IRA

Taxpayer Group Files Lawsuit to Block CalSavers Retirement Program

A lawsuit was filed last week (May 31, 2018) in an attempt to block implementation of a new retirement savings program established by the State of California. The California Secure Choice Retirement Savings Program—recently rename CalSavers—is an IRA-based retirement savings program for that state’s private sector employees whose employers do not offer a workplace retirement plan, which was authorized by legislation enacted in 2016. According to CalSavers, some 7.5 million Californians work for employers that do not offer a retirement plan.

The lawsuit was filed by the Howard Jarvis Taxpayers Association (HJTA) and seeks to prevent introduction of this program projected to launch sometime in 2018. In addition to the program itself, also named as defendant is John Chiang, California State Treasurer and Chair of the California Secure Choice Retirement Savings Board.

HJTA claims to have standing to sue based on the fact that some of its members—claimed in the filing to number more than 200,000—could be affected either as employers required to participate in the payroll withholding program, or employees who might be automatically enrolled. The lawsuit was filed in U.S. District Court for the Eastern District of California.


Provident Trust Group Listed as Wealth Advisor 2018 Best IRA Custodian

Self-Directed Administrator Has Earned This Distinction for Four Consecutive Years

LAS VEGAS – Provident Trust Group (Provident), a wholly owned subsidiary of Ascensus that is headquartered in Las Vegas, Nevada, has been honored by The Wealth Advisor (Wealth Advisor) as 2018’s Best IRA Custodian. This marks the fourth consecutive year that Provident has received this accolade.

Wealth Advisor has been America’s leading wealth management publication since 2009, providing news, opinion, and education for wealth managers and advisors alike. Results to determine the best IRA custodians list were compiled after receiving feedback from 200,000 subscribers. Provident ranked number 1 out of 12 registered independent retirement custodians, winning the majority favor by 68 percent.

According to Wealth Advisor readers, three factors were integral to securing the 2018 Best IRA Custodian distinction for Provident:

  • Reputation and length of time in the business – Nearly all of the advisors surveyed cited this as a factor in their decision-making.
  • Quality of service based on testimonials and referrals – Well over half of advisors cited word-of-mouth recommendations as critical.
  • Availability of in-house experts – Just under half of the advisors considered the quality of providers’ staff in making their decisions.

“It’s an honor to be recognized once again by Wealth Advisor’s readers as the top IRA custodian in the country,” says Theresa Fette, president of Provident. “Provident’s stated mission has been to empower customers to self-direct their retirement assets through innovative retirement plan solutions, ease of access, and an extraordinary customer experience. Awards and achievements like this are constant reminders that we work side by side with a dream team of associates that contributes to our success.”

“We’re extremely proud of Theresa and her team at Provident for this accomplishment, as it brings to light their commitment to service and excellence,” states David Musto, president of Ascensus, a technology-enabled solutions provider that helps more than 8 million Americans save for the future. “Through a shared focus on a best-in-class client experience, Provident and Ascensus aim to give customers access to the broadest range of alternative investment choices possible so that they can achieve a greater level of financial success.”

For more information on the full ranking and analysis, visit https://www.thewealthadvisor.com/article/provident-trust-group-rated-top-ira-custodian-2018.

About Provident Trust Group

Provident Trust Group is a self-directed administrator and passive custodian serving more than 29,000 clients and holding over $4.5 Billion assets under custody. The firm specializes in IRAs and Solo 401(k) account administration, asset custody, Corporate Trust services, and escrow services. Over 10 years, it has maintained an A+ rating with the Better Business Bureau by offering responsive, honest, and personable service. Provident is dedicated to helping clients make the most of their financial opportunities by providing access to investment opportunities outside the traditional marketplace of publicly traded assets. Learn more at www.trustprovident.com.

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 (http://www.ascensus.com/).

View career opportunities at careers.ascensus.com or on LinkedIn at linkedin.com/company/ascensus (https://www.linkedin.com/company/ascensus). For the latest company news, follow @AscensusInc (https://twitter.com/AscensusInc) on Twitter.


Ascensus Named Preferred Vendor by Nebraska Bankers Association

Firm Helps Solve Banks’ IRA Compliance Challenges with Innovative Training and Product Offerings

Dresher, PA—Ascensus, a technology-enabled solutions provider that helps more than 8 million Americans save for the future, has announced that the Nebraska Bankers Association (NBA) named Ascensus as a preferred partner for its IRA products and training solutions.

The NBA and its subsidiary, Nebraska Bankers Insurance & Services Co. (NBISCO), have done a due diligence review of Ascensus’ products and training solutions and recommend Ascensus’ Fully- and Self-Administered Programs, IRA Essentials OnDemand, and IRA University to their member banks. NBA’s recommendation lets member banks know that Ascensus delivers IRA administration and training that focuses on innovation and compliance so that they can focus on their core businesses.

“Ascensus, NBA, and NBISCO have a long history of working together in support of Nebraska banks,” states Steve Christenson, executive vice president at Ascensus. “We look forward to many years of partnership and assisting NBA member banks to help their clients save for retirement and healthcare.”

“NBISCO’s commitment to extraordinary service to NBA-member financial institutions includes a desire to refer our members to vendors who share our passion for excellence,” states Scott Yank, executive vice president at NBISCO. “Our goal is to provide competitively priced products and services that will bring positive results for our member banks.”

“For this reason, NBISCO has entered into a preferred vendor relationship with Ascensus,” continues York. “We feel that the products offered will be a value-added service for NBA member banks.”

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.

About Nebraska Bankers Association

The Nebraska Bankers Association (www.nebankers.org), founded in 1890, is the voice of Nebraska’s $72 billion banking industry, which is composed of small, regional, and large banks that together employ more than 14,000 people, safeguard nearly $59 billion in deposits, and extend more than $53 billion in loans, all within the state of Nebraska.


IRS Addresses Withholding for IRA Payments to State Unclaimed Property Funds

The IRS has released Revenue Ruling (Rev. Rul) 2018-17, which addresses withholding and reporting requirements for the payment of an IRA owner’s interest to a state unclaimed property fund (an action sometimes referred to as “escheatment”).

Rev. Rul. 2018-17 states that payments made in this manner are treated as includable in gross income, and are therefore designated as distributions subject to the rules on federal income tax withholding for IRAs. The revenue ruling also states that the distributing trustee must report these payments on the applicable year’s Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., identifying the IRA owner as the recipient.

For payments made before the earlier of January 1, 2019, or the date it becomes reasonably practicable to comply with the requirements, a person will not be treated as failing to comply with the withholding and reporting requirements described in the revenue ruling.


Dennis Zuehlke Discusses New IRS Reporting Requirement

In a recent article published by the Credit Union National Association, Dennis Zuehlke discusses how to prepare for the new Internal Revenue Service (IRS) reporting requirement. The IRS now requires separate reporting of any late rollover contributions self-certified by an individual retirement account (IRA) owner on Form 5498, IRA Contribution Information.


Three States Denied in Their Appeal Seeking to Intervene in Fiduciary Litigation

One week after filing an appeal in an attempt to save the DOL’s ill-fated investment fiduciary guidance (the Department of Labor conflict-of-interest regulations), the states of California, New York, and Oregon are denied that opportunity by the U.S. Fifth Circuit Court of Appeals. This Court had ruled in March 2018 that the Department of Labor’s (DOL’s) fiduciary investment advice guidance for retirement savers went beyond the agency’s authority, and vacated—essentially nullified in its entirety—the DOL’s final regulations and related exemptions. When the DOL failed to appeal this ruling, these states and the American Association of Retired Persons (AARP) filed a motion on April 26 seeking the right to intervene in support of the DOL fiduciary guidance, on the grounds that investors and the states would be harmed by the Appeals Court’s action vacating the guidance.

On May 2, this request by the states and AARP to intervene was denied by the Fifth Circuit Court. Two weeks later, on May 16, the state Attorneys General of California, New York and Oregon (this time absent the participation of AARP) filed an appeal. The states hoped their arguments in support of maintaining the DOL fiduciary guidance would be heard by the full 17-member panel of Fifth Circuit Appeals Court judges, rather than the three-judge panel that had vacated the guidance in March. Instead, the same three-judge panel has now denied both of the state attempts to intervene.

There appear to be no more options for the states in pursuit of maintaining the DOL investment fiduciary guidance, although the Fifth Circuit has yet to issue its official mandate implementing the March 15 decision that would vacate the guidance nationwide. It appears that the only known litigation step that could now be taken would be for the DOL itself to appeal to the U.S. Supreme Court. Given the DOL’s decision not to appeal at the Circuit Court level, most feel there is no reason to believe the agency will do so.

Unwilling to concede defeat, however, on May 17 a group of five Senate Democrats—Patti Murray (WA), Ron Wyden (OR), Elizabeth Warren (MA), Sherrod Brown (OH) and Cory Booker (NJ)—sent a letter to Secretary of Labor Alexander Acosta asking the Secretary and his agency to pursue an appeal to the U.S. Supreme Court. They pointed out that before the Fifth Circuit Court’s March 15 ruling nullifying the DOL investment fiduciary guidance, four other court challenges to the fiduciary guidance had been attempted and all had failed. Only one court—the Fifth Circuit—found that the DOL had exceeded its rulemaking authority in issuing its investment fiduciary guidance.

The senators also cited the statement by Secretary Acosta in 2017 that there was “no principled legal basis” to delay implementing the investment fiduciary guidance. The senators pointedly asked the Secretary to tell them how his agency proposes to protect the interests of retirement savers, absent the DOL’s fiduciary guidance. They have requested a response by June 1.

 


Attorneys General Appeal for Right to Intervene in Support of DOL Fiduciary Guidance

The states’ Attorneys General of California, New York, and Oregon yesterday (May 16) filed an appeal of their recent setback in litigation over the Department of Labor (DOL) fiduciary investment advice guidance. The U.S. Fifth Circuit Court of Appeals ruled in March 2018 that the DOL’s fiduciary guidance had gone beyond the agency’s authority and vacated—essentially nullified—the DOL’s final regulations and related exemptions in their entirety.

Background and New Filing

When the DOL failed to appeal this ruling, these three states and the American Association of Retired Persons (AARP) filed a motion on April 26 seeking the right to intervene in support of the DOL fiduciary guidance on the grounds that investors and the states would be harmed by the Appeals Court’s action vacating it. On May 2, this joint request for the right to intervene in support of the guidance was denied by the Fifth Circuit Court.

Yesterday (May 16, 2018) was the deadline for an appeal of this denial, and as noted earlier, the three Attorneys General did file another appeal yesterday asking the Fifth Circuit Court of Appeals to reconsider its May 2 decision. This appeal, however, does not include the AARP.

Possible Consideration by Full 15-Member Appeals Court

The March ruling that vacated the DOL fiduciary guidance was rendered by a three-judge panel, rather than the full membership of judges (15) on the Fifth Circuit Appeals Court. The states would ultimately prefer to make their case for retaining the DOL fiduciary guidance before the entire 15-member Appeals Court. The Attorneys General wrote in their filing, “If the panel declines to reconsider its order denying intervention, the States ask that the Court direct the Clerk to permit the filing of a petition seeking review of that order by the full Court.”

What Next?

If this attempt by the states to intervene on behalf of the fiduciary guidance fails, it appears that the only step that could be taken to preserve the fiduciary guidance would be for the DOL itself to appeal to the U.S. Supreme Court.  Given the DOL’s decision not to appeal at the Circuit Court level, there is no reason to believe it would do so.


Tax-Related Deadline Relief for North Carolina Storm Victims

The IRS has issued News Release NC-2018-02 that describes tax-related deadline relief available to victims of severe storms and tornadoes in North Carolina. 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 the 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 affected, such deadlines falling on or after April 15, 2018, and on or before August 15, 2018, are postponed to August 15, 2018. Because the deadline for filing individual income tax returns falls within this period, IRA contributions of those covered by the disaster relief could be timely made.

The North Carolina counties included in the relief at this time include Guilford and Rockingham. 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 must call the IRS disaster hotline at 866-562-5227 to request relief.


SEC Investment Advice Proposed Guidance in Federal Register; 90-Day Comment Period Begins

More than two weeks after releasing them to the public, the Securities and Exchange Commission (SEC) today (May 9) published in the Federal Register its proposed regulations intended to govern relationships between investment professionals and the investors they serve. Also published is a proposed disclosure to be used by broker-dealers and registered investment advisers (RIAs) in defining the scope of their relationships with clients, and a standard-of-conduct for RIAs.

This SEC guidance is seen by many as an alternative to the Department of Labor (DOL) investment fiduciary regulations and prohibited transaction exemption guidance package, which was recently vacated (nullified) by a U.S. appeals court. (The DOL provided interim guidance this week advising standards of conduct until further notice is provided by the DOL.) Opponents of the DOL’s fiduciary investment advice guidance had long argued that it is more properly the province of SEC to regulate investment advising relationships, including advice given to retirement savers.

Under the proposed SEC regulations, broker dealers would be required to put investors’ interests before their own. In addition, the proposal clarifies the SEC’s views on the fiduciary duties and standards that investment advisers owe their clients. The regulations also aim to clarify investor confusion about their relationships with investment professionals, and propose to restrict some broker-dealers and their associated financial professionals from using the term “adviser” or “advisor” as part of their name.

Public comments will be accepted for a 90-day period beginning with today’s publishing. See the Ascensus Washington Pulse for analysis of the SEC guidance.