New 2019 401k Plan Limits
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In This Issue
Compliance and Regulatory Abstract: The Internal Revenue Service announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2019. The contribution limit for employees who participate in 401k, 403b, most 457 plans, and the federal government's Thrift Savings Plan is increased from $18,500 to $19,000. Full details provided. Source: 401khelpcenter.com 401k Plan Notice Issues of Which to Be Aware (or Beware) Abstract: There are detailed laws and regulations regarding the content and when/how the plan participant notices are delivered. For most plans, the next plan year will begin on January 1, 2019, which means that December 1 is generally the last date by which those notices may be provided. This article touches on some bigger picture issues for an employer's attention as we enter notice season. Source: Hawleytroxell.com Best Practices for Managing Participant Data Abstract: Plan sponsors could save a lot of time, expense and stress by implementing a thorough system for managing participant data. Having the appropriate procedures in place can limit potential liability in an audit. Most companies don't realize the pertinence of maintaining adequate, compliant records until there is a need. Source: Planpilot.com ERISA Tips: Sufficient Information for Purposes of Section 404(c) Abstract: In order to be in compliance with ERISA Section 404(c), a plan needs to meet some general requirements; one is that plan participants must be allowed to receive information sufficient for them to make informed decisions. But what constitutes "sufficient information"? Source: Ntsa-net.org Revenue Procedure 2018-52 Released by IRS: VCP Modifications Abstract: The most impactful change comes to the submission of corrections process to the IRS's Voluntary Correction Program. The VCP is one of three correction programs plan sponsors can use to correct errors under the Employee Plans Compliance Resolution System, and is in place for plan sponsors to correct mistakes with either the plan document's language or how the plan has been run. Source: Schneiderdowns.com IRS Updates Model Tax Notices for Eligible Rollover Distributions From Retirement Plans Abstract: In its recent Notice 2018-74, the IRS provides updated model tax notices for the required written explanations given to recipients of eligible rollover distributions from qualified retirement plans. These updated notices reflect recent changes to the laws in this area as well as IRS guidance. Plan administrators should review the notices they are currently using to see if they need updating. Source: Findley.com »» Click here for more Compliance and Regulatory Material General Items IRS to Audit 401k Savers Who Contribute Too Much Abstract: The Treasury Inspector General for Tax Administrator is out with a report that suggests that some 401k workplace retirement plan savers are pushing the limits, saving more than what's allowed, costing the U.S. Treasury. The IRS will beef up employer education and conduct targeted audits for taxpayers who appear to have excess 401k deferrals, especially those with multiple 401ks. Source: Forbes.com Fiduciary and Plan Governance DOL ERISA Regulatory Enforcement Emphasis Abstract: The demise of the confusing Investment Fiduciary Advice Rule has allowed the DOL to focus on other enforcement priorities. The Plan Investment Conflicts project, which began in 2016, continues the efforts of prior enforcement projects by investigating the payment of improper or undisclosed compensation to ERISA plan vendors. This article offers five tips to help HR managers and committees be prepared and not get caught off guard. Source: Rolandcriss.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers How Do Fees Affect Plans' Ability to Beat Their Benchmarks? Abstract: Plans compare their returns by asset class to selected benchmarks that reflect their investment goals for the asset class. Plans pay fees to external asset managers with the expectation that the managers will exceed these benchmarks. As such, this paper focuses on the benchmarks to assess the role of fees. The question is whether higher fees help or hinder the ability for a plan to outperform its chosen benchmarks. Source: Bc.edu »» Click here for More Studies, Research, and White Papers 403b Plans ERISA: Thou Shall Not Pay Excessive Fees Abstract: With increased government scrutiny, ERISA lawsuits at an all-time high, and the plaintiff's bar not only increasing in number but in sophistication, 403b plan fiduciaries will continue to face high exposure if they fail to prudently select and then continue to monitor the investments options of their plans and plan fees. Litigation is not limited to large plans, as plaintiffs and the DOL have found that smaller plans are "low hanging fruit" in terms of finding ERISA violations. Source: Ckrlaw.com »» Click here for More 403b Material Target-Date Funds What's Driving Fiduciaries to Multimanager Target-Date Funds? Abstract: In a recent survey of nearly 500 consultants, sponsors, and retirement plan advisors, the majority now prefers open-architecture, or multimanager, target-date funds. This portends a significant shift in plan design, given that less than a third of target-date funds employ an open-architecture approach today. Performance is the driving factor. Source: Jhinvestments.com »» Click here for more on Target-Date Funds Multiple Employer Plans (MEP) Closer Examination of DOL MEP Proposal Abstract: Those industry stakeholders disappointed by the limited scope of the proposed regulations can take heart in the fact that DOL staff calls for detailed commentary on ways the proposal could be expanded, including into the area of "open MEPs" and "corporate MEPs." Source: Planadviser.com The Labor Department's Proposal for Multiple-Employer Plans Is Limited Abstract: The proposal isn't comprehensive enough to create sweeping changes. But, it may induce a few more entities to offer MEPs, possibly increasing retirement coverage and perhaps improving the quality of the retirement plans for some small businesses. The most significant impact of this proposal might be that it gives professional employer organizations a leg up in offering MEPs and might encourage more employers to join such organizations. Source: Morningstar.com DOL Opens Door to Wider MEP Availability, but How Much? Abstract: Advocates of expanding access to retirement plans through a multiple employer plan approach have been hoping for a relaxation of existing rules that govern these cooperative arrangements. Now, the DOL has obliged, at least to a degree. But if MEP proponents were looking for a magic bullet to significantly expand worker coverage and saving within employer plans, that outcome -- at least as it can be influenced by MEPs -- will only be determined with time and employers' response to the following guidance. Source: Ascensus.com Why We Still Need Open MEP Legislation Abstract: We know that there are many factors that can deter 401k plan adoption. The "open MEP," a plan in which unrelated employers can be pooled in a plan run by professionals, seems to be a solution to these problems. However, we need changes in the law to make these plans a workable reality, and the recent proposal by the Labor Department falls short of what we need. Source: Cohenbuckmann.com »» Click here for more on Multiple Employer Plans Cybersecurity Mitigating the Risk of Cyber Attacks to Your Employee Benefit Plan Abstract: Cybersecurity risks, such as phishing techniques, malware and ransomware attacks, facing employee benefit plans are no different than those facing corporations, and in fact, may be even more significant. As a plan sponsor and those charged with governance, you have a responsibility with respect to management and oversight of the plan, including understanding risks to the plan, even risks of cyberattacks. Source: Schneiderdowns.com »» Click here for more on Cybersecurity Issues
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