Senior Director / Account Executive Client Services

Aspire Financial Services LLC Tampa FL

Director / Account Executive Client Services

Aspire Financial Services LLC Tampa FL

Benefits Analyst

Innovo Benefits Group Concord MA

Senior Retirement Plan Administrator

Goldberg, Swedelson & Associates Encino CA / Telecommute

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Basics of Managed Accounts
RECORDED
Francis Investment Counsel

New Proposed 162(M) Regulations - What You Need to Know and Do!
January 10, 2020 WEBCAST
American Bar Association Joint Committee on Employee Benefits [JCEB]

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[Guidance Overview]

IRS Reiterates Requirement to Sign Plan Documents and Amendments

"Failure to adopt plan amendments when required can result in plan disqualification.... In a General Legal Advice Memorandum from the IRS's Office of Chief Counsel [released] December 13, 2019, the IRS provided a reminder of this important qualification requirement and the ramifications of noncompliance."

Proskauer

Webcast Series: Basics of Qualified Retirement Plans for 2020

ASC's Basics of Qualified Retirement Plan webcast series will give you a solid foundation of the rules applicable to qualified retirement plans. In Part 1, John Griffin, J.D., LL.M. will cover Participation, Coverage & Vesting & more. Register Now!

[Guidance Overview]

Best Interest Standard of Care for Advisors, Part 21

"[T]he broker-dealer should supervise [1] that the relevant information was gathered, [2] that it was evaluated taking account the requirements of the best interest standard (for example, is considered with 'care, skill and diligence' in the best interest of the participants), and [3] that the recommendation reasonably reflects that information and a best interest recommendation. However, that is just a logical answer. Unfortunately, the SEC does not specify what conduct is to be supervised."

FredReish.com

SECURE Act Set to Become Law as Part of Spending Deal

"Key provisions provide long-awaited nondiscrimination testing relief for closed defined benefit plans, promote 'open' defined contribution (DC) multiple-employer plans, relax auto-enrollment rules and encourage lifetime-income options in DC plans. Other reforms aim to help individuals save more for retirement."

Mercer

Average Savings Rate, Roth 401(k) Participation Hit New Highs

"[P]articipant deferrals rose last year to an average of 7.7 percent of pay, up from 7.1 percent in 2017 and 6.8 percent in 2016. With company contributions coming in at an average of 5.2 percent in 2018, the average combined savings rate is now at 12.9 percent, up from last year’s record finding of a combined savings rate of 12.2 percent."

Plan Sponsor Council of America [PSCA]

IRS Delays Start of Third Six-Year Remedial Amendment Cycle for Pre-Approved DB Plans

"To reflect the modified second six-year remedial amendment cycle, Rev. Proc. 2020-10 delays the start of the third six-year remedial amendment cycle to May 1, 2020.... Rev. Proc. 2020-10 also provides that the submission period for submitting on-cycle opinion letter applications for pre-approved defined benefit plans for the third six-year remedial amendment cycle runs from August 1, 2020, to July 31, 2021."

Thomson Reuters Practical Law

Pension Plans Ignore Mortality at Their Own Risk

"[T]he new assumptions reduce typical pension liabilities by 0.5%, a 3.6% drop in present value since the peak of longevity optimism corresponding to the release of MP-2014. The cumulative impact of the reductions is that approximately half of the increase in the decade-long MP 2014 update has been reversed.... Two critical questions plan sponsors face are [1] Will this allowance be adequate over the long-term, and [2] Given the overwhelming evidence of wide gaps between higher and lower socio-economic groups, how dangerous is it to assume all participants are 'average'?"

NISA Investment Advisors; free registration required

A New Angle on Pension Risk Management

"[B]ond rates have roughly bounced between 3.5% and 4.5% for over half a decade, repeating about every 19 or 20 months. The typical DB plan liability would be about 10 to 15 percent lower at the peaks than in the valleys, presenting localized opportunities for sponsors to make incremental shifts to LDI."

The Principal Blog

117 Multiemployer Pension Plans May Fail Within 20 Years, 1.4 Million Participants Could Lose Benefits (PDF)

"As many as 117 multiemployer pension plans covering 1.4 million participants are underfunded by $56.5 billion and have informed regulators and participants that they could fail within the next 20 years because they don't have enough money to pay the full promised benefits. Seven plans already failed in the past year when they became insolvent or terminated after all the employers withdrew."

Cheiron

CalPERS Is Divesting From Active Equities; Its Peers Aren't Following Suit

"CalPERS appears to be unique among large U.S. pension funds in drastically reducing the amount of assets managed by external active managers. While some large pensions have recently terminated or replaced managers, none of the funds reached by [the authors] said they planned to follow in CalPERS' footsteps."

Institutional Investor

[Opinion]

SECURE Act Delivers Major Wins for American Savers

"Changes like expanding access to multiple-employer plans and raising the auto-enrollment safe harbor cap build on policies that are proven to strengthen our retirement system. Other reforms, such as repealing the maximum age for making traditional IRA contributions and increasing the age required for mandatory distributions, will help align policy with the reality that people are living longer today."

Investment Company Institute [ICI]

Last Minute Funding Action by Congress Sets the Stage for Major Savings and Health Changes

"[T]he effective dates of some changes are mere days away -- January 1, 2020 -- these dates having been retained from the legislation as passed by the House of Representatives in May, 2019. However, wisely included in the legislation is a delayed amendment deadline for employer-sponsored retirement plans. This will allow implementation of changes immediately, with amending for the changes generally by the end of the 2022 plan year[.]"

Ascensus

[Guidance Overview]

IRS Issues Proposed Regs Clarifying Section 162(m)

"[T]he proposed regs confirm most of the unfavorable interpretations of Notice 2018-68 .... A covered employee for any taxable year means any employee who is among the three highest compensated executive officers for the taxable year, regardless of whether the executive officer is serving at the end of the publicly held corporation's taxable year, and regardless of whether the executive officer's compensation is subject to disclosure for the last completed fiscal year under the applicable SEC rules.... Non-deductible compensation may include the amount paid to a beneficiary on behalf of a decease former covered employee."

Winston & Strawn LLP

[Guidance Overview]

IRS Issues Proposed Regulations Under Code Section 162(m)

"Whether an arrangement is grandfathered must be determined by reference to applicable law.... Negative discretion still problematic, unless local law constrains use.... Vesting acceleration permitted under grandfather.... No IPO transition period.... Directors' fees and other non-employee compensation are subject to deduction disallowance.... Modification of 409A arrangements by December 31, 2020."

Wilmer Hale

Year-End Planning: Strategies for Stock Options, Restricted Stock/RSUs, and ESPPs

"[Year-end planning strategies should be considered if:] [1] You are planning to sell the stock at exercise late this year or early next year.... [2] You are over or near the yearly maximum for Social Security.... [3] You expect next year to trigger the additional Medicare tax.... [4] Your restricted stock or restricted stock units (RSUs) vested this year.... [5] You exercised incentive stock options (ISOs) this year, you still hold the stock, and the stock price dropped substantially.... [6] The stock price rose (or fell) after your exercise of nonqualified stock options (NQSOs) or your restricted stock/RSU vesting this year.... [7] You want to donate stock or cash."

myStockOptions.com

Participant Missed Opportunity for Deferrals -- EPCRS Correction Unclear in QACA Situation

"Plan is a safe harbor 401(k) using an automatic contribution arrangement to satisfy the 401(k) safe harbor requirements. Plan sponsor failed to implement an employee's affirmative election. I'm reading EPCRS. One part says that the plan sponsor has to make a QNEC. Another part says that sponsor does not have to make a QNEC if the failure was corrected within 9-1/2 months after the end of the plan year. Does this 'special safe harbor correction method' apply to traditional automatic contributions only? Or does it apply to QACA arrangements?"

BenefitsLink Message Boards

402(f) Notice Distributed Fewer Than 30 Days Before Terminating Plan Makes Final Distributions; Consequences?

"The Treasury department's rule under Internal Revenue Code Section 402(f) calls for an administrator to deliver a Section 402(f) written explanation 'no less than 30 days . . . before the date of [the] distribution.' Internal Revenue Code Section 6652(i) imposes a penalty of $100 on each failure to deliver a Section 402(f) written explanation. To speed up a plan termination's final distribution, an administrator is considering deliberately incurring that penalty. In the circumstances, that amount is much less than the business harm that would result from not completing the plan's termination by December 30. I've already analyzed ERISA Title I consequences, including about the fiduciary's potential obedience and prudence breaches. Is it so that an administrator's compliance with Section 402(f) is not a Section 401(a) condition for a plan's tax-qualified treatment? The plan's governing document does not state any provision or command based on Section 402(f)."

BenefitsLink Message Boards

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Press Releases

YieldStreet Enters Retirement Industry with Acquisition of WealthFlex YieldStreet

OneDigital Health and Benefits Acquires Levy Benefits Advisors, LLC. OneDigital Health and Benefits

New York Life to Acquire Cigna's Group Life and Disability Insurance Business New York Life Insurance Company

T. Rowe Price and ConnectYourCare Bring Integrated Health Savings Account Solution to Recordkeeping Clients T. Rowe Price

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Most Popular Items in the Previous Issue

401(k) Compliance Calendar for 2020 ForUsAll

Can a Plan Document's Arbitration Clause Subject Participants to Binding Arbitration of 502(a)(2) Claims? (PDF) Jordan D. Mamorsky, via Journal of Compensation and Benefits

Employees Should Take Full Advantage of Roth 401(k) Before Making Pre-Tax 401(k) Deferrals Lawton Retirement Plan Consultants