401(k) Conversion / Installation Specialist
Professional Capital Services
in PA

Northeast Territory Sales Director
PenChecks Trust
in CT, DC, DE, MA, MD, ME, NH, NJ, NY, PA, RI

Medical Claims Processor and Benefits Specialist
Painters District Council #30 Benefits Office
in IL

Call Center Manager
Newport Group
in CA

Retirement Plan Marketing Specialist
Stifel Financial
in MO

Divisional VP, Strategic Relationship Management
John Hancock Retirement Plan Services
in MI, PA, Telecommute

Health Benefits Manager
The Segal Group
in CA

Benefits Manager
Carpenters Southwest Administrative Corporation
in CA

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Who Is a Plan Fiduciary? Is it Me?
February 1, 2018 in AL
Ogletree Deakins

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IRS FAQs on Recharacterization of Roth Rollovers and Conversions
"A Roth IRA conversion made in 2017 may be recharacterized as a contribution to a traditional IRA if the recharacterization is made by October 15, 2018. A Roth IRA conversion made on or after January 1, 2018, cannot be recharacterized." [Updated Jan. 18, 2018 to clarify effective date of the Tax Cuts and Jobs Act.]
Internal Revenue Service [IRS]

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Fiduciary Rule Myths
"The Impartial Conduct Standards have three requirements ... Nowhere in these Standards is there an explicit requirement to recommend the 'lowest cost' investments. Some may argue that the best interest standard or the reasonable compensation standard imposes that requirement; however, the DOL has specifically rejected that argument."
Drinker Biddle

Puerto Rico Treasury Issues More Guidance on Eligible Distributions to Participants Affected by Hurricane Maria (PDF)
"Administrative Determination No. 18-02 ... clarifies that the term 'Eligible Distributions' includes distributions of employee and employer contributions (including after-tax contributions), earnings, and amounts for which the tax was pre-paid ... In addition, AD 18-02, provides that in calculating the $10,000 cap on Tax Exempt Eligible Distribution, you must first use all Eligible Distributions of taxable amounts (e.g., contributions and earnings) made in year 2017, and then the Eligible Distributions of Exempt Amounts made in such year."
Groom Law Group

DB Sponsors: Consider Accelerating Contributions for 2017 Plan Year Amid Tax Reform
"[Consider] a sponsoring company having $100 million in cash that it intends to contribute to the pension plan over the next few years, starting with 2018. Assuming a new, lowered 21% tax rate, this roughly would mean they could reduce their tax burden by $21 million over that time period ... But if the company accelerated those contributions to the plan to be attributable to 2017, under a 35% tax rate, then the reduction in tax could be $35 million, a $14 million tax savings."
HR Daily Advisor

IRS Publication 3998: Choosing a Retirement Solution for Your Small Business (PDF)
Rev. Oct. 2017. "By starting a retirement savings plan, you will help your employees save for the future. Retirement plans may also help you attract and retain qualified employees, and they offer tax savings to your business. You will help secure your own retirement as well. You can establish a plan even if you are self-employed."
Internal Revenue Service [IRS]

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IRS Publication 571: Tax-Sheltered Annuity Plans (403(b) Plans) for Employees of Public Schools and Certain Tax-Exempt Organizations (PDF)
22 pages; rev. Jan. 2018. "What's New for 2018: [1] Retirement savings contributions credit.... [2] Limit on elective deferrals.... [3] Limit on annual additions.... [4] Self certification available for missed rollover deadline."
Internal Revenue Service [IRS]

DC Plan Sponsors Continue Focus on Fees
"Sponsors, by a wide margin, cited reviewing plan fees as the most important step they took in improving their fiduciary position in 2017, and 60% of survey respondents said they are somewhat or very likely to conduct a fee survey in 2018.... Nearly three quarters of non-government plans used auto enrollment; four out of five plans with auto enrollment also offered automatic contribution escalation; and plan sponsors reported the highest average auto enroll default contribution rate in the survey's history (4.6%)."
Callan Associates

Proliferation of Target Date Fund Varieties Can Confuse Many Plan Sponsors
"Competing TDF providers ... recognize that many participants and plan sponsors will simply compare investment returns of various TDFs with the same target date. Without more research, prospective participants and sponsors may not understand why competing TDFs might have divergent investment performances over a particular time period because of their different glide paths."
Ostrow Reisin Berk & Abrams, Ltd.

How to Quantify Retirement Readiness
"[It] is of paramount importance that organizations: Understand what constitutes retirement readiness and how it affects the business, Identify which employees appear to be on track for timely retirement and which do not, and Take steps to help employees financially prepare for retirement.... A retirement-readiness analysis should include one or more of the following metrics: Replacement ratio, Wealth-accumulation target, and/or Retirement-readiness grade."
Sibson Consulting

Stanford Center for Longevity Proposes New Strategy for Retirement Income
"For the solutions they analyzed, the solutions using the [IRS] required minimum distribution and fixed index annuities did the best job of keeping up with inflation. The analyses also show retirement income solutions with a high withdrawal percentage -- 7% -- naturally spend down savings more quickly than a 3% withdrawal rate."
planadviser

DOL Changes Disability Claims and Appeals Regs
"If your self-insured STD benefit is, in fact, subject to ERISA, you'll need to amend your plan documents.... If your self-insured STD benefit is, in fact, subject to ERISA and you are making disability determinations in-house, consider looking for an advise-to-pay vendor.... Review the definition of 'disability' or 'disabled' in your other ERISA-covered benefit plans (e.g., profit-sharing, 401(k), defined benefit, non-qualified deferred comp, top-hat, etc.) and consider whether and to what extent you should change that definition."
ERISAfire

Supreme Court Again Denies Review of ERISA Forum Selection Clauses
"This is the third time in as many years that the high court has denied review of this issue.... The Solicitor General sided with the [DOL], which has filed amicus briefs in support of the participants in each of the appellate cases. However, the Solicitor General recommended that the issue percolate more in the appellate courts. Since then, the Eighth and Seventh Circuits have issued orders that align with the Sixth Circuit. And the Supreme Court has denied review of each of the decisions."
Greensfelder

When It Comes to Funding Pension or OPEB Liabilities, Not All Section 115 Trusts Are Created Equal
"With the advent of side-fund arrangements, we now have two types of 115 trusts: those designed to fund and pay pension and OPEB benefits directly and those designed to set aside monies from the general assets of the employer for future use toward pension or OPEB obligations. Much of the current confusion regarding whether 115 trust assets can be used to offset pension or OPEB liabilities for GASB purposes stems from proposed guidance issued by the GASB board in early 2017."
Best Best & Krieger LLP

HSA 'Chicken' or 401(k) 'Nest Egg' -- Which Comes First?
"The important question to ask may be how to prioritize for those who have limited ability to save.... The answer depends, in part, on a number of factors, including but not limited to: geographic location, the match (if any) in the 401k plan, whether the 401k plan offers a robust loan feature, whether there is an employer contribution to the HSA and if so, whether it is in the form of a match or if it meets the comparability rules."
Plan Sponsor Council of America [PSCA]

Tax-Exempt Organizations Face New 21% Excise Tax on Compensation in Excess of $1 Million
"When setting compensation or agreeing to provide severance payments, Tax-Exempt Organizations ... may offer lower compensation in recognition of the tax, cap compensation to avoid the tax, or maintain the right to modify or reduce compensation to the extent needed to avoid the tax.... Tax-Exempt Organizations may require the departing employee to cover the excise tax amount out of his or her parachute payment."
Schulte Roth & Zabel LLP

Exclude Compensation Earned While Working at Non-participating Division of the Plan Sponsor?
Employee works at 2 different division within a company. At Division A, he earns $10,000 for the year. At Division B, he earns $20,000 for the year. He's already met the plan's eligibility/entry date requirements. The plan document excludes Division A from the plan. The company makes a 3% Safe Harbor Profit Sharing and a 2% Profit Sharing contribution. What compensation would be counted for these contribution percentages? The whole $30,000, or just the $20,000 from Division B? The plan document is unclear.
BenefitsLink Message Boards

Termination of Employment -- "Retired" versus "Quit"
We recently received a census from a client where she indicated that all of the terminated employees had separated from service. No deaths, no disabilities, no retirement. However, one person who quit is over age 65 and had 5 years of service. Our computer software is picking him up as retired instead of just separated from service which means he will be eligible for a match and a profit sharing contribution that he would not otherwise have received. Does it matter that the employer considers him to be a person who merely quit? Is it correct that once a person has satisfied the age 65 and 5 years of service this plan requires, and then leaves, that he is "retired," regardless of the circumstances surrounding his termination of employment?
BenefitsLink Message Boards

No VCP Response for RMD Failure; What to Tell Distributee?
We filed a VCP for late RMDs in May. Case has not been assigned. Waiver of excise tax requested. B what should the plan administrator tell the distributee regarding his income tax return, which is due April 15, 2018? It's doubtful we'll have an answer from IRS by then. We're considering giving him a letter to attach to his tax return.
BenefitsLink Message Boards

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