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January 17, 2020 logo logo
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[Official Guidance]

Text of Treasury Department Notice of American Federation of Musicians and Employers Pension Fund Application to Reduce Benefits

"The Board of Trustees of the American Federation of Musicians & Employers Pension Fund ... has submitted an application to reduce benefits under the plan in accordance with [MPRA] ... The purpose of this notice is to announce that the application submitted by the Board of Trustees of the Fund has been published on the website of the Department of the Treasury, and to request public comments on the application from interested parties[.]"

U.S. Department of the Treasury


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[Guidance Overview]

Key Changes to IRAs in 2020 Under SECURE Act

"For IRA providers, many of these provisions will require extensive system changes, updated policies and procedures, distribution forms, IRS reporting, and IRA governing documents. For IRA owners, the minimum required distribution changes will spark reconsideration of various estate planning techniques and revised beneficiary designation elections, as current beneficiary designations (and the various trust vehicles) could well upset existing estate plans -- which will no longer have the intended results."

Groom Law Group, Chtd., via Bloomberg Law

[Guidance Overview]

Regulation Best Interest: FINRA Examination Priorities for 2020

"Among the priorities in FINRA's 2020 Risk Monitoring and Examination Priorities Letter is examining the compliance readiness for Reg BI and Form CRS ... and then, after June 30, examining compliance with those requirements. Here's what the examination priorities letter says about that, including the questions that their examiners will ask[.]"

Supreme Court Vacates and Remands Plaintiff-Friendly Ruling in IBM 'Stock Drop' Litigation

"While it is now up to the Second Circuit to determine whether 'inevitable disclosure' will be a viable theory for plaintiffs, for now, the Supreme Court's decision provides some repose on concerns that the theory could be the basis for the next wave of litigation." [Retirement Plans Committee of IBM v. Jander, No. 17-3518 (S.Ct. Jan. 14, 2020)]

Groom Law Group

Supreme Court Remands IBM Stock Drop Litigation to the Second Circuit

"The Second Circuit will decide whether to entertain issues relating to the duties of [ESOP] fiduciaries who have inside information regarding company stock. This question was raised in briefing by the parties before the Supreme Court but had not been not addressed by the Second Circuit." [Retirement Plans Committee of IBM v. Jander, No. 17-3518 (S.Ct. Jan. 14, 2020)]

Thomson Reuters Practical Law


DOL Update on Multiple Employer Retirement Plans

Sponsored by Lorman and BenefitsLink

Jan. 21 webinar. What are the two authorized approaches for establishing a MEP? What should an employer consider when establishing a MEP and how can an employer stay compliant? BenefitsLink discountLearn more

The SECURE Act: Priming the (DC Plan) Canvas

"Here are a few key areas impacting defined contribution (DC) plans and highlights of what you should consider before adopting any individual provisions of the Act. ... [1] Generating lifetime income from DC plan balances ... [2] Pre-retirement access to balances: Is your DC plan a retirement vehicle or income support program? ... [3] Expanding retirement plan access for part-time workers in 401(k) plans ... [4] Navigating between different tax preferred savings vehicles."


The SECURE Act: What You Need to Know

"Although some of these provisions appear simple, service providers will need to make many changes to administrative systems, forms, processes, plan documents, etc.... [A]mendments are due by the end of the plan year beginning on or after January 1, 2022 (January 1, 2024 for governmental plans)."


After Stretch IRAs, What Retirement Breaks Could Congress Chop Next?

"The saga of Stretch IRAs is instructive when considering future potential changes.... Here are four more limits on retirement tax breaks circulating in Washington, some of them for more than five years.... [1] End back-door Roth IRAs.... [2] Require annual payouts from Roth IRAs.... [3] Limit the value of deductions for traditional IRAs and 401(k)s.... [4] Cap the size of tax-favored retirement plans."

The Wall Street Journal; subscription may be required

A New Year's 'To Do' List for 403(b) Plan Sponsors (PDF)

"[1] March 31, 2020 deadline for restatement of your plan document.... [2] Conduct a compliance check of the operation of your plan.... [3] Analyze how the SECURE Act affects your plan."

Boutwell Fay LLP

Regulators Crack Down on Teacher Pension Plans

"Stephanie Avakian, co-director of the SEC Division of Enforcement, said the agency is probing compensation and sales practices of third-party administrators. 'Among other things, we are digging into how administrators and their affiliates choose and recommend investment options, how they are compensated -- including whether they receive compensation for referring retirement plans to certain vendors or service providers -- and how they deal with conflicts of interest,' Ms. Avakian said ... The market is big, with $1.1 trillion being held in 403(b) plans at the end of the third quarter of 2019[.]"

InvestmentNews; subscription may be required

Annuity Purchase Update: January 2020 Interest Rates

"[P]ension plans continued to see an increase in funded status during this last quarter of 2019.... The average duration 7 annuity purchase interest rates and average duration 15 rates have both increased by roughly 30 basis points since September 2019.... This increase in rates since September led to a corresponding decrease in annuity purchase prices of approximately 7% ... The activity of plans purchasing annuities remained constant throughout 2019 and then dramatically increased in the fourth quarter."

October Three Consulting

Benefits in General

Employment Data, Employee Benefits and the CCPA

"For programs subject to ERISA, there is certainly an argument that CCPA is preempted by ERISA -- but California has a history of challenging ERISA preemption claims, and until courts work through that issue, it's an open question. Moreover, if your company provides any benefit programs that are not subject to ERISA (for example, a dependent care FSA, an HSA contribution program or a salary continuation program for those on short-term disability leave), no pre-emption argument is available."

Warner Norcross & Judd LLP

Executive Compensation
and Nonqualified Plans

Review Your Company's 'Top-Hat Filing' Status Now to Avoid Increased Form 5500 Penalties

"Two very recent legal developments -- increased penalties and a new filing search tool -- indicate that enforcement activity on top-hat filing compliance is increasing. Penalties for not filing ... have been increased, effective January 15, 2020. Fortunately, a low-cost correction option is available for corrections made prior to a DOL assessment of penalties."

O'Neil, Cannon, Hollman, DeJong & Laing S.C.

2020 Compensation Committee Handbook (PDF)

114 pages. "[This handbook] is intended to help compensation committee members understand and comply with the duties imposed upon them.... [It also describes] in some detail the concepts underlying a variety of areas within the bailiwick of compensation committees (for instance, the types of equity awards that are commonly granted and their respective tax treatment) and [provides perspectives] on some of the many decisions that compensation committees must make."


Selected Discussions
on the BenefitsLink Message Boards

Excess Contributions for Prior Years and 1099-R Codes

"We have a situation where an owner deferred fully to his own plan in 2017 and 2018 but had also deferred fully in another employer's 401(k) plan where he was just a participant. CPA is having to amend his 2017 and 2018 returns. We have read that the distributions must be taxable in both the year of deferral and the year of distribution. Excess contributions plus earnings were calculated for both the 2017 and 2018 deferrals and distributed in Dec 2019. Question: Unsure what to code the 2019 1099-R?"

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Press Releases

Most Popular Items in the Previous Issue

SECURE Act Rules Related to Safe Harbor Plans
Retirement Management Services, LLC, Inc.
1298 Minnesota Avenue, Suite H
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 2020, 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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