PLANSPONSOR - October 2017 - 12

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 Relaxes Loan,
Hardship Rules for
Hurricane Victims
The Internal Revenue Service (IRS)
announced that 401(k)s and similar
employer-sponsored retirement plans
may make loans and hardship distributions
to victims of Hurricane Irma and
members of their families. This is similar
to relief provided last month to victims of
Hurricane Harvey. Participants in 401(k)
plans, employees of public schools and
tax-exempt organizations with 403(b)
tax-sheltered annuities, as well as state
and local government employees with
457(b) deferred-compensation plans,
may be eligible to take advantage of these
streamlined loan procedures and liberalized
hardship distribution rules. Retirement
plans may provide this relief to
employees and certain members of their
families who live or work in disaster areas
affected by Irma and designated for individual
assistance by the Federal Emergency
Management Agency (FEMA). For
a complete list of eligible localities, visit
www.fema.gov/disasters. To qualify for
this relief, hardship withdrawals must be
made by January 31, 2018. Additionally,
in its Notice 2017-49, the IRS, along with
the Department of Labor (DOL) and the
Pension Benefit Guaranty Corporation
(PBGC) announced similar and further
relief.
recommending investments in share
classes that pay 12b-1 fees and started
transferring legacy and existing clients'
holdings to institutional share classes.
The company has also made arrangements
to credit or rebate plan sponsors
and individual retirement account (IRA)
holders with any 12b-1 fees it may continue
to receive from legacy holdings. Envoy has
confirmed that $2,647 in rebates has been
sent to 50 IRA holders through credits to
client accounts, and $22, 246 has been
sent to 40 plan sponsors via check.
Lawmakers
have introduced
a bill to
permanently
amend the nondiscrimination
rules
that apply
to DB plans
that have been
closed or frozen.
SEC Secures Fee Rebates
For Faith-Based 403(b) Plan Sponsors
The Securities and Exchange Commission (SEC) has instituted
a cease-and-desist order against Envoy Advisory Inc. Envoy, in
anticipation of the legal proceedings, responded with an offer of
settlement, which the SEC accepted. Envoy is accused of breaches
of fiduciary duty, inadequate disclosures and compliance deficiencies.
Most of its clients are small to midsize nonprofit,
faith-based organizations that sponsor Employee Retirement
Income Security Act (ERISA) Section 403(b) retirement plans.
As a remedial action, beginning last October, Envoy stopped
12 PLANSPONSOR.com October 2017 Art by Jackie Ferrentino
PBGC Proposes Changes
To Form 5500 Reporting
The Pension Benefit Guaranty Corporation
(PBGC) says it intends to ask the
Office of Management and Budget (OMB)
to extend, for an additional three years,
its approval of the annual information
collection for Form 5500 filing, required
of defined benefit (DB) plan sponsors.
The collection of information is currently
approved through August 31, 2020. In
its notice of intent, the PBGC proposes
two modifications to the 2017 Form 5500
Schedule MB [Multiemployer Defined
Benefit Plan Actuarial Information]
instructions and one to the Schedule SB
[Single Employer Defined Benefit Plan
Actuarial Information] instructions.
Regarding the Schedule MB instructions,
the agency proposes to change these to
now require attachments in the following
two situations: 1) If any of the " Contributions made to plan, "
reported on line 3, include amounts owed for withdrawal liability,
plan administrators would attach, for each contribution, documentation
showing the aggregate amount of withdrawal liability
payments that contribution includes, and 2) For multiemployer
plans that need to enter Code C (critical status) or Code D (critical
and declining status) on Line 4b, current Schedule MB instructions
require them to also report, on line 4F, the year they project
becoming insolvent or emerging from troubled status; heretofore,
basic documentation supporting those projections would be
attached to line 4F. Additionally, the PBGC proposes changes to
http://www.fema.gov/disasters http://www.PLANSPONSOR.com
PLANSPONSOR - October 2017

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