the SECURE Act ... based upon how they help the average American worker prepare for retirement.... [and shares] some thoughts on what Congress should have done to improve the odds that more American workers can achieve a secure retirement." Lawton Retirement Plan Consultants |
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[Opinion] Your IRA Was Never Intended to Be a Vehicle to Pass Along Your Wealth "IRAs and 401(k)s weren't meant to be used as a way to transfer wealth. They were designed to encourage people to save by giving plan participants and/or account holders -- not their children or children's children -- a tax break. The loophole created by the law that has allowed beneficiaries to stretch out their tax burden was a bonus, not an entitlement that should never be touched. The provision affecting stretch IRAs would generate $15.7 billion of revenue[.]" The Washington Post; subscription may be required |
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[Opinion] The Public Pension Funding Crisis: Why Should Today's Workers and Retirees Pay the Price? "[P]ublic pensions have been underfunded by modern metrics for generations, essentially since the inception of those pensions.... Why should this generation be the one to suffer from the obligation to bring the plans up to funded status -- either as pensioners or participants with benefit cuts, or as taxpayers?" Elizabeth Bauer via Forbes |
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Benefits in General |
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[Guidance Overview] Year-End Tax Act Ushers in Plan Changes "Many of these changes become effective currently or in the next year, and some even have a retroactive effect that would require retirement plan sponsors' immediate attention.... Although we are yet to hear from the IRS on the timing of amendments to retirement plans that must reflect the SECURE Act changes, employers should start reviewing their plans now to determine what action is immediately required under the new legislation, and what steps must be taken to ensure plan compliance in 2020 and beyond." Nixon Peabody LLP |
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Selected Discussions |
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Applying the Tax Credit Provided Under the SECURE Act "If a small business has an existing 401(k) but then sets up a cash balance plan, could they use the tax credit for the cash balance plan? Is the tax credit per employer or per plan?" BenefitsLink Message Boards |
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One Contingent Beneficiary Is Deceased -- Is Other Now 100%? "A participant and his primary beneficiary are deceased. There are two contingent beneficiaries with 50% allocations. If one of the contingent beneficiaries passes away, would the surviving benefit become the 100% beneficiary?" BenefitsLink Message Boards |
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Effect of SECURE Act on Participant Who Has Already Taken Their First RMD "A person who took their first RMD in 2019 (when they turned 70-1/2). Per the SECURE Act, are they required to take their RMD in 2020 or can they skip and take this RMD when they turn 72 (in 2021)?" BenefitsLink Message Boards |
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Press Releases |
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Most Popular Items in the Previous Issue |
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Text of IRS Rev. Rul. 2020-02: Permitted Disparity in Employer-Provided Contributions or Benefits (PDF)
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Important 401(k) Plan Sponsor Concerns for 2020 (PDF)
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