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Adopting Qualified Pension or Profit-Sharing Plans: Key Planning Considerations for Plan Sponsors & Administrators
September 18, 2018 WEBCAST
Strafford

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Text of IRS Proposed Regs: Section 199A Qualified Business Income Deduction (PDF)

184 pages. "This document contains proposed regulations concerning the deduction for qualified business income under section 199A of the Internal Revenue Code.... Section 199A provides a deduction of up to 20 percent of income from a domestic business operated as a sole proprietorship or through a partnership, S corporation, trust, or estate ... The purpose of these proposed regulations is to provide taxpayers with computational, definitional, and anti-avoidance guidance regarding the application of section 199A.... This document also provides notice of a public hearing on these proposed regulations."
Internal Revenue Service [IRS]

NEW - ftwilliam.com Distribution Tracking Software

Our new Distribution Tracking Software automates all tasks associated with processing distributions. Our built in accountability tools streamline communication and data collection and will make distribution processing easier than ever. Learn More!

Text of IRS Notice 2018-64: Methods for Calculating W-2 Wages for Purposes of Section 199A (PDF)

"This notice contains a proposed revenue procedure that provides guidance on methods for calculating W-2 wages for purposes of section 199A of the Internal Revenue Code and proposed Sections 1.199A-1 through 1.199A-6 of the Income Tax Regulations ... Specifically, this Notice provides methods for calculating W-2 wages [1] for purposes of section 199A(b)(2), which, for certain taxpayers, provides a limitation based on W-2 wages to the amount of the deduction for qualified business income under section 199A(a); and [2] for purposes of section 199A(b)(7), which, for certain specified agricultural and horticultural cooperative patrons, provides a reduction to the section 199A(a) deduction based on W-2 wages."
Internal Revenue Service [IRS]

SEC Proposed 'Modernization' of Fund Report Delivery Rules Impacts Both 403(b) and 401(a) Plans

"One of the more difficult problems arising from the use of omnibus trading platforms by trust companies is the ability to delivery fund reports (including things like proxy materials to the fiduciaries of these plans).... The transfer agent usually passes on this responsibility to the omnibus platform, and the omnibus platform passes on this responsibility to the trust company or other fiduciary.... [T]he electronic delivery rules [ proposed by the SEC ], if implemented, will help make the current system work more reliably."
Business of Benefits

New Disability Claims Procedures Affect Retirement Plans and Deferred Compensation Plans Too

"A retirement plan that determines a participant's 'disability' by requiring that the participant be entitled to benefits under the employer's long term disability plan or qualify for Social Security disability benefits does not have to be amended to comply with the Final Rule.... However, a retirement plan under which the plan sponsor or plan administrator must itself determine a participant's disability either will have to adopt a new definition of disability that eliminates all discretion or adjust its claims procedures to comply with the Final Rule." Verrill Dana LLP

Fifth Circuit Affirms Dismissal of ERISA Stock Drop Action

"The Fifth Circuit first rejected the participant's argument that where, as here, an imprudence claim was based on publicly available information, he need not prove 'special circumstances' if the underlying allegations are that the stock was too risky as opposed to artificially inflated. The Fifth Circuit also disagreed with the participant's assertion that defendants' alleged fraud constituted a 'special circumstance,' because the alleged fraud was 'by definition not public information' and the participant did not allege how the alleged fraud would affect the stock's market price in light of all public information." [ Kopp v. Klein ,No. 16-11590 (5th Cir. June 27, 2018)]
Proskauer's ERISA Practice Center

SPARK Forum - November 4-6, 2018 -- The Breakers, Palm Beach, FL

Join us at the retirement services industry's leading event for top marketing, sales, administration and record keeping professionals. Comprehensive agenda includes topics of interest to Record Keepers, 401(k) Plan Providers, Financial Advisors and Cyber Security Professionals.

2018 Defined Contribution Plan Participant Survey Findings

"[A]lthough DC plan participants are making progress and gaining confidence overall, more work is needed to: ... Assess participants' confidence in their ability to plan for retirement.... Help participants overcome inertia by putting them on the right path from the start.... Simplify investing to improve retirement outcomes." J.P. Morgan Asset Management

U.S. Multiemployer Pension Plan Withdrawal Liability Basics and Collectibility (PDF)

12 pages. "Federal law allows various methods for determining withdrawal liability ... To mitigate the withdrawing employer's burden to pay a large withdrawal liability all at once, the law allows payment over time. In general, the annual payment is intended to approximate the withdrawing employer's history of annual contributions to the plan. In reality, ... actual withdrawal liability payments are typically greater than the employer's history of contributions." Society of Actuaries

Retirees Struggle to Locate Billions in Lost Pensions as Government Looks for Solutions

"An estimated $156 billion in private 'defined benefit' pensions ... are unclaimed, according to the Pension Action Center ... Pension plans are transferred during corporate buyouts and restructuring. Employees change addresses and last names, becoming unreachable. In some cases, workers are never notified of their pension to begin with or forget they are entitled to benefits. Part of the problem is that it is not clear what employers are obligated to do to find 'missing participants'[.]" WGBH

ARA Letter to EBSA Requesting Clarification of Fiduciary Status for Participant Rollover Recommendations by Plan Investment Advisers (PDF)

"If [ Advisory Opinion 2005-23A ] is applicable, it suggests that fiduciary investment advisers to plans -- advisers that already act in the best interest of participants, and that have long-term relationships with their plan clients -- are ERISA fiduciaries when providing rollover recommendations to participants in those plans but are in a legal 'grey area' in which a prohibited transaction may or may not apply. By contrast, unrelated persons selling financial products in rollover transactions to those same participants are not ERISA fiduciaries and are not subject to the prohibited transaction rules."
American Retirement Association [ARA]

'Windfall' Recovery No Defense Under ERISA to Funds' Claim for Unpaid Contributions

"The employer ... had maintained health insurance and a 401(k) plan for its nonunion employees [outside the funds to which it had not made contributions]. These alternative benefits should offset the total award to the funds, the employer said. Otherwise, the employer reasoned, the funds would receive an unjust windfall recovery of contributions on behalf of employees for whom they had provided no benefits. The appellate court rejected this argument and affirmed the lower court's judgment in favor of the funds." [ Kelly v. Gas Field Specialists, Inc. , No. 17-2654 (3d Cir. June 19, 2018)]
Wolters Kluwer Law & Business

SEC Doubles Disclosure Obligation Threshold, Seeks to Modernize Compensatory Securities Offerings (PDF)

"Issuers relying on the Rule 701 exemption to offer securities under a compensatory arrangement are required to deliver additional disclosures ... to investors if the amounts offered exceed a set threshold.... Congress mandated the recent change to address concerns that the prior $5 million threshold increased the costs associated with using company stock to compensate employees and put non-reporting companies at risk of having to disclose confidential financial information." Debevoise & Plimpton LLP

When Is 'Loss Date' for Late Deferrals?

When calculating earnings, what are you using for the 'loss date'? I've seen some people use the pay date. Others use the date that is 7 business days later. Even others go out until the 15th business day of the following month. From VFCP: "The Loss Date for such contributions is the date on which each contribution reasonably could have been segregated from the employers general assets. In no event shall the Loss Date for such contributions be later than the applicable maximum time period described in 29 CFR 2510.3." So, what date are you using? BenefitsLink Message Boards

Can 401(k) Plan Create LLC with Plan Sponsor?

X is sponsor of 401k plan (solo; husband and wife). X wants to invest both personal and plan money in a managed account with a major broker. The account requires a minimum investment of $500,000. X would like to form an LLC -- 40% owned by 401k and 60% owned individually -- in order to make this investment. My understanding is that it would not be a prohibited transaction for a plan and a party-in-interest to form a new entity and have that new entity make investments, which would naturally split according to membership interests, but I haven't been able to find any support or prohibition thus far. BenefitsLink Message Boards

Quarterly Participant Notice for Self-Directed 401(k) Plans as to Multiple Statements Involved?

Is there a requirement that participants must receive a notice every quarter that states that info regarding their account may be provided to them via multiple statements (e.g., a statement from the investment company and one from the TPA)? BenefitsLink Message Boards

WARN Benefit Can Reduce Severance Benefit?

If a company has a severance plan in place that is outlined in the employee handbook, and the WARN act is initiated, can the employer reduce the amount of an employee's severance benefit by the amount of the WARN benefit? BenefitsLink Message Boards

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Press Releases

ECFC Kicks Off 2018 Annual Symposium with New Website Employers Council on Flexible Compensation

TRA Hires a Texas Regional Sales Consultant The Retirement Advantage [TRA]

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