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:

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. 

Non-Qualified Plan Distributions: State Income Tax Sourcing Rules

Are distributions from Non-Qualified Deferred Compensation Plans subject to state income "source" tax (i.e. can the state in which the income was earned impose its state income tax on the distributions from the plan, even though the recipient resides in a different state when reeicing the distribution)? The answer is "yes" unless the distribution meets one of two requirements.

Focus on Compliance: Applying Non-Qualified Plan Deferral Elections to the Final Payroll Period for the Year

Under Code Section 409A, an annual salary deferral election generally applies to all salary earned during the calendar year. If this concept were to apply to salary earned during the last payroll period of the year that crosses into the next year, human resources would need to  identify the salary earned on or before December 31 and the salary earned after December 31, apply the appropriate deferral elections to each portion, (iii) communicate the two components of deferred compensation to the plan’s record keeper in order to assign the appropriate payment schedule to each portion and then (iv) communicate the combined deferral amount to payroll for processing.

Cash Management Considerations for ESOP Repurchase Obligations

Funding a plan with company stock can be a great finance and employee motivational tool. But eventually, the piper must be paid. Employees will eventually terminate employment and want a cash payout from the ESOP.

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.

Tax Reform Recap

On December 22, 2017, President Trump signed into law the major tax reform bill known as the “Tax Cuts and Jobs Act.”  Now the hard work is beginning. 

Tis the Season: Year-End Testing Often Requires Corrective Action

Each year, 401(k) plans must pass a series of nondiscrimination tests to ensure that the company owners and key personnel are not benefitting disproportionately compared to lower paid employees.

Our Numbers are Up!

Newport Group is pleased to report our latest corporate numbers, which reflect our firm reaching some significant milestones.

Federal Reserve Board Releases Stress-Test Scenarios for 2018

Thirty-eight of the largest banking institutions in the United States will be subject to the Federal Reserve’s 2018 Comprehensive Capital Analysis and Review (CCAR) – up from 34 in 2017.

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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 InterServ, LLC, an SEC-registered investment adviser. Newport Group Securities, Inc. and InterServ, 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 adviser. 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.