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Continuing Education on Student Loans, The Retirement Tier and other DC Trends!
December 11, 2018 in IL
ASPPA Benefits Council [ABC] of Chicago

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What's the Effect of 2019 IRS Retirement Plan Limits?

"Employers may find that slightly fewer participants meet the new HCE compensation criteria, which could have two direct outcomes: [1] Plans may see marginally better nondiscrimination testing results ... [2] Fewer HCEs means that there are fewer participants who must receive 401(k) deferral refunds if the plan fails the ADP test.... Individuals could potentially get up to $37,000 from employer matching and profit sharing contributions ($56K-$19K) if they maximize their DC plan deductions." Van Iwaarden Associates

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Are you an experienced attorney who can handle issues involving private and government retirement plans? Join our no-fee National Pension Lawyers Network ! There is no obligation to take any case we refer to you. Join our network!

IRS Announces 2019 Cost of Living Adjustments to Retirement Plan Limits

"The key limits that increased include the compensation that is taken into account for plan purposes, the salary deferral limit, and the total amount that can be contributed on behalf of any participant in a defined contribution (including 401(k)) plan." Ferenczy Benefits Law Center

IRS Modifies VCP Submission Procedures

"[B]eginning April 1, 2019, the IRS will accept only online submissions, while any paper correspondence pertaining to the VCP will not be processed or returned.... Other changes as a result of [ Rev. Proc. 2018?52 ] are ... [1] All 457(b) plan submission requests must be through pay.gov ... [2] Minor language revisions related to user fees; and [3] Clarification of payment options for Audit CAP sanction payments."
Schneider Downs

DOL Opens Door to Wider MEP Availability; But How Much?

"While some expect the new DOL guidance to lead to more employers thinking seriously about establishing and participating in a retirement plan, some expectations may not be fully met.... [1] Investment fees have been declining, even for small plans, for various reasons ... [2] The industry's largest recordkeepers have wrung much -- if not all -- of the 'scalable' efficiencies and savings out of the system.... [3] [T]here could be more complexity in MEP plan administration. [4] Withdrawal from a MEP arrangement ... is not free of time and expense." Ascensus

IRS Updates Model Tax Notices for Eligible Rollover Distributions from Retirement Plans

"The new 2018 IRS guidance provides two separate model tax notices. One model tax notice reflects the rules for distributions that are not from a designated Roth account. The other reflects the rules for distributions that are from a designed Roth account.... The 2018 IRS guidance provides instructions on how to amend the model tax notices in Notice 2014?74 to reflect the modifications made in the revised model tax notices."
Findley

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Stock Drop Claims Based on Public Information Fail to Overcome Deference to Market Prices

"[C]ourts are now applying Dudenhoeffer to bar prudence claims in the worst of economic circumstances, creating uncertainty as to what claims can be made if all relevant public information is deemed incorporated into market prices, and risk-based claims can be dismissed as claims of inaccurate pricing ... [One] court acknowledged some of these limitations in a case involving stock funds liquidated at a substantial loss, expressing the view that market price does not capture all of the factors that must be considered by a prudent fiduciary." [ Kopp v. Klein , No. 16-11590 (5th Cir. June 27, 2018); In re SunEdison, Inc. ERISA Litigation , Nos. 16-2742, 16?2744 (S.D.N.Y. Aug. 6, 2018)]
Thomson Reuters / EBIA

ERISA: Thou Shall Not Pay Excessive Fees! (PDF)

"While there have been recent, yet expensive, victories for not-for-profit plan sponsors in the Section 403(b) space, plan fiduciaries should not get too comfortable. There were also early victories in the 401(k) cases that were filed in 2006.... The first crucial step is determining who are the plan fiduciaries ... There is a continuing duty to monitor investments or service providers after the selection process.... ERISA also dictates what you cannot do.... Recent 403(b) decisions [summarized]." CKR Law

SEC Considers New Annuity and Life Insurance Summary Disclosures

"SEC Chairman Jay Clayton says ... investors have emphasized their preference for clear and concise disclosure written in plain English.... According to Clayton, the summary documents 'would be a concise, reader?friendly summary of key facts about the contract.' More detailed information about the contract would have to be made available online, and an investor also could choose to have that information delivered in paper or electronic format at no charge." planadviser

Volatile Month Erases Funded Status Gains

"The funded status of corporate defined benefit plans fell sharply in October, driven by a selloff in global equity markets. After improving through the first three quarters of 2018, funded status has now retreated to near where it was at the beginning of the year." Russell Investments

October 2018 Pension Finance Update

"October was a scary month for pensions -- treats turned to tricks as stock markets gave back most of what they had earned this year. Interest rates 'rising from the dead', so to speak, softened the blow a bit, but both model plans ... suffered their worst month of the year, with traditional Plan A dropping almost 4% and the more conservative Plan B losing almost 2%. For the year, however, Plan A remains 5% up and Plan B is ahead a fraction of 1%[.]" October Three Consulting

FAS87 ASC715 Discount Rates and Moody's Rates, Updated October 31, 2018

An unofficial monthly report as of October 31, 2018, 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

Why We Still Need Open MEP Legislation

"In addition to permitting service providers to sponsor these plans and eliminating the one bad apple rule, we need clear rules regarding the fiduciary responsibilities of the various parties involved in running the MEP.... Fear of fiduciary responsibilities relating to plan investments and being sued for violating them is a deterrent to plan adoption by smaller employers, but right now, [bills pending in Congress] could leave adopting employers with some of that responsibility." Cohen & Buckmann, P.C.

Last-Day Employment Requirement for Contribution Allocation: But What If on a Furlough?

Plan has a last day requirement for employer contributions. If an employee is on furlough should that employee be treated as terminated for purposes of contribution accrual? BenefitsLink Message Boards

Voting on the Proposed Bylaw Changes for American Academy of Actuaries

I don't know how many Academy members frequent these message boards, but I would encourage all of you to seek out opinions related to the proposed changes before voting. The CCA and ASPPA have both put out information related to the changes. I am happy to post, if people haven't read anything about what is really going on. BenefitsLink Message Boards

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Press Releases

Butterfield Schechter Receives Ranking in 2019 Edition of "Best Law Firms" by U.S. News Butterfield Schechter LLP

Butterfield Schechter Receives Ranking in 2019 Edition of 'Best Law Firms' by U.S. News Butterfield Schechter LLP

Jonathan Medalie Amps Up Lockton's Employee Benefits Expertise in Nashville Lockton

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Most Popular Items in the Previous Issue

Text of IRS Notice 2018-83: 2019 Adjusted Limitations (PDF) Internal Revenue Service [IRS]

401(k) Deferral Limit Increases to $19,000 for 2019; IRA Limit Increases to $6,000 Internal Revenue Service [IRS]

Government Pension Plans in Focus: Is the Plan Actuarially Sound? (PDF) Findley