Retirement Plans Newsletter

February 3, 2020

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View job as Senior ESOP Retirement Account Administrator Senior ESOP Retirement Account Administrator  View details

Alerus Financial
East Lansing MI / Troy MI / Bedford NH / Albert Lea MN / Arden Hills MN

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Employee Benefits Security Administration [EBSA]
Chicago IL / Telecommute

View job as Supervisory Health Insurance Specialist Supervisory Health Insurance Specialist  View details

Centers for Medicare & Medicaid Services [CMS]
Bethesda MD / Telecommute

View job as Actuary Actuary  View details

Pension Benefit Guaranty Corporation [PBGC]
Washington DC / Telecommute

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[Official Guidance]

Text of PBGC Miscellaneous Corrections, Clarifications, and Improvements

72 pages. "The purpose of this regulatory action is to make miscellaneous technical corrections, clarifications, and improvements to several [PBGC] regulations.... The major provisions of this rulemaking amend PBGC’s regulations on:

  • Reportable Events and Certain Other Notification Requirements, by eliminating possible duplicative reporting of active participant reductions, clarifying when a liquidation event occurs and providing additional examples for active participant reduction, liquidation, and change in controlled group events. 
  • Annual Financial and Actuarial Information Reporting, by eliminating a requirement to submit individual financial information for each controlled group member, clarifying reporting waivers, and providing guidance on assumptions for valuing benefit liabilities for cash balance plans.
  • Termination of Single-Employer Plans, by providing more time to submit a complete PBGC Form 501 in the standard termination process.
  • Premium Rates, by expressly stating that a plan does not qualify for the variable-rate premium exemption for the year in which it completes a standard termination if it engages in a spinoff in the same year, clarifying the participant count date special rule for transactions (e.g., mergers and spinoffs), and modifying the circumstances under which the premium is prorated for a short plan year resulting from a plan’s termination."

Pension Benefit Guaranty Corporation [PBGC]

[Official Guidance]

Text of Instructions for 2019 IRS Form 8606: Nondeductible IRAs (PDF)

12 pages."Recent legislation has enacted special rules that may apply to your 2018 return and your 2019 return if you received a distribution from your IRA or other retirement plan and your main home was in certain Presidentially-declared disaster areas.... Special rules also may apply to your 2018 return and your 2019 return if you received a distribution to purchase or construct a main home in the 2018 or 2019 disaster area, but that home was not purchased or constructed because of the 2018 or 2019 disaster."

Internal Revenue Service [IRS]

[Guidance Overview]

SECURE Act: Extension of the Date for Adopting a New Employer-Sponsored Retirement Plan

"Effective for tax years beginning after December 31, 2019, the SECURE Act allows an employer to adopt a tax-qualified retirement plan for a tax year up until the due date, including extensions, of the tax return for the year. This change, which is intended to provide greater flexibility to small employers, comes with a couple of caveats[.]"

Blank Rome LLP

Untangling the SECURE Act's Retirement Plans: PEPs, ARPs, and MEPs

"In addition to creating PEPs, the SECURE Act includes a provision that creates an alternative to PEPs, ARPs, and MEPs by allowing consolidated Form 5500 reportings for certain single-employer plans. Specifically, the law directs the IRS and DOL to work together to modify Form 5500 so that all members of a group of plans may file a consolidated Form 5500."

Bloomberg Law

How to Develop and Implement a Strategic Plan for Your Retirement

"[D]eveloping and implementing a strategic plan will help you: [1] establish internal controls -- the mechanisms, rules, and procedures implemented by an entity to ensure the integrity of financial and accounting information, promote accountability and prevent fraud; [2] evaluate your financial advisor recommendations, and [3] make better financial decisions."

Ken Steiner, FSA Retired

[Sponsored]

Critical Challenges Facing Pension Withdrawal Liability

Sponsored by Lorman and BenefitsLink

March 26 webinar will help employers understand the nature of withdrawal liability, how to best analyze the risk of withdrawal liability, and how to reduce exposure to withdrawal liability. BenefitsLink discountLearn more


Should Tax Reform Change How You Save for Retirement?

"The most significant change to retirement plans under the Tax Cuts and Jobs Act was the elimination of account recharacterizations.... That means those looking to convert their retirement savings may want to change the timing of when they move their money. Now that RMDs have been pushed back to age 72, that may give retirees a window to do Roth conversions while they are in a lower tax bracket[.]"

U.S. News & World Report

FAS87 ASC715 Discount Rates and Moody's Rates, January 31, 2020

An unofficial monthly report of the Moody's Daily Long-term Corporate Bond Yield Averages and Moody's Daily Treasury Yield Averages (used as benchmarks by some corporate pension plans).

David Rigby, via BenefitsLink Message Boards

Selected Discussions
on the BenefitsLink Message Boards

Long Lost Deceased Participant -- What to Do Next?

"We have a profit sharing plan that accumulated quite a few terminated participants who have not been paid out. The plan is very odd in that it has a provision that says the accounts of terminated participants do not experience gains or losses; the accounts are frozen at the value as of the end of the plan year preceding the date that the person terminated employment. Does that mean the number is frozen for all time?"

BenefitsLink Message Boards

Delay in Processing Request for Rollover from 401(k) -- What Are the Damages?

"Participant left employment and attempted to rollover employer sponsored 401K to private account. Due to an administrative error (one by the employer and one by the TPA), the rollover did not occur until about 70 days after it was originally scheduled. Participant alleges that due to the error he lost a significant amount of money because he was unable to pursue the investment strategy recommended by the private account manager. I don't see any relief available under the plan document; the loss he claims is speculative and occurred outside the terms of the plan. Is this a 502(a)(3) claim, a nothing claim, or something in between?"

BenefitsLink Message Boards

Refund of Deferrals Made by Ineligible HCE

"An HCE started to make employee contributions in the middle of a plan year but the document says HCEs cannot participate. We are refunding the 2019 contribution in 2020. Do we treat this like a 402(g) refund such that the 2019 contribution would be taxable in 2019 and earnings would be taxable in 2020, or is everything taxable in the year of distribution (2020)?"

BenefitsLink Message Boards

Is a Safe Harbor QACA Match of 100% of 6% OK?

"Would a QACA match of 100% of the first 6% be classified as safe harbor to avoid ADP/ACP testing on an automatic enrollment/increase plan? I know safe harbor formulas can"t match on anything over 6%, but I generally only see QACA matches quoted as one of these 3 options:

  • Match 100% of first 1% and 50% of next 5%
  • Match 100% of first 3.5%
  • 3% non-elective for everyone (not a match)

Some sources say 3.5% is the maximum possible QACA match, which seems like a low limit for some employers that want to do more."

BenefitsLink Message Boards

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Press Releases

ECFC Names Christa Day as New Executive Director
ECFC [Employers Council on Flexible Compensation]

Most Popular Items in the Previous Issue

2020 Action Items for Retirement Plan Sponsors
Thomson Reuters Practical Law

March 31 Deadline for 403(b) Plan Updates
von Briesen & Roper, s.c.

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Lois Baker, J.D., President  loisbaker@benefitslink.com
David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
Holly Horton, Business Manager  hollyhorton@benefitslink.com

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BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2020 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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