PLANADVISER - November/December 2018 - 6

Legislative and Judicial Actions
compliance news
IRS Contribution Limits for 2019
The IRS has announced cost of living
adjustments affecting dollar limitations
for pension plans and other
retirement-related items for
tax year 2019.
* According to Notice
2018-83, the contribution
limit for employees who
participate in 401(k),
403(b) and most 457
plans, or the federal government's
Thrift Savings
Plan, is increased
from $18,500 to $19,000.
* The catch-up contribution
limit for employees
ages 50 and over
who participate in 401(k),
403(b), most 457 plans or
the federal government's
Thrift Savings Plan remains
unchanged at $6,000.
* The limit on annual contributions
to an individual retirement account
(IRA) will increase from $5,500-the amount
set in 2013-to $6,000.
* The catch-up contribution limit for individuals ages 50
and older saving in an IRA is not subject to an annual costof-living
adjustment and remains $1,000.
IRS Proposes Changes to Hardship Withdrawals
The IRS has issued a notice of proposed rulemaking related
to hardship distributions from 401(k) plans.
The proposed regulations modify the Internal Revenue
Code (IRC) Section 1.401(k)-1(d)(3)(iii)(B) safe harbor list of
expenses that are deemed acceptable for meeting an immediate
and heavy financial need by adding:
* " Primary beneficiary under the plan " for an individual
who may need to pay qualifying medical, educational and
funeral expenses;
* Damage to a principal residence-not necessarily in a
federally declared disaster area-that would qualify for a
casualty deduction under Section 165; and
* Expenses incurred as a result of certain disasters.
DOL Seeks to Expand Access to MEPs
Under the direction of President Donald Trump, the Department
of Labor (DOL) is seeking to make it easier for small
businesses to form association defined contribution (DC)
retirement plans within a single administrative framework.
To this end, the DOL has published a set of proposed regulations
under Title 29 of the Code of Federal Regulations to
expand access to retirement saving options
by clarifying the circumstances under
which an employer group, association
or professional employer
organization (PEO) may sponsor
a workplace retirement
plan.
In particular, the proposed
regulation clarifies
that employer groups or
associations and PEOs
can, when satisfying certain
criteria, constitute
" employers " within the
meaning of Section 3(5)
of the Employee Retirement
Income Security
Act (ERISA) for purposes
of establishing or maintaining
an individual account
" employee pension benefit plan "
within the meaning of ERISA Section
3(2).
As an " employer, " a group or association
may sponsor a defined contribution
plan for its members, as can a PEO sponsor a
plan for its client employers. All such plans are referred
to as multiple employer plans, or MEPs. The proposed regulation
would allow different businesses to join a MEP, either
through a group or association or through a PEO.
Fiduciary-Standard Plans at Both the DOL and SEC
The Department of Labor (DOL)'s Employee Benefit Security
Administration (EBSA) has a number of items on its regulatory
agenda-for example, a proposed rule on the definition
of " employer " for multiple employer plans (MEPs) and
an interim final rule on the adoption of an amended and
restated Voluntary Fiduciary Correction Program (VFCP).
Perhaps of widest interest is the continuation of the
final rule stage for the DOL's fiduciary rule and prohibited
transaction exemptions (PTEs). The pertaining item notes
that, on April 8, 2016, the agency replaced the 1975 regulation
defining " fiduciary " with a new regulatory definition.
However, its new definition was vacated by the 5th U.S.
Circuit Court of Appeals.
The agency said it is considering regulatory options in
light of the 5th Circuit opinion and has on its timeline that a
final rule will be issued next September.
Meanwhile, a look at the regulatory agenda for the
Securities and Exchange Commission (SEC) also shows a
September 2019 date for a final action on its Regulation Best
Interest. In April, the commissioners of the SEC voted by a
four-to-one majority to propose a multi-pronged set of new
6 | planadviser.com November-December 2018 Art by Cecile Kim
http://www.planadviserdigital.com/planadviser/november_december_2018/TrackLink.action?pageName=6&exitLink=http%3A%2F%2Fplanadviser.com
PLANADVISER - November/December 2018

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