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January 23, 2020 logo logo
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Houston TX / Telecommute

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Irving TX / Telecommute

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DeMars Pension Consulting Services, Inc.
Overland Park KS

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Pension Benefits Unlimited, Inc.
Irvine CA

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QRPS, Inc.
NC / Telecommute

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Sylmar CA / Telecommute

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Actuarial Systems Corporation
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[Official Guidance]

Text of 2019 Instructions for Form 5500-EZ: Annual Return of a One-Participant (Owners/Partners and Their Spouses) Retirement Plan or a Foreign Plan (PDF)

11 pages. "The instructions have been updated to reflect the penalty changes under section 6652(e) for a plan failure to file a return. The penalties have been increased to $250 a day, up to a maximum penalty of $150,000 per plan year applied to returns required to be filed after December 31, 2019." [Also available: 2019 IRS Form 5500-EZ]

Internal Revenue Service [IRS]

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[Official Guidance]

Text of 2019 Instructions for IRS Form 5329: Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts (PDF)

"What’s New: ... The additional tax on early distributions doesn't apply to qualified disaster distributions."

Internal Revenue Service [IRS]

[Official Guidance]

Text of FRTIB Proposed Regs: Simplification of TSP Catch-Up Contribution Process

"The [Federal Retirement Thrift Investment Board] proposes to reduce paperwork burdens on participants who are eligible to make catch-up contributions, by removing the regulation that requires them to submit two different contribution election forms."

Federal Retirement Thrift Investment Board [FRTIB]

[Guidance Overview]

Qualified Retirement Plan Definition of Compensation, Explained -- Part 1

"The IRS has three safe harbor compensation definitions, in addition to IRC 415(c)-2(b) compensation (statutory compensation), as they relate to a qualified retirement plan that will satisfy both IRC 415(c) and IRC 414(s). The three compensation definitions following the statutory definition of compensation are safe harbor definitions of compensation that are adjustments to the statutory definition. There are also safe harbor adjustments to IRC 414(s) that can be made. Each of these safe harbor definitions will be defined and compared in [this article]."

Clark Schaefer Hackett

[Guidance Overview]

2020 Procedures for Determination Letters, Other Advice Now Available

"Key substantive changes for all retirement plans include: Documents required with determination letter requests.... New categories for determination letter requests.... Lump sum windows.... Mailing addresses.... Several updates relate to preapproved plans: Tax-exempt status of trusts/custodial accounts.... Eligibility to request determination letters.... Procedures for requesting determination letters on Form 5307."


From Saving to Income: The Next Evolution of Defined Contribution Plans (PDF)

12 pages. "By embracing new technologies, customization opportunities, and risk-mitigation solutions, DC plans have the potential to help workers meet their retirement income challenges. They also have the potential to help employers, both by mitigating the costs associated with older workers staying on the job because they can't afford to retire, and by giving retirees an incentive to stay in their workplace plans."


New Year's Resolutions for Defined Benefit Plan Sponsors

"[1] Revisit plan goals and objectives.... [2] Understand your risks.... [3] Review your glide path.... [4] Optimize your expected return on assets (EROA).... [5] Re-evaluate your interest rate hedge.... [6] Understand future contribution requirements.... [7] Take advantage of low borrowing costs.... [8] Implement strategies to lower PBGC premiums.... [9] Review your participant data.... [10] Audit forms and procedures."

BenefitsPro; free registration required

Considerations for Plan Sponsors Choosing Between a 403(b) or 401(k) Plan

"[S]ome of the primary factors that may help determine which type of retirement plan is best: Are there Highly Compensated employees? ... Is there a desire to offer 'exotic' investment choices? ... Is there a for-profit affiliate? ... Are there employees or other plan participants who pay New Jersey income taxes?"

Cammack Retirement Group

401(k) Plan Participants Report More Retirement Confidence

"Among low income households making $25,000 or less, 401(k) participants saved 10 times more on average than their peers without access to a plan and 20 times more than those who have access but choose not to participate.... Plan participants are more likely than eligible participants to report higher progress toward a variety of financial objectives such as reducing student loans (72% and 38%, respectively) and saving for emergencies (73% and 41%, respectively). Additionally, plan participants are twice as likely to save for retirement via traditional IRAs or other accounts."

T. Rowe Price

Benefits in General

[Guidance Overview]

Editor's Pick SECURE Act and Spending Bills: Impact on Plan Sponsors

"Starting with the 2021 Plan Year, 401(k) plan sponsors will need to track hours of service performed by part-time employees ... and will be required to permit certain part-time employees to make elective deferrals in a 401(k) Plan beginning in the 2024 Plan Year.... The SECURE Act increases by ten-fold the penalties in connection with failing to file an annual report for a qualified retirement plan.... [E]mployers should analyze their leave programs and make sure they do not want to make changes to take the tax credit in 2020.... [T]ax-exempt employers no longer need to include the value of qualified transportation fringe benefits in their UBIT."

Groom Law Group

Executive Compensation
and Nonqualified Plans

How Should ESG Performance Be Reflected in Executive Compensation?

"[M]ost companies that have incorporated ESG into their respective executive compensation programs have done so on a mostly symbolic basis ... [T]hose companies that want to make more than just a symbolic gesture should consider taking the following fundamental steps. [1] Select a measure that is right for you ... [2] Consider how much impact ESG should have ... [3] Consider using a [plus/minus (±)] modifier so it has more impact than a symbolic carve-out ... [4] Consider using discretion ... [5] Disclosure and communication."

Meridian Compensation Partners, LLC

Selected Discussions
on the BenefitsLink Message Boards

Reporting for Lost Participant Money Sent to PBGC

"PBGC covered plan -- terminated and closed. About a dozen participants whose benefit was sent to the PBGC per the lost participant rules. We're preparing 1099-Rs for the plan. The participants who elected something (lump sum cash, rollover, etc.) present no issues in our preparing the 1099-Rs. But I don't know how to report those whose benefit was transferred to the PBGC. [1] Do they get 1099-Rs? [2] If so, what code goes on the form?"

BenefitsLink Message Boards

SECURE Act and Credit Card-Based Loans

"Plain language of SECURE Act prohibits loans from a 401k plan using credit or debit cards, effective for loans made on or after 12/20/19. Despite this, plan sponsor issued loans to multiple participants after this date using credit card method (but has since ceased doing this). Any other remedy other than issuing 1099-MISC to these participants who got loans via credit card after 12/20/19?"

BenefitsLink Message Boards

403(b) Nondiscrimination Testing: Zero Match Unless 5% or More in Deferrals

"Client contributes 7% as employer contributions if employee contributes at least 5%. Less than 5% employees receive $0. In testing this plan for nondiscrimination, would it fall under ACP or 401(a)(4)?"

BenefitsLink Message Boards

Distribution Restrictions Applicable to SECURE Act Qualified Birth and Adoption Distribution

"Although it is intended that Qualified Birth and Adoption Distributions are permitted to be taken from any defined contribution plan (Code Section 72(t)(2)(H)(iv)), is anyone considering adopting one for a money purchase plan? According to Section 72(t)(2)(H)(vi)(IV), a Qualified Birth or Adoption Distribution is treated as meeting the distribution restrictions of specific Code sections (which apply to 401(k) plans, custodial 403(b)s, annuity contract 403(b)s and eligible deferred compensation plans). Does the latter section citation concern anyone who has been asked to consider whether to allow Qualified Birth and Adoption Distributions for a money purchase plan? How about as applied to a profit sharing plan without a 401(k) feature?"

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Press Releases

Most Popular Items in the Previous Issue

RMDs 2020: To Infinity and Beyond!
Milliman Retirement Town Hall, 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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