PLANSPONSOR - November/December 2017 - 6

Compliance Update
Summaries of the latest news from Washington and the courts-what's coming,
what's contemplated and what's critical for plan sponsors to know
IRS Releases Covered
Compensation Tables
The Internal Revenue Service (IRS) has
issued Revenue Ruling 2017-22, which
provides tables of covered compensation
under Internal Revenue Code
(IRC) Section 401(l)(5)(E) for the 2018
plan year. The tables are to be used for
determining contributions to defined
benefit (DB) plans and the permitted
disparity in defined contribution (DC)
plan contributions. To determine
2018 plan year covered compensation,
the taxable wage base is $128,700.
Permitted disparity allows for larger
contributions or more valuable benefits
with respect to compensation in
excess of the Social Security wage base.
In calculating an employee's covered
compensation for a plan year, the
taxable wage base is what was in effect
at the beginning of the period.
Memorandum on Plan
Loan Cure Periods
The Internal Revenue Service (IRS) has
including 401(k)s, 403(b)s, most 457s and
the federal government's Thrift Savings
Plan will increase, effective January 1,
2018, from $18,000 to $18,500.
In addition, the catch-up contribuTo
determine
2018 plan
year covered
compensation,
the taxable
wage base
is $128,700.
issued a memorandum on defined contribution (DC) plan loan
cure periods for participants who have failed to make installment
payments. On a regular basis, the IRS notes that loans, as
long as not for the purchase of a primary home, must be repaid
in five years, with payments due at the end of each month. But if
a participant misses a payment, the memorandum says, he may
make it up by the last day of the calendar quarter following the
quarter in which the missed payment was due. He may, alternatively,
refinance the loan, but the original loan's due date remains
in effect. The IRS reminds plan sponsors that the statutory plan
loan limit is the lesser of: $50,000, minus any outstanding loan
balance in the previous year, or the greater of half of the participant's
vested accrued benefit or $10,000.
2018 Retirement Plan Deferral Limits
Are Announced by IRS
According to Internal Revenue Service (IRS) Notice 2017-64,
the contribution limit for employees who participate in plans
tion limit for employees ages 50 and over
who participate in the above-mentioned
plans will remain unchanged at $6,000.
For defined benefit (DB) plans, under
Section 415(b)(1)(A) the limitation on
the annual benefit will increases from
$215,000 to $220,000. The limitation
used to define highly compensated
employees (HCEs) under Section 414(q)
(1)(B) will remain at $120,000. The
dollar limitation on premiums paid
with respect to a qualifying longevity
annuity contract (QLAC) under Income
Tax Regulation Section 1.401(a)(9)-6,
A-17(b)(2)(i) will increase from $125,000
to $130,000. For a complete list of limits,
visit: https//tinyurl.com/y8urrmz3.
IRS Announces
2018 Health FSA Limit
The Internal Revenue Service (IRS) has
adjusted the health flexible spending account (FSA) limit for
2018. An employee who chooses to participate in his employer's
FSA plan may contribute up to $2,650 during the upcoming
plan year-a $50 increase over 2017. Amounts contributed
are not subject to federal income tax, Social Security tax or
Medicare tax. Additionally, the IRS reminds employers that, if
their plan allows for it, they may contribute to an employee's
FSA. Further, under the use-it-or-lose-it provision, participating
employees have been forced to apply their savings to
eligible expenses incurred before the end of the plan year or
forfeit any unspent amounts. But employers may extend that
year-end deadline through either the carryover option or the
grace period option.
DOL Delays Full Implementation of
Fiduciary Rule Again
The Department of Labor (DOL) has decided to delay implementation
of the special transition period for the fiduciary rule's
6 PLANSPONSOR.com November-December 2017 Art by Alex Kiesling
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PLANSPONSOR - November/December 2017

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