Today's Update

IRS Guidance

Additional Guidance on Hybrid Plans

The IRS has released final regulations regarding hybrid. Document Excerpt This document contains final regulations providing guidance relating to applicable defined benefit plans. Applicable defined benefit plans are defined benefit plans that use a lump sum-based benefit formula, including cash balance plans and pension equity plans, as well as other hybrid retirement plans that have […]

Final Hybrid Plan Regulations

The IRS has issued final regulations governing hybrid plans that finalize the 2010 proposed regulations.   Document Excerpt This document contains final regulations providing guidance relating to applicable defined benefit plans. Applicable defined benefit plans are defined benefit plans that use a lump sum-based benefit formula, including cash balance plans and pension equity plans, as […]

Additional Cafeteria Mid-Year Election Changes

Notice 2014-55 provides additional situations in which a participant may make mid-year election changes under a Cafeteria Plan. Document Excerpt  This notice expands the application of the permitted change rules for health coverage under a § 125 cafeteria plan (cafeteria plan). In particular, this notice addresses two specific situations in which a cafeteria plan participant […]

Proposed Approach to 4980H Look-Back Measurement Method

  Notice 2014-49 describes a proposed approach to the application of the look-back measurement period which may be used for purposes of determining full-time employee status for purposes of Section 4980H. Document Excerpt This notice describes a proposed approach to the application of the look-back measurement method, which may be used to determine if an […]

Guidance on Allocation of After-Tax Amounts To Multiple Destinations

Notice 2014-54 provides guidance on the allocation of after-tax amounts when a distribution is going to more than one location. Document Excerpt  This notice provides rules for allocating pretax and after-tax amounts among disbursements that are made to multiple destinations from a qualified plan described in § 401(a) of the Internal Revenue Code. These rules […]

Transitional Amendments to Satisfy Market Rate of Return

The IRS has released proposed regulations and request for comments regarding the market rate of return applicable to hybrid plans. Document Excerpt This document contains proposed regulations that would provide guidance regarding certain amendments to applicable defined benefit plans. Applicable defined benefit plans are defined benefit plans that use a lump sum-based benefit formula, including […]

DOL Guidance

Request for Information on Standards For Brokerage Windows

  The DOL has released a Request for Information regarding standards that should apply for brokerage windows under participant-directed plans. Document Excerpt The Request for Information contained in this Notice will assist the Department in determining whether, and to what extent, regulatory standards or other guidance concerning the use of brokerage windows by plans are […]

Updated Guidance on Dealing With Missing Participants

Field Assistance Bulletin 2014-01 provides updated guidance on dealing with missing participants when a defined contribution plan terminates. It updates and replaces the prior Field Assistance Bulletin previously issued. Document Excerpt This Bulletin replaces Field Assistance Bulletin 2004-02 (FAB 2004-02) and reflects important changes that have occurred in the ten years since the publication of […]

Definition of “State” For purposes of ACA

The CMS releases a letter discussing the definition of “state” for purposes of the Affordable Care Act and the impact on Puerto Rico and other U.S. Territories. Document Excerpt After a careful review of this situation and the relevant statutory language, HHS has determined that the new provisions of the PHS Act enacted in title […]

ACA FAQ Implementation Part XX

The DOL has released Part XX of its Frequently Asked Questions regarding the implementation of the Affordable Care Act specifically discussing dropping or reducing contraceptive coverage. Document Excerpt Q: My closely held for-profit corporation’s health plan will cease providing coverage for some or all contraceptive services mid-plan year. Does this reduction in coverage trigger any […]

Supreme Court Rejects Moench Presumption

Rejecting the analysis of virtually every circuit that has reviewed the issue, the Supreme Court unanimously rejected the Moench presumption of prudence. Document Excerpt Link Held: ESOP fiduciaries are not entitled to any special presumption ofprudence. Rather, they are subject to the same duty of prudence thatapplies to ERISA fiduciaries in general, §1104(a)(1)(B), except that […]

Final Regulations on 90 Day Waiting Period

HHS, DOL and Treasury have issued final regulations on the Affordable Care Act’s 90 day Waiting Period. Document Excerpt These final regulations clarify the maximum allowed length of any reasonable and bona fide employment-based orientation period, consistent with the 90-day waiting period limitation set forth in section 2708 of the Public Health Service Act, as […]

PBGC Guidance

October lump sum Rates

The PBGC releases the interest rate for lump sums payable in October. Document Excerpt The immediate interest rate for valuing lump sum payments for the month of October 2014 is 1.00% and the deferred interest rate I1 is 4.00%, I2 is 4.00%, and I3 is 4.00%. Link http://pbgc.gov/prac/interest/monthly.html?cid=COLA01ABSEP1520141&source=govdelivery&utm_medium=email&utm_source=govdelivery

Moratorium on 4062(e) Enforcement

The PBGC has announced a moratorium on ERISA Section 4062(e) enforcement. Document Excerpt WASHINGTON — Today the Pension Benefit Guaranty Corporation announced a moratorium, until the end of 2014, on the enforcement of 4062(e) cases. The moratorium will enable PBGC to ensure that its efforts are targeted to cases where pensions are genuinely at risk. […]

July Lump Sum Rates

The PBGC has published the lump sum rate applicable for July. Document Excerpt The immediate interest rate for valuing lump sum payments for the month of July 2014 is 1.25% and the deferred interest rate I1 is 4.00%, I2 is 4.00%, and I3 is 4.00%. (The immediate interest rate for June 2014 was 1.25% for […]

Multiemployer Plan Regulations on Valuation and Notice

The PBGC has released its final regulations governing the valuation and notice requirements for multiemployer plans. Document Excerpt This final rule amends the Pension Benefit Guaranty Corporation’s (PBGC) multiemployer regulations to make the provision of information to PBGC and plan participants more efficient and effective and to reduce burden on plans and sponsors. The amendments […]

June Lump Sum Rates

The PBGC releases the June lump sum interest rates. Document Excerpt The immediate interest rate for valuing lump sum payments for the month of June 2014 is 1.25% and the deferred interest rate I1 is 4.00%, I2 is 4.00%, and I3 is 4.00%. (The immediate interest rate for May 2014 was 1.50% for lump sum […]

PBGC Relief For Parts of Florida

  The PBGC has recognized disaster relief for affected plans in parts of Florida.   Document Excerpt Pension Benefit Guaranty Corporation (“PBGC”) is waiving certain penalties and extending certain deadlines in response to the Severe Storms, Tornadoes, Straight-Line Winds and Flooding that began on April 28, 2014, in Florida.     Link   http://www.pbgc.gov/res/other-guidance/dr/dr14-05.html

Articles, White Papers & Other Information

DC Circuit Holds that Subsidies May Not be Extended to Federal Exchanges

Issuing its ruling shortly before the Fourth Circuit upheld such subsidies, the DC Circuit holds that the Affordable Care Act’s subsidies may not be extended to those who purchase insurance through a Federal Exchange as the statute provides for such subsidies only when purchased under a state maintained exchange. Document Excerpt We conclude that appellants […]

Fourth Circuit Upholds Federal Exchange Subsidies

Concluding that the statute and the legislative history was not clear, the Fourth Circuit upheld the regulatory interpretation allowing subsidies to those who otherwise qualify but who purchase under Federally established exchanges. Document Excerpt It is thus entirely sensible that the IRS would enact the regulations it did, making Chevron deference appropriate. Confronted with the […]

Definition of “State” For purposes of ACA

The CMS releases a letter discussing the definition of “state” for purposes of the Affordable Care Act and the impact on Puerto Rico and other U.S. Territories. Document Excerpt After a careful review of this situation and the relevant statutory language, HHS has determined that the new provisions of the PHS Act enacted in title […]

HHS Announces Auto Enrollment Plan For Marketplace for 2015

  In an effort to simplify and avoid some of the turmoil that met its initial enrollment period, HHS has announced a method by which current Marketplace participants may be automatically reenrolled in their current plan for 2015.   Document Excerpt Today, the U.S. Department of Health and Human Services (HHS) expects to announce its […]

Supreme Court Rejects Moench Presumption

Rejecting the analysis of virtually every circuit that has reviewed the issue, the Supreme Court unanimously rejected the Moench presumption of prudence. Document Excerpt Link Held: ESOP fiduciaries are not entitled to any special presumption ofprudence. Rather, they are subject to the same duty of prudence thatapplies to ERISA fiduciaries in general, §1104(a)(1)(B), except that […]

Inherited IRAs Not Excluded From Debtor’s Bankruptcy Estate

The Supreme Court unanimously ruled that inherited IRAs are not retirement funds for purposes of the bankruptcy exemption. Document Excerpt   Link http://www.supremecourt.gov/opinions/13pdf/13-299_mjn0.pdf

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