Topic: Regulatory Updates

Update: Hardship Distributions for Damaged Residences 

Recently enacted federal tax legislation made a change to the types of personal casualty losses that qualify for a casualty deduction under Section 165 of the Internal Revenue Code. Starting in 2018, only casualty losses attributable to a federally declared disaster will be deductible. This change will be in effect from 2018 through 2025 and immediately affects many 401(a), 401(k), and 403(b) plans that allow for hardship distributions.

2018 Budget Act Contains Retirement Provisions

The Bipartisan Budget Act of 2018 (the “Act”) was enacted on February 9, 2018.  The Act includes a number of provisions that will affect qualified retirement plans.

Update: New Disability Claims Regulations

On January 5, 2018, the Department of Labor announced that the new disability claims procedure regulations will go into effect on April 1, 2018. As we previously shared, the Department had delayed the effective date of the new rules from January 1, 2018 to April 1, 2018, in order for it to consider comments and data submitted by interested parties regarding the impact the new rules would have on costs and, ultimately, on workers’ access to disability insurance coverage. 

New Tax Law Has Minimal Impact on Retirement Plans

On December 22, 2017, Public Law No. 115-97, the widely debated new tax legislation, was signed into law.  This law, which was originally called the Tax Cuts and Jobs Act (but that now has no official name due to procedural rules) had, at various stages of the legislative process, a great number of provisions that would have impacted retirement plans.  However, the following are the only provisions in the final version of the law that we anticipate will have an impact (direct or indirect) on retirement plans:

Department of Labor to Review Disability Claims Regulations

The Department of Labor recently delayed the effective date of final disability claims procedures regulations. This is to give the Department additional time to review the regulation under Executive Order 13777, which directs federal agencies to review existing regulations and make recommendations regarding those that can be repealed, replaced, or modified to make them less burdensome.

2018 IRS Pension Plan Limits

Each year, the Internal Revenue Service publishes updated dollar limitations for tax-qualified defined benefit and defined contribution plans. The limits are important for tax-qualified plans, as well as many non-qualified plans.
The IRS announced that there will be cost of living adjustments to certain of the qualified plan limitations for 2018.

Tax Reform Update

An analysis of current tax reform proposals, both from the Administration and Congress, and their potential implications for retirement plans.

Potential Tax Reform Implications for COLI and BOLI

Implications of the 2016 election relative to the taxation of life insurance, particularly the taxation of bank-owned life insurance (BOLI) and corporate owned life insurance (COLI).

2017 IRS Pension Plan Limits

Each year, the Internal Revenue Service publishes updated dollar limitations for tax-qualified defined benefit and defined contribution plans. The IRS announced that there will be cost of living adjustments to certain qualified plan limitations for 2017.

New Proposed Guidance for Deferred Compensation Plans

Along with proposed regulations under Code Section 409A that were issued on June 22, 2016, the Internal Revenue Service simultaneously published proposed regulations providing updated guidance on deferred compensation plans under Internal Revenue Code Section 457. The regulations will generally apply to amounts deferred in calendar years after the date they are finalized, and to amounts deferred prior to that date that were not previously included in income. Until finalized, employers may rely on the proposed regulations.

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Newport Group, Inc. and its affiliates provide recordkeeping, plan administration, trust and custody, consulting, fiduciary consulting, insurance and brokerage services. Fiduciary consulting services are provided through Newport Group Securities, Inc., an SEC-registered investment adviser and FINRA-registered broker-dealer, and Newport Group Consulting, LLC, an SEC-registered investment adviser. Newport Group Securities, Inc. and Newport Group Consulting, LLC are affiliates of Newport Group, Inc. All securities transactions are provided through Newport Group Securities, Inc., in its role as broker-dealer. All fiduciary consulting services are provided through the registered investment advisers. When offering variable insurance products, Newport Group Securities, Inc. acts solely in its capacity as a broker-dealer. Trust and custody services provided by Newport Trust Company, a New Hampshire state chartered trust company and wholly owned subsidiary of Newport Group, Inc.