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Pre-Approved DB Plan Restatement Period Opened May 1, 2018

"If your defined benefit plan is currently on a pre-approved document or if you want to start using a pre-approved document, it is time to begin the plan restatement process." Warner Norcross & Judd LLP

The Preferred Plan Document System in the Industry

Streamline your plan document prep process by using ASC's automated Plan Document System. Create, manage and deliver customized prototype/volume submitter documents, SPD's, plan amendments and administrative forms to your clients. Learn More!

A Look at 401(k) Testing Corrections

"To correct a failed [ADP] test using the distribution option includes some extra steps that can be very confusing. This article discusses the process[.]" Benefit Resources Inc.

Socially Responsible Investing: What Plan Sponsors Need to Know

"While investing in companies that are socially and environmentally conscious is not a consideration for all active and passive investment strategies, for those retirement plan sponsors that try to match the moral and ethical expectations of their plan participants, the way in which they approach ESG-focused investment strategies can be a point of confusion." Cammack Retirement Group

The High Stakes of QDIA Selection

"For plan sponsors, the tremendous growth in assets, changing market conditions and balancing the needs of younger and older participants complicates selection and monitoring of these investments. Advisors can help by bringing plan demographics to the discussion and looking at the distribution of ages and account balances of a plan population." American Century Investments

Qualified Plan Loans -- Evil or Essential?

"Done right, plan loans should always be preferred over taxable payments -- including a hardship withdrawal while working or a pre-retirement, post-separation distribution. As a plan sponsor, your focus should be on ensuring: [1] Participants are well informed about plan loans -- con's and pro's, and [2] Plan provisions and service provider processes use current, 21st Century functionality, to do everything possible to ensure repayment." Plan Sponsor Council of America [PSCA]

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Text of Supreme Court Opinion: Railroad Stock Options Are Not 'Compensaion' Subject to Railroad Retirement Plan Tax (PDF)

23 pages. "[P]rivate railroads and their employees pay a tax based on employees' incomes. In return, the federal government provides employees a pension often more generous than the social security system supplies employees in other industries ... To encourage employee performance and to align employee and corporate goals, some railroads have (like employers in many fields) adopted employee stock option plans. The government argues that these stock options qualify as a form of 'compensation' subject to taxation under the Act.... When Congress adopted the Act in 1937, 'money' was understood as currency 'issued by [a] recognized authority as a medium of exchange.' Pretty obviously, stock options do not fall within that definition." [Wisconsin Central Ltd. v. U.S., No. 17-530 (S. Ct. June 21, 2018)] Supreme Court of the United States

Judge Strikes Down Kentucky's New Pension Reform as Unconstitutional

"[The judge] ruled that the General Assembly didn't follow Kentucky law by giving the bill three readings on three separate days in each chamber.... The controversial bill ... created [a] 401(k)/pension hybrid, which would decrease the cost of living pay increases for state employees, including teachers. It would have required teachers who were hired after Jan. 1, 2019, to work longer before being eligible for retirement." [ Commonwealth of Kentucky v. Bevin , Nos. 18-CI-379 and 18-CI-414 (Cir. Ct. Franklin Cty., June 20, 2018)]
The Hill

Connecticut Municipal Pensions: The Affordability Gap (PDF)

16 pages. "What has been overlooked ... is the challenge that the state's five largest cities by population -- Bridgeport, New Haven, Hartford, Stamford, and Waterbury -- face in paying for their own retirement benefit promises.... All five of these cities have promised hundreds of millions of dollars in benefits, a promise that is backed, ultimately, by their tax base. With the exception of Stamford, however, they all have weak economies and elevated rates of poverty." Manhattan Institute

Most Retirees Only Withdrawing Required Minimum Distribution

"Sixty-eight percent of retirees are only taking the required minimum distributions (RMDs) from their retirement accounts, [according to] a survey of more than 1,000 retirees with at least $100,000 in investable assets. Only 21% feel confident about taking money out of these accounts.... The survey also found that the median savings these retirees have is $839,000.... 25% said they were not sure if their retirement savings will last throughout their lifetime.... 25% fell short of their retirement savings goal by $250,000 or more." planadviser

Groom Law Group Urges IRS to Expand Determination Letter Program

"[Groom Law Group submitted letters] recommending consideration of the following plans as applicants for updated determination letters: [1] Plans with a cash balance or similar benefit formula whose last determination letter was before the effective date of the final IRS hybrid plan regulations. [2] Plans that address income replacement and inflationary pressures through adoption of a variable annuity feature. [3] Traditional pension plans that convert to a cash balance-type formula. [4] Plans that undergo major changes that otherwise make certain compliance testing unnecessary -- such as safe harbor 401(k) plans. [5] Plan changes accompanying significant workforce adjustments, such as downsizings or corporate separations. [6] Corrective plan amendments submitted as part of an EPCRS submission. [7] Governmental plans where there has been a significant change in the governing state or local law." Groom Law Group

ARA Calls for Electronic Delivery Update to 401(k) Disclosure Default

"Current regulations requiring paper delivery of participant 401(k) information can cost investors between $350-500 million per year, which can reduce the average account balance by 2.4% over a 40-year work life.... E-delivery improves access for the visually impaired and others with disabilities.... E-delivery improves access and the quality of information for those who speak English as a second language.... Internet access -- especially among DC account holders -- is nearly universal." American Retirement Association

Filings Due July 31: Forms 5500 and 8955-SSA

"Calendar year employee benefit plans are generally required to file the 2017 Form 5500 and Form 8955-SSA by July 31, 2018 unless an extension Form 5558 is timely filed with the [IRS] ... Automatic extension of this deadline is available in certain situations if the employer's federal income tax return has been granted additional time to file and the plan year corresponds with the same 12-month period.... Form 5558 is limited to the extension of a single plan." PKF O'Connor Davies

Simple Steps to a Stress-Free Enrollment

"[1] Consider the feedback you got on last year's campaign.... [2] Define success and then measure it.... [3] Cut the clutter.... [4] Know your purpose.... [5] Use straight talk.... [6] Start early and communicate often.... [7] Go for variety." Milliman Retirement Town Hall

Deal-Breaking M&A Issues Related to Employee Benefit Plans and Executive Compensation

"[S]ellers may defuse risks and streamline negotiations through proactive pre-sale planning.... [B]uyers are able to maximize their deal-related protections (and their post-closing alternatives) by assuring early stage attention to the items listed ... [This] list merely illustrates the range of benefit plan issues that may interfere with a change in corporate control (CIC) transaction. Disclosure schedules will often suggest other material issues, such as benefit plan defects and potential liabilities." The Wagner Law Group

Blockchain Tokens as Compensation

"[Tokens] are being used like equity or phantom-equity awards, granted as compensation for past or future services. They may be subject to vesting based on continued service or achievement of performance targets, and acceleration of vesting can be triggered based on designated events, such as the occurrence of a change of control transaction, the termination of an employee without cause, or the achievement of technical milestones." Jackson Lewis P.C.

Mid-Year Termination of Safe Harbor Top Heavy Plan

Client has a top-heavy plan that uses the 3% Safe Harbor QNEC. The plan year and limitation year are the calendar year. If the client properly terminates the plan mid-year in 2018 (e.g, plan passes ADP etc.), would the top heavy contribution be required on compensation accrued up until the date of the plan termination or compensation paid for the entire 2018 calendar year? BenefitsLink Message Boards

Maximum Deferrals During Short Plan Year

Client has initial plan year of 9/1/2017 through 12/31/2017. Are participant deferrals capped pro rata? Or, if a participant defers $18,000 during the 4 months, is it OK because the $18,000 is an annual limit per participant? BenefitsLink Message Boards

What Is 'Retired' for Purposes of Required Minimum Distributions?

Treas. Reg. sec. 1.409(a)(9)-2 provides that required minimum distributions from a qualified plan (e.g. 401(k)) must begin April 1 of the calendar year following the later of the calendar year in which the employee turns 70-1/2 or the calendar year in which the employee retires from employment with the employer. The term 'retirement' is not defined for purposes of 401(a)(9). If a law firm partner is still technically a partner in a firm, but doing hardly any work, is he considered retired? Or does retirement mean actual total termination of employment? BenefitsLink Message Boards

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