Defined contribution plan

IRS Issues Final Regulations Approving Forfeitures to Fund QNECs, QMACs

The IRS and Department of the Treasury have issued final regulations amending the definitions of qualified nonelective contribution (QNEC) and qualified matching contribution (QMAC), settling the issue of whether participant forfeitures can be used to fund QNECs and QMACs.

QNECs and QMACs are types of employer contributions to qualified retirement plans commonly used to correct certain contribution testing failures in 401(k)-type plans. Unless certain safe harbor exemptions apply, 401(k) plans generally must satisfy rules that limit the disparity between the average deferrals of highly compensated employees (HCEs) and nonhighly compensated employees (nonHCEs). Similarly, in nonsafe harbor situations, 401(k) plans must satisfy rules that limit the disparity between average matching contributions of HCEs and nonHCEs. To correct testing failures under these rules, employers can make QNECs and QMACs.

These final regulations finalize the proposed regulations issued by the IRS in January 2017, which first altered the definitions of QNEC and QMAC to allow the use of forfeitures in funding QNEC and QMAC contributions. Before 2017, the IRS and Treasury Department interpreted the 401(k) regulations in a manner that did not permit the use of participant forfeitures to fund these employer contributions.

The final regulations are scheduled to be published as early as July 20 in the Federal Register, and will take effect on that publication date.


Dennis Zuehlke Discusses New Tax Reform

In a recent artic​le​ published by the Credit Union National Association, Dennis Zuehlke discusses the recently passed tax-reform bill​ eliminating the ability to reverse a Roth individual retirement account (IRA) conversion​, also known as a recharacterization. He warns that individuals who convert and do not seek tax advice may not be aware of the tax impact until they file their federal tax return months later.


IRS Grants Tax-Related Deadline Relief to Texas Storm Victims

The IRS has issued News Release TX-2018-05, describing tax-related deadline relief available to victims of severe storms and flooding in Texas. In addition to postponement of tax return deadlines falling within dates identified in the news release, the relief includes postponement of deadlines for completing certain time-sensitive tax-related acts specified in Treasury Regulation 301.7508A-1(c)(1). These acts include completion of rollovers or recharacterizations, correction of certain excess contributions, making plan loan payments, filing Form 5500, and certain other acts under this regulation.

Such deadlines falling on or after June 19, 2018, and on or before October 31, 2018, are postponed to October 31, 2018.

The Texas counties included in the relief at this time include Cameron and Hidalgo. The relief applies specifically to residents of these identified areas, to those whose businesses or records necessary to meet a covered deadline are located there, and to certain relief workers providing assistance following the disaster events. Any individual visiting a covered disaster area who is injured or killed as a result of the events is also entitled to deadline relief. Affected taxpayers who reside or have a business located outside the covered disaster area are required to call the IRS disaster hotline at 866-562-5227 to request relief.


IRS Releases 2018 Series Forms for VCP Plan Correction Submissions

The IRS has released a series of June 2018-dated forms that are used in submissions for retirement plan corrections under the Service’s Voluntary Correction Program (VCP). In addition to the general VCP Compliance Statement form, individual schedules are used for specific plan types (e.g., SIMPLE IRAs, SEPs) or certain plan failures (e.g., non-amender, plan loan failure). The updated forms follow.

Form 14568-B, Model VCP Compliance Statement Schedule 2: Other Nonamender Failures and Failure to Adopt a 403(b) Plan Timely

Form 14568-E, Model VCP Compliance Statement Schedule 5: Plan Loan Failures (Qualified Plans and 403(b) Plans)

Form 14568-H, Model VCP Compliance Statement Schedule 8: Failure to Pay Required Minimum Distributions Timely


Ascensus Acquires INTAC Actuarial Services, Inc.

Leading Service Provider Expands Its TPA Presence While Strengthening Defined Contribution and Defined Benefit Expertise

Dresher, PA— Ascensus, a technology-enabled solutions provider that helps more than 8 million Americans save for the future, has entered into an agreement to acquire INTAC Actuarial Services, Inc. (INTAC). The third-party administration (TPA) firm will immediately become part of Ascensus’ TPA Solutions division.

Based in Ridgewood, New Jersey, INTAC provides complete administration of employer-sponsored retirement plans for about 3,000 small to mid-sized companies, their owners, key executives and employees. The firm understands what employers want and need in a retirement plan and delivers solutions through high quality client service—each retirement plan is designed, created, and proactively refined to meet each client’s goals while maximizing retirement benefits. INTAC also provides ongoing education to their clients and the professionals in the communities they service to ensure that they remain abreast of industry changes and issues.

“Like Ascensus, INTAC is committed to excellence in everything that they do—especially when it comes to making retirement plans work for their clients,” states David Musto, Ascensus’ president. “INTAC has one of the lowest employee turnover rates in the industry and has been ranked as one of the best places to work in New Jersey; we’re pleased to have their associates join us to help Americans save for retirement.”

“As a family-run business, we pride ourselves on creating meaningful client relationships and on creating a culture in which employees feel like they’re part of the family,” says Charles Rosenberg, INTAC’s vice president. “As part of Ascensus, we’ll be able to combine our expertise with their resources to continue to provide a proactive, personalized client experience at every interaction with our firm while also offering exciting growth opportunities to our employees.”

“Geographically speaking, the tri-state and greater Delaware areas are important market expansion opportunities for our TPA Solutions division,” says Raghav Nandagopal, Ascensus’ executive vice president of corporate development and M&A. “With its strong historical growth, successful long-term track record, and associate-focused culture, INTAC is an ideal business to help Ascensus achieve its immediate and long-term growth plans.”

About Ascensus

Ascensus helps more than 8 million Americans save for the future—retirement, education, and healthcare—through technology-enabled solutions. With more than 35 years of experience, the firm offers tailored solutions that meet the needs of asset managers, banks, credit unions, state governments, financial professionals, employers, and individuals. Ascensus supports over 60,000 retirement plans, more than 4 million 529 education savings accounts, and a growing number of ABLE savings accounts. It also administers more than 1.6 million IRAs and health savings accounts. As of March 31, 2018, Ascensus had over $187 billion in total assets under administration. For more information about Ascensus, visit ascensus.com.

View career opportunities at careers.ascensus.com/page/show/tpa and careers.ascensus.com or on LinkedIn at linkedin.com/company/ascensus. For the latest company news, follow @AscensusInc on Twitter.


Jim Racine Discusses Value of TPAs

In a recent article publish by Wealth Management, VP Jim Racine discusses the value of TPAs and how they make employers’ lives easier. He also explains how fast the retirement industry is evolving: “Regional and national TPAs are growing by acquisition, with Ascensus seeing up to five acquisitions reported of each month from as many as four firms doing acquisitions,” adds Racine. ​​


IRS Announces Tax-Related Deadline Relief for Hawaii Volcano Victims

The IRS has issued News Release HI-2018-02, announcing tax-related deadline relief for certain Hawaii residents who are victims of recent volcanic eruptions and earthquakes. In addition to postponement of tax return deadlines falling within dates identified in the news release, the relief includes postponement of deadlines for completing certain time-sensitive tax-related acts specified in Treasury Regulation 301.7508A-1(c)(1).

These acts include completion of rollovers or recharacterizations, correction of certain excess contributions, making plan loan payments, filing Form 5500, and certain other acts under this regulation. For those who qualify, such deadlines falling on or after May 3, 2018, and on or before September 17, 2018, are postponed to September 17, 2018.

The area identified as directly qualifying for relief is “Hawaii County” (also referred to as the Island of Hawaii, or the “Big Island”). The relief applies specifically to residents of the identified area, to those whose businesses or records necessary to meet a covered deadline are located there, and to certain relief workers providing assistance following the disaster events. Any individual visiting a covered disaster area who is injured or killed as a result of the events is also entitled to deadline relief. Affected taxpayers who reside or have a business located outside the covered disaster area are required to call the IRS disaster hotline at 1-866-562-5227 to request relief.

 


Ascensus Appoints Two New Regional Vice Presidents

Jeff Simes and Bas Van Rhee Join Retirement Plan Sales Team to Support Financial Advisors and Their Business Owner Clients

Dresher, PA—Ascensus, a technology-enabled solutions provider that helps more than 8 million Americans save for the future, is pleased to announce the appointment of Jeff Simes and Bas Van Rhee as regional vice presidents on the firm’s retirement plan sales team.

In these roles, they will work with financial advisors, third-party administrators, and financial institutions—including outsourcing partners and DCIO (defined contribution investment only) sales representatives—to build and maintain Ascensus’ retirement plan distribution networks. Both Simes and Van Rhee will report directly to Anthony Bologna, vice president of retirement sales at Ascensus.

Simes will represent the Northeast region, covering Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island, and Vermont. He brings over 20 years of financial services experience in relationship management, business development, and sales roles. He most recently served as a regional vice president for CUNA Mutual Retirement Solutions and has also held retirement sales positions at Mass Mutual and The Hartford.

Simes earned his Bachelor of Arts degree from University of Massachusetts and his MBA from Bryant University. He also holds his FINRA Series 7, 63, and 24 designations.

Van Rhee will serve the Plains territory, which includes Arkansas, Iowa, Kansas, Missouri, and Nebraska. He has over 10 years of sales and business development experience in the retirement industry. Prior to joining Ascensus, he served as a regional retirement sales representative for Paychex where he was recognized as Paychex’s 2017 district representative of the year.

Van Rhee earned his Bachelor of Arts degree from The Master’s University and his MBA from University of Redlands. He also holds his FINRA Series 6 and 63 designations.

“The extensive knowledge Jeff and Bas bring to the team will push us forward with financial advisors and our customers,” said Jason Crane, head of retirement sales at Ascensus. “We’re pleased to welcome them to our sales team and to leverage their expertise in helping advisors select the right retirement plan for their business owner clients.”

About Ascensus

Ascensus helps more than 8 million Americans save for the future—retirement, education, and healthcare— through technology-enabled solutions. With more than 35 years of experience, the firm offers tailored solutions that meet the needs of asset managers, banks, credit unions, state governments, financial professionals, employers, and individuals. Ascensus supports over 60,000 retirement plans, more than 4 million 529 education savings accounts, and a growing number of ABLE savings accounts. It also administers more than 1.6 million IRAs and health savings accounts. As of March 31, 2018, Ascensus had over $187 billion in total assets under administration. For more information about Ascensus, visit ascensus.com.

View career opportunities at careers.ascensus.com or on LinkedIn at linkedin.com/company/ascensus. For the latest company news, follow @AscensusInc on Twitter.


Advisory Group Recommends Missing Participant and Determination Letter Program Changes to IRS

The Advisory Committee on Tax-Exempt and Government Entities (ACT) has issued its 2018 Report of Recommendations to the IRS on several issues potentially affecting tax-exempt entities, including tax-qualified retirement plans. Recommendations specific to retirement plans include potential broadening of the IRS determination letter program, and administration of the IRS’s missing participant program.

The IRS in 2015 announced a significant scaling back of its program of issuing determination letters, which affirm plans’ qualified status. For example, beginning in 2017, individually designed plans could only submit for determination letters at the time of plan establishing or termination, with certain exceptions to later be specified by the IRS. Earlier this year the IRS requested comments on types of plans and circumstances that might justify the Service reopening a broadened determination letter program for 2019. This 2018 ACT report offers recommendations on circumstances and parameters for a limited reopening of the determination letter program not only for 2019, but for beyond as well.

The report also makes recommendations concerning missing plan participants. Among these are a recommendation that IRS coordinate missing participant guidance with the Department of Labor and Pension Benefit Guaranty Corporation, that it reopen the IRS’s former letter forwarding program, allow uncashed check amounts to be forfeited (subject to reclaiming), apply plan distribution field directives to distributions other than required minimum distributions, etc.