FIS Relius Education

401(k) Retirement Plan Administrator
Alliance Pension Consultants, LLC
in IL

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Essentials for the Benefits Practitioner: Experts' Guide to Employee Benefits Research
January 29, 2019 WEBCAST
American Bar Association Joint Committee on Employee Benefits [JCEB]

Essentials for the Benefits Practitioner: An Actuarial Update for ERISA Practitioners
February 26, 2019 WEBCAST
American Bar Association Joint Committee on Employee Benefits [JCEB]

Top Ten Issues with Takeover Plans and Proven Techniques for Success
February 28, 2019 WEBCAST
ASPPA [American Society of Pension Professionals & Actuaries]

Multiemployer Solvency - Joint Select Committee Report
April 17, 2019 WEBCAST
Conference of Consulting Actuaries

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Text of PBGC Final Regs: Allocation of Assets in Single-Employer Plans; Valuation of Benefits and Assets; Expected Retirement Age

"Under Section 4044.51(b) of the asset allocation regulation, early retirement benefits are valued based on the annuity starting date, if a retirement date has been selected, or the expected retirement age, if the annuity starting date is not known on the valuation date.... Appendix D of part 4044 contains tables to be used in determining the expected early retirement ages... This document amends appendix D to replace Table I?18 with Table I?19 to provide an updated correlation, appropriate for calendar year 2019, between the amount of a participant's benefit and the probability that the participant will elect early retirement. Table I?19 will be used to value benefits in plans with valuation dates during calendar year 2019." Pension Benefit Guaranty Corporation [PBGC]

New! ftwilliam.com Distribution Tracking Software

Our cutting-edge Distribution Tracking Software , built by retirement service providers, makes distribution preparation and tracking faster and more efficient. Know exactly where each distribution is so nothing slips through the cracks. Learn more!

The Ins and Outs of 403(b) Deferrals -- IRS Solves the Problem

"[T]here are many 403(b) plans ... that have operated for years in good faith under the in-and-out rule. Most 403(b) plans are now being restated onto preapproved documents, with a retroactive effective date of 2010. The plan language contradicts the plans' operations for nearly a decade, thereby running the risk that the IRS would consider those operations as failures to comply with Section 403(b) -- a potentially very costly result.... Notice 2018?95 addresses this issue in several ways."
Ferenczy Benefits Law Center

IRS Announces Transition Relief from the Once-In-Always-In Requirement for Excluding Part-Time Employees Under 403(b) Plans

"[F]or purposes of excluding part-time employees, the Final Regulations impose three distinct conditions that employers must satisfy for an employee to be excluded.... Many employers applied the first-year exclusion condition for an employee's first year and applied the preceding-year exclusion condition separately for each succeeding Exclusion Year, but did not apply the OIAI requirement to prevent an employee who failed to meet either the first-year exclusion condition or the preceding-year exclusion condition from being excluded in all subsequent Exclusion Years." Proskauer's ERISA Practice Center

PBGC's 2018 Annual Report Heralds Improved Financial Position

"On November 16, 2018, the [PBGC] released its Fiscal Year 2018 Annual Report , showing an $11.2 billion improvement in the multiemployer program and a $13.4 billion improvement in the single employer program. The single employer program, no longer in deficit, now has a $2.4 billion surplus.... [The authors] discuss what PBGC's FY2018 Annual Report tells us about the financial condition of and prospects for the single employer program and briefly discuss the financial condition of the multiemployer program."
October Three Consulting

401(k) Contribution Limits 2019: What Employers Need to Know

"Compensation thresholds for Key Employees and Highly Compensated Employees have changed for the first time since 2015 ... This means potentially substantial changes to your ACP, ADP, or Top-Heavy nondiscrimination tests. Employees who counted as HCE's the tax year before may actually be NHCE's for your future testing." ForUsAll

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40 Years On, 401(k) Contributions Climb to Record Levels

"As the 401(k) commemorates its 40th anniversary, ... employers are contributing an average of 5.1 percent of pay to their employees' 401(k) accounts ... This rate of contribution, combined with an average savings rate by participants of 7.1 percent, gives a total savings rate of more than 12 percent -- laying the foundation for better retirement outcomes, according to the 61st Annual Survey of Profit Sharing and 401(k) Plans." Plan Sponsor Council of America [PSCA]

Reasons 401(k) Plan Sponsors Are Smiling

"While recent headlines play up the recent downturn of the market, it can't hide the fact we've seen tremendous growth in most investment for quite some time.... The average cost and fees of the average 401k plan are at their lowest ever in the history of the 401k plan! ... Beyond the 'auto' provisions, other elements have caused savings to increase." Fiduciary News

What Makes a Reputable 401(k) Auditor?

"[1] Performs a reasonable amount of 401(k) audits per year, usually around 25 or more, but less may be sufficient based on the rest of [these] criteria ... . [2] Is a member of the Employee Benefit Plan Audit Quality Center (EBPAQC) through the [AICPA].... [3] Makes it a priority to have Continuing Professional Education (CPE) hours tailored toward employee benefit plan audits." Pooler CPA Group, LLC

How the DOL Fiduciary Rule Proposal Affected Fund Flows

"[T]he DOL fiduciary rule proposal was successful in mitigating lower returns resulting from conflicted advice in the two years after the rule was proposed.... While loads appeared to play a big role in directing fund flows from 1993 to 2014, they do not seem to affect fund flows in a statistically significant way from 2015 onward. In short, brokers may have been swayed to steer their clients to funds that shared more loads with them, but that does not seem to be the case anymore." Morningstar Advisor

Pension Funding Index, December 2018

"In November, the funded status of the 100 largest corporate defined benefit pension plans improved by $7 billion ... The deficit fell to $100 billion primarily due to a robust investment gain of 0.72% for the month. Pension plan liabilities improved marginally during November as the benchmark corporate bond interest rates used to value those liabilities slightly increased. As of November 30, the funded ratio increased to 93.7%, up from 93.2% at the end of October." Milliman

What to Do with Retirement Plan Accounts After You've Left Your Employer

"Generally you cannot keep contributing to an employer-sponsored plan, such as a 401(k) or 403(b), if you have left that employer, but you do have several options when it comes to managing those savings going forward -- and they can all impact the size of your future nest egg.... [1] Do nothing ... [2] Roll into your current employer's plan ... [3] Roll into an annuity ... [4] Roll into an IRA ... [5] Cash out your retirement balance." MassMutual

Ninth Circuit Recognizes Cat's Paw Liability in ERISA Retaliation Case; Fiduciary Claims Fail

"Applying the but-for cause standard, the Ninth Circuit stated that but for the trustee's orchestrating of a vote to place the director on administrative leave, the board would not have done so. In reaching this conclusion, the court recognized a 'cat's paw' theory of liability for retaliation and noted that at least four circuit courts have concluded that the theory is compatible with but-for causation[.]" [ Acosta v. Brain , No. 16-56529 (9th Cir. Dec. 4, 2018)]
Thomson Reuters Practical Law

Tweaked Year-End Tax Relief Package Includes Retirement and Health Care Provisions

"Items in this legislation include ... [1] Provisions from the House-passed Family Savings Act -- including expansion of 529 savings accounts -- as well as the Senate Finance Committee-passed Retirement Enhancement and Savings Act.... [2] Delays the Medical Device Tax for five years, delays the Health Insurance Tax for two years, delays the Cadillac Tax for one year, and permanently repeals the Tanning Tax."
Committee on Ways and Means, U.S. House of Representatives

Ramp Up Employee Engagement in 2019

"With the amount of time and budget employers expend to give the best benefits, it's imperative for HR make benefits as accessible as possible. And as the millennial workforce has shown us, the way to do that is make accessing benefits faster, less complicated and more relevant. The short answer? Utilize technology to streamline benefits." Hodges-Mace, LLC, via BenefitsPro (free registration required)

New Excise Taxes on Tax-Exempt Organizations

"Tax-exempt organizations should determine whether they are an applicable tax-exempt organization within the meaning of Code Section 4960 and, if so, identify their covered employees who are making more than one million dollars a year or who may be entitled to receive parachute payments following termination of employment.... [It] will be particularly important for these tax-exempt organizations to ensure they have taken appropriate steps to create a rebuttable presumption of reasonableness with respect to officer compensation." Ice Miller LLP

Initial IRS Guidance for Section 83(i) Provides Mostly Good News

"[ Notice 2018?97 ] clarifies that the 80% test cannot be satisfied based on a single-date snapshot of the employer's US workforce.... [E]mployers are on the hook to pay the required income tax withholding even if the employer cannot obtain the funds from an employee or former employee.... Because escrow of deferral stock is now mandatory, ... employers can prevent awards from being qualified equity grants by not entering into an escrow arrangement with the grantee."
Trucker Huss

IRS Guidance on Private Company Grants of Stock Options and RSUs Provides Limited Support

"To make qualified equity grants, the company must issue grants to at least 80% of employees in a single calendar year. The law does not provide for a cumulative basis that considers grants from prior years.... This makes it more difficult for early-stage startups, as they primarily make new-hire grants, not annual grants that can more easily fit into a calendar year." Bruce Brumberg, in Forbes

2019 Compensation Committee Handbook (PDF)

112 pages. "[This Handbook] is intended to help compensation committee members understand and comply with the duties imposed upon them.... [It describes] in some detail the concepts underlying a variety of areas within the bailiwick of compensation committees (for instance, the types of equity awards that are commonly granted and their respective tax treatment) and [provides a] perspective on some of the many decisions that compensation committees must make (for instance, the pros and cons of hiring a compensation consultant and the factors that go into that hiring decision)." Skadden

Why Should Retirement Plans Be Organized Around Employers?

An individual-account (defined-contribution) retirement plan doesn't share longevity and mortality risks. So that aspect isn't a reason to organize a plan around a particular employer. A recent survey suggests about 60% of those employers that maintain a retirement plan would drop it if a government-organized plan were available. Regarding many of the employers, a government-organized plan should have better scale and purchasing power to get services. And for many participants who would have been in micro or small plans, one's expense for investment funds should be no worse (and might be better). Setting aside one's personal interest in continued business or employment, what are the arguments for and against government-organized plans as an alternative to employer-organized plans?
BenefitsLink Message Boards

Discount on Amount of Premature Payment Under Long-Term Incentive Plan

We have a long term incentive plan where participants vest after 3 years. On vesting, they receive shares of Common Stock which they can't sell. If there is a Liquidity Event everyone gets paid for their shares. If they terminate before the Liquidity Event, they get paid 65% of the value of the shares (this reflects that there is no liquidity or marketability for the shares at that time). I think the discount in the event they terminate before the liquidity event is OK, but is there any guidance as to what an appropriate discount would be? Is 65% normal? The Company also wants the option at termination to either [1] pay for the shares in a lump sum, or [2] pay for the shares installments up to 5 years at their discretion. I think this violates 409A's time/form of payment rules -- do you agree? BenefitsLink Message Boards

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Press Releases

Cigna Expands Financial Wellness Services to Help Customers Improve Overall Well-Being Cigna

Custodia Financial Brings on Aaron Tabela as CMO to Make 401(k) Loan Defaults Top-of-Mind for Plan Sponsors Custodia Financial

Transamerica Selects Craig Haase as Director of Client Engagement for Retirement Plans Transamerica

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Most Popular Items in the Previous Issue

Surprise! You May Be Liable for Union Pension Plan Withdrawal Liability Frost Brown Todd LLC

IRS Provides Relief for 403(b) Plans Regarding Part-Time Employee Exception to Universal Availability Requirement Thomson Reuters Practical Law

Governmental Plan Status is Key Issue in Pending Lawsuit Ice Miller LLP