Associate Director of Pension Benefits
Sheet Metal Workers' National Pension Fund
in VA

Sr Retirement Benefit Analyst - Defined Benefit Plan Coding Team
Principal
in GA, IA, PA

Benefits Specialist
Ascensus
in PA

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Text of PBGC Comprehensive Premium Filing Instructions for 2019 Plan Year (PDF)

70 pages. "This document provides information for plans paying premiums for plan years beginning in 2019, including instructions for each data element that must be reported.... [K]ey changes to note for 2019: [1] Changes in premium rates ... [2] included information about the process by which plan administrators may certify the filing manually instead of electronically.... [3] revised the instructions regarding disaster relief to reflect recent changes made to PBGC's practice.... [4] increased My PAA functionality by adding a 'Submit a Request' Quick Link button.... [5] clarified the instructions for reporting the business code.... [6] expanded the list of common filing errors." Pension Benefit Guaranty Corporation [PBGC]

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IRS Issues Proposed Regs Amending Rules for Hardship Distributions

"The proposed regulations include the following changes: [1] Elimination of the six-month suspension requirement; [2] Elimination of the plan loan requirement; [3] Modifications to the list of hardship distribution events; [4] Addition of participant representation requirement; [5] Expansion of sources available for hardship distributions.... [T]he Treasury Department and IRS expect that plans will need to amend their hardship distribution provisions to reflect some or all of the changes in the proposed regulations." Drinker Biddle

DOL Private Pension Plan Bulletin: Abstract of 2016 Form 5500 Annual Reports (PDF)

68 pages. "The total number of pension plans grew again in 2016 to approximately 703,000 plans, a 1.2 percent increase over 2015. The number of DC plans grew by 1.2 percent, while the number of DB plans in creased by 1.4 percent.... The number of 401(k) type plans increased yet again in 2016 by 2.5 percent, from 547,000 to 560,000. There were 67.1 million active participants in 401(k) type plans.... The share of DB plans reporting being fully frozen decreased to 19.9 percent of all DB plans; however, the amount of assets in fully frozen DB plans increased from 15.4 percent to 17.1 percent in 2016." [Also available: Data tables in XLSX and XML formats.]
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

Market Volatility: Check Your Emotions at the Door

"Investors have been on a rollercoaster ride that raises the question: what should you do in times of volatile markets? In many situations, the answer is sit tight, and take the long view.... Whether any given day's drop reflects a market correction, an anomaly or the beginning of a bear market can take time to figure out -- and is outside the control of any one investor. So control what you can -- and focus on key investing concepts such as staying diversified and rebalancing to stay aligned with your goals." Financial Industry Regulatory Authority [FINRA]

How to Manage Your 401(k) Plan in a Time of Market Volatility

"For most people with 401(k) retirement plans, stock market volatility is taking its toll.... [R]ecent dips may feel like serious threats to one's retirement plans. But investment professionals suggest that rebalancing one's account is as radical a change as one should make.... That may be hard to hear at the moment for those experiencing 'account balance trauma.' But, despite the fact that the majority of 401(k) participants have exposure to equities, only around 8 percent are all in on stocks ... And if they have been keeping up with their accounts, they may just be closer to flat than seriously down." Born2Invest

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Case Study: Assisting a Plan Sponsor with Its Investment Portfolio Using Asset Liability Modeling

"The plan sponsor wanted to explore investment options that would best allow it to meet its future contribution requirements while limiting the risk of being underfunded on either an accounting or PBGC basis.... In the first stage, the risk budget was set so that the split between equities and fixed income investments was quantified.... [T]he goal of the second stage of the [asset liability modeling] study was be to allocate the risk budget specified from stage one via equity diversification within the portfolio." Milliman

Kentucky Supreme Court Nixes Move to Hybrid Pension Plan for Teachers

"In April, Republican Gov. Matt Bevin signed a law that moved all new teacher hires into a hybrid pension plan. The law also restricted how teachers used sick days to calculate their retirement benefits and changed how the state pays off its pension debt.... [T]he state's highest court ... ruled that lawmakers cannot take a bill close to final passage and replace it with an unrelated bill without voting on it three times over three separate days as the Constitution requires." [ Bevin v. Kentucky , Nos. 2018-SC-419-TGE, 2018-SC-421-TGE, 2018-CA-1200-MR (Ky. Dec. 13, 2018)]
NBC News

Pros and Cons of Completing a Rollover Before Year-End

"[A]ny money that leaves one account must be out before December 31st, but beyond the common timeframes for rollovers, it's okay if the money doesn't transfer into the receiving account until after January 1st. One thing that's important to keep in mind for clients subject to RMDs, however, is that the custodian likely will not track that last minute change, and it will be up to the advisor to make sure to account for any year-end balance increases for the following year's RMD." Nerd's Eye View

Text of IRS Notice 2019-02: Standard Mileage Rates for 2019 (PDF)

"The standard mileage rate for transportation or travel expenses is 58 cents per mile for all miles of business use ('business standard mileage rate').... The standard mileage rate is 14 cents per mile for use of an automobile in rendering gratuitous services to a charitable organization under Section 170.... The standard mileage rate is 20 cents per mile for use of an automobile: [1] for medical care described in Section 213; or [2] as part of a move for which the expenses are deductible under Section 217(g).... For automobiles a taxpayer uses for business purposes, the portion of the business standard mileage rate treated as depreciation is 24 cents per mile for 2015, 24 cents per mile for 2016, 25 cents per mile for 2017, 25 cents per mile for 2018, and 26 cents per mile for 2019."
Internal Revenue Service [IRS]

IRS Requires Escrow Arrangement to Collect Income Withholding Taxes on Stock Deferral Elections (PDF)

"The IRS recently issued Notice 2018-97 , which provides guidance regarding a number of the operational requirements applicable to Section 83(i). A large portion of the Notice 2018-97 guidance addresses the withholding of income taxes with respect to Section 83(i) elections."
Blank Rome LLP

Stock Option Back-Dating Again? Well, Not Quite

"[C]ompanies ... may be releasing negative information before an option grant ('bullet-dodging') or holding back positive information until after the grant ('spring-loading').... The SEC does not prohibit companies from timing option grants in this way. It simply requires the Company to disclose to shareholders whether it has such a practice, since this practice likely would be material to investors." Winston & Strawn LLP

Criminal Defense Lawyer for Family Member: 'Immediate and Heavy Financial Need' for Hardship Withdrawal?

Participant submitted request for a hardship withdrawal in order to pay the retainer necessary to hire a criminal defense lawyer for a family member (not spouse or dependent). Clearly, this doesn't fall under the safe harbor. BUT the 401k plan states that a hardship withdrawal may be allowed for "any other situations that, based on the facts and circumstances, the Committee determines to constitute an immediate and heavy financial need." Thoughts on whether this could be allowed under IRS regs? BenefitsLink Message Boards

5500 Filed Without Audit Attached: What's 'Reasonable Cause' for Failure?

Large plan (125 participants) filed Form 5500 but failed to include an audit with the filing. Are penalties automatic or are there allowances for first-time offenders? The instructions say that penalties MAY be assessed or imposed, unless failure to file properly is for reasonable cause. What would they consider reasonable cause? BenefitsLink Message Boards

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Most Popular Items in the Previous Issue

IRS Releases 2018 Required Amendments List for Qualified Retirement Plans Findley

The QPAM Exemption: Common Traps for the Unwary Winston & Strawn LLP

Retirement Plan Withdrawal Trends J.P. Morgan Asset Management