Senior Compliance Analyst
Insperity
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CEP Consultants, Inc.
in NY

Employee Benefits Associate
Shipman & Goodwin LLP
in CT

Client Service Center Associate
Alerus Financial
in MN

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Text of IRS Proposed Regs: User Fees Relating to Enrolled Agents and Enrolled Retirement Plan Agents

"The proposed regulations remove the initial enrollment user fee for enrolled retirement plan agents because the IRS no longer offers initial enrollment as an enrolled retirement plan agent. The proposed regulations also increase the amount of the renewal user fee for enrolled retirement plan agents from $30 to $67. In addition, the proposed regulations increase the amount of both the enrollment and renewal user fee for enrolled agents from $30 to $67." Internal Revenue Service [IRS]

The Inside Scoop on Pension Plan Termination

We'll look at Findley's PlanTerm™ Financial Modeler , how to prepare the participant data needed, and tips to build consensus among stakeholders. Register now for this December 5 webinar.

Text of 2018 IRS Form 5329: Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts (PDF)

"If you only owe the additional 10% tax on early distributions, you may be able to report this tax directly on Form 1040, line 59, or Form 1040NR, line 57, without filing Form 5329.... Complete this part if you took a taxable distribution (other than a qualified 2017 disaster distribution) before you reached age 59?1/2 from a qualified retirement plan ... (unless you are reporting this tax directly on Form 1040 or Form 1040NR). You may also have to complete this part to indicate that you qualify for an exception to the additional tax on early distributions or for certain Roth IRA distributions." Internal Revenue Service [IRS]

PBGC Annual Report 2018: Single-Employer Program Healthy, Multiemployer Program Ailing

"The sound financial condition of our insurance programs, Single-Employer and Multiemployer, is vital for us to meet our mission. This year's report shows that the financial condition of these two programs remains in stark contrast. The financial status of the Single-Employer Program shows continuous improvement and reached a positive net position this year. However, the Multiemployer Program remains in deep deficit and we project that under current law it will run out of funds within the next several years."
Pension Benefit Guaranty Corporation [PBGC]

Your Plan Will Face a Cyberattack -- Here's How to Prepare (PDF)

9 pages. "[T]he focus of cyberattacks in the defined contribution world has shifted from hardened targets like recordkeepers and custodians to plan sponsors, which often lack the extensive cybersecurity defenses of their vendors.... A cybersecurity framework (CSF) provides guidance for how organizations can assess and improve their ability to prevent, detect, and respond to cyberattacks. There are a variety of frameworks that plan sponsors and recordkeeping vendors can use to manage their risk[.]" Callan

Year-End Changes for 401(k) Plans

"The IRS has just issued proposed regulations for 401(k) and 403(b) plans that can be used for planning and changes for 2019 and 2020. Not all changes are required; optional ones can have effective dates selected by the employer. Careful analysis can help employers to determine which changes to adopt and when.... [1] Hardship distributions ... [2] New general standard for hardship withdrawals ... [3] Other plan changes ... [4] Updating tax effects notice." Nelson Mullins

Join the Pension Rights Center's no-fee lawyer referral service!

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!

Rethinking 401(k) Matching Contributions -- A Match Not Made In Heaven!

"[N]on-elective contributions have a clear advantage over matching contributions. Employers can generally choose who gets a contribution and the amount of the contribution may be based on job performance (individual, company or a combination of the two) or other criteria irrespective of whether the employee contributes to the employer's retirement plan. In addition, the criteria for receiving a contribution and the amount of the contribution does not need to be described in the plan, and may change from year to year without having to make any change to the plan document." Miller Johnson

Attributes of a Successful Retirement Plan Program

"Giving participants too many options or using complicated language can cause paralysis in decision-making.... Consider implementing financial wellness education so employees understand basic financial knowledge.... Features like post-retirement investment options, allowing for partial withdrawals and investment consultations will entice retiring employees to leave their investment growing.... Evaluating your current QDIA, usually a target date fund family, is crucial because this is the default option for those that are auto-enrolled." PlanPILOT

DOL Guidance Addresses Fiduciary Status and Fees Under Program Facilitating Portability of Automatic Rollovers

"[F]iduciaries of distributing plans will remain fully responsible for their decision to participate in the program and thus will need to carefully consider its cost and features compared to other default IRA options. As the benefits of the program may depend significantly on the provider's success in enlisting plans and recordkeepers willing to share data about plan participation, this cost-benefit analysis may be especially difficult, particularly for early adopters." Thomson Reuters / EBIA

Key Considerations with Alternative Investments for Pension Plans (PDF)

16 presentation slides. "Problems if a fund holds ERISA plan assets: [1] Manager of fund typically must be appointed 'investment manager' under ERISA and acknowledge its status as a fiduciary; [2] ERISA fiduciary standard of conduct/'highest standard under law'; [3] Risk of prohibited transactions and excise taxes; [4] Personal liability of plan fiduciary/co-fiduciary liability; [5] Manager's conflict of interest problems; [6] Performance fees raise conflict and self-dealing issues; [7] Fidelity bond for ERISA fiduciaries; [8] 'Indicia of Ownership' of plan assets must be in the United States." McDermott Will & Emery

Recognizing That All 'Rates of Return' Are Not the Same

"[I]ndividuals (or plans) that are in 'pay-out mode' can experience dramatically different results in their remaining portfolios -- even though they are all obtaining the same 'average rate of return.' ... [D]uring a 'distribution period' it is better to take loss in return later, when it will have a lesser impact on you overall savings.... Portfolio re-allocation may not be the same as portfolio insulation.... Be aware of, and honest about, your investment horizon." Best Best & Krieger LLP

Managed Account Services: Issues and Considerations for Retirement Plan Sponsors

"Although managed account services are available to participants in the majority of defined contribution plans, utilization rates have historically remained low.... In addition to improving retirement income outcomes, managed account services also offer an additional source of revenue for retirement plan service providers ... [F]ee schedules may vary, even with the same provider.... [L]ower administrative fees may result if a plan sponsor selects one or more proprietary fund options." Bloomberg BNA

Senate Finance Committee Approves PBGC Director Nominee

"Gordon Hartogensis was approved Thursday by the Senate Finance Committee to serve as director of the [PBGC] by a bipartisan 25?2 vote.... Committee Chairman Orrin Hatch, R-Utah, noted that Mr. Hartogensis' nomination 'comes during a precarious time for the PBGC,' as it faces a crisis with many multiemployer pension plans and its own insurance program for them." Pensions & Investments

Proposed Legislation Would Enhance Savings Tax Credit and Resurrect myRA

"The proposed legislation would give up to $500 a year for middle-class workers saving through 401(k) plans or IRAs and enhance the saver's credit by making a full 50% credit available to taxpayers making up to $32,500 a year, with that credit directly contributed into the saver's retirement plan or IRA.... People saving through state or local government retirement savings programs like OregonSaves would also be eligible for the matching contributions." Pensions & Investments

Checklist to Improve Your ESOP Ownership Culture (PDF)

"Regardless if your organization is a new or mature ESOP, it's never too late to assess the culture and communications to determine if there's opportunity for improvement.... Use [these] questions ... to provoke discussion at your next leadership meeting." Findley

Text of OIG Report: Audit of the PBGC's Fiscal Year 2018 and 2017 Financial Statements (PDF)

77 pages. "The financial statements present fairly, in all material respects, the financial position of the Single-Employer and Multiemployer Program Funds administered by the PBGC as of September 30, 2018 and 2017, and the results of their operations and cash flows for the years then ended ... PBGC maintained, in all material respects, effective internal control over financial reporting as of September 30, 2018 ... PBGC may not have been in compliance with law and regulation due to a potential violation of the Antideficiency Act determined after guidance from GAO relative to the recording of obligations for multi-year leases." Office of Inspector General, Pension Benefit Guaranty Corporation [PBGC]

New Draft Form 5500, Instructions and Schedules Issued

"[S]ome compliance questions are back on Schedule H and Schedule I and on the abridged version of the Form 5500-SF. The instructions indicate that answers to the compliance questions are mandatory.... [T]he penalty for failing to file a complete or accurate Form 5500 is now $2,140 per day." Winstead PC

What Are the Content Requirements for a Disability Claim Denial Notice?

"Specific reasons, plan provisions, and additional information ... Discussion of the decision.... Scientific or clinical judgment.... Internal rules and guidelines.... Right to obtain documents.... Appeals and right to sue." Thomson Reuters / EBIA

IRS Announces Benefit Plan Limits for 2019 (PDF)

2-page printable chart shows limits for 2018 and 2019, as well as important deadlines for 2019. Lockton

Penalty for Early Termination of a One-Person Defined Benefit Plan

I have a small business LLC S-Corp. I've sponsored a one-person defined benefit plan for 5 years. Funded until 2017. In 2018, I am unable to fund the required amount due to significant personal losses and am considering closing the LLC. My retirement plan folks say there would be an excise penalty and that I'd still need to fund 2018. What is the penalty? BenefitsLink Message Boards

The 'Qualified Business Income' Deduction

If someone qualifies for this, it's a deduction taken on the individual owner's 1040, right? In other words, for an unincorporated owner you would calculate Schedule C income and the corresponding contribution as usual, and then, when they file a 1040, the owner would take an additional deduction from the otherwise taxable income (if the owner qualifies). BenefitsLink Message Boards

Loan Default Not Reported on a 1099R

I have a client whose assets are in a brokerage account. The owner took a loan and never made payments. They apparently never intended to and now want it defaulted. I don't have confidence she is going to have a 1099R produced even though she said that's her intention. What are the ramifications/fixes for a defaulted loan on a brokerage account when a 1099R is not done? BenefitsLink Message Boards

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Press Releases

Sherrie Boutwell Inducted as a Fellow of the American College of Employee Benefits Counsel Boutwell Fay LLP

Newport Group Acquires Kidder Benefits Consultants Newport Group, The

Northern Trust Asset Management Strengthens Public Funds and Taft-Hartley Team Northern Trust

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Most Popular Items in the Previous Issue

Fiduciary Liability Claim Trends (PDF) Lockton

Select Limits, Hardship Withdrawal Changes and a Rollover Automation Option Winstead PC

Nonqualified Deferred Compensation Rules for Tax-Indifferent Entities Under Section 457A Venable LLP