Today's Update

IRS Guidance

Field Directive for EP on Determination Letters for Pension Equity Plans

The IRS has released a Field Directive governing determination letter request for Pension Equity Plans. Document Excerpt This memorandum supersedes memorandum #TEGE-07-1114-0028, dated October 9, 2014, and provides direction to EP (R&A) employees on the application of the accrued benefit rules under section 411(b)(1)(G) of the Internal Revenue Code (IRC) to pending requests for determination […]

Tax Exempt and Governmental Entitites 2017 Work Plan

The Work Plan includes a summary of 2016 examinations as well as targeted areas for 2017. Document Excerpt Specialty Programs: EP will continue to apply resources into specialty program casework, focusing on EP Team Audit (EPTA)/Large Case, multiemployer (MAP) plans, IRC 403(b)/457(b) plans, cash balance plans, hybrid 401(k) plans (such as those with the age […]

Updated EPCRS Guidance

The IRS has issued Revenue Procedure 2016-51 to reflect changes to EPCRS in light of changes to the IRS’ determination letter program. Document Excerpt .01 Purpose. This revenue procedure updates the comprehensive system of correction programs for sponsors of retirement plans that are intended to satisfy the requirements of § 401(a), 403(a), 403(b), 408(k), or […]

EPCU Partial Termination Compliance Program

The IRS has implemented a partial termination compliance program through its Employee Plans Compliance Unit seeking to determine whether plans that reflected a significant decrease in participants on their 5500 complied with the partial termination requirements where applicable. Document Excerpt We want to determine if the plan did experience a partial termination and did the […]

EPCU Current Project on SIMPLE IRAs

The IRS’ Employee Plans Compliance Unit’s current project is a review as to whether SIMPLE IRAs are being maintained by eligible plan sponsors. Document Excerpt Our goal is to ensure that employers sponsoring a SIMPLE IRA Plan are eligible to sponsor those plans. Link

Temporary Relief For Closed Defined Benefit Plans Extended

Notice 2016-57 extends the temporary nondiscrimination relief for closed defined through 2017. Document Excerpt This notice extends the temporary nondiscrimination relief for closed defined benefit plans that is provided in Notice 2014-5, 2014-2 I.R.B. 276, by making that relief available for plan years beginning before 2018 if the conditions of Notice 2014-5 are satisfied. II. […]

DOL Guidance

FAQ ACA Implementation Part 33

The agencies release Frequently Asked Questions on Implementation of the Affordable Care Act Part 33. Document Excerpt Set out below is an additional Frequently Asked Question (FAQ) regarding implementation of the market reform provisions of the Affordable Care Act. This FAQ has been prepared jointly by the Departments of Labor (DOL), Health and Human Services […]

DOL Compliance Guidance in the Wake of Louisiana Storms

The DOL has released compliance guidance for plans with participants affected by the storms and flooding in Louisiana. Document Excerpt WASHINGTON – In light of the devastation following recent storms and flooding in Louisiana, the U.S. Department of Labor’s Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi announced today an update on […]

Final Rule on State-Based IRAs

The DOL has finalized its rules providing a safe harbor for state-based IRAs for private sector employers. Document Excerpt SUMMARY: This document describes circumstances in which state payroll deduction savings programs with automatic enrollment would not give rise to the establishment of employee pension benefit plans under the Employee Retirement Income Security Act of 1974, […]

Request for Comments on Options for Provision of Contraceptives

The DOL, HHS and IRS are requesting ideas for alternatives for providing contraceptives under plans maintained by employers with religious concerns. Document Excerpt This document is a request for information on whether there are alternative ways (other than those offered in current regulations) for eligible organizations that object to providing coverage for contraceptive services on […]

Proposed Changes to DOL Reporting Regulations

The changes are proposed in order to conform to the proposed changes to the Form 5500. Document Excerpt SUMMARY: This document contains proposed amendments to Department of Labor (DOL) regulations relating to annual reporting requirements under Part 1 of Subtitle B of Title I of the Employee Retirement Income Security Act of 1974, as amended […]

Proposed Revisions to Form 5500

The DOL has issued proposed revisions to the Form 5500. Document Excerpt SUMMARY: This document contains proposed changes to the Form 5500 Annual Return/Report forms, including the Form 5500, Annual Return/Report of Employee Benefit Plan (Form 5500 Annual Return/Report), and the Form 5500–SF, Short Form Annual Return/Report of Small Employee Benefit Plan (Form 5500-SF). The […]

PBGC Guidance

PBGC Announces 2017 Premium Rates

The PBGC has announced premium rates for 2017. Document Excerpt The per-participant flat premium rate for plan years beginning in 2017 is $69 for single-employer plans (up from a 2016 rate of $64) and $28 for multiemployer plans (up from a 2016 rate of $27). For plan years beginning in 2017, the variable-rate premium (VRP) […]

Disaster Relief for Parts of North Carolina

The PBGC has announced disaster relief for those affected by Hurricane Mathew in North Carolina. Document Excerpt The disaster area consists of Beaufort, Bladen, Columbus, Cumberland, Edgecombe, Hoke, Lenoir, Nash, Pitt, and Robeson Counties. Link

FAQs on Proposed Expanded Missing Participant Program

The PBGC released Frequently Asked Questions regarding its proposed expansion of the Missing Participant program. Document Excerpt Under PBGC’s proposal, the Program would expand to cover missing participants in terminated defined contribution plans (such as 401(k) plans and profit-sharing plans). Instead of establishing an IRA at a financial institution for each missing participant account, plans […]

Draft Forms For Proposed Expanded Missing Participants Program

Simultaneously with the release of its proposed regulations to expand the missing participant program, the PBGC also released draft forms. Document Excerpt On September 20, 2016, PBGC issued a proposed rule that would expand its existing Missing Participants Program to cover terminated 401(k) and other defined contribution plans and certain defined benefit plans that are […]

Proposed Regulations Extending PBGC Missing Participant Program

Among other expansions, the proposed regulations would expand the program to cover most defined contribution plans. Document Excerpt This proposed rule is needed to implement amendments to section 4050 of ERISA. Those amendments require PBGC to establish rules to handle the benefits of missing participants and beneficiaries under terminated multiemployer plans covered by title IV […]

PBGC Charts Risk of Insolvency in Upcoming Years for Multiemployer Program Component

The PBGC, in its report to Congress, projects the likelihood of insolvency of its multiemployer plan insurance program over a 20 year period absent a significant premium increase. Document Excerpt Based on these projections, and assuming no changes either in multiemployer plans or in PBGC’s multiemployer program, there is more than a 40 percent likelihood […]

Articles, White Papers & Other Information

SEC Registration Requirements for Certain 401(k) Plans with Brokerage Windows

The SEC in a Q & A (126.41) indicates that certain 401(k) plans that allow participants to invest in company stock through the plan’s brokerage window may be required to register. Document Excerpt Question 126.41 Q: A company sponsors a 401(k) plan that does not offer an employer securities fund in which employee contributions may […]

Seventh Circuit Rejects Dudenhoeffer Special Pleading for Privately Held Stock

The court interpreted the Supreme Court’s special pleading standard as applying to publicly-traded stock only. Document Excerpt GreatBanc’s (and the district court’s) reliance on Dudenhoeffer is unwarranted. In Dudenhoeffer, the Supreme Court held that ERISA fiduciaries conducting ESOP transactions can generally prudently rely on the market value of publicly traded stock, absent special circumstances. Dudenhoeffer, […]

Discussion Draft on Multiemployer Plan Proposed Changes

Representative Kline releases a discussion draft on changes to modernize multiemployer plans. Document Excerpt WASHINGTON, D.C. | September 9, 2016 – Rep. John Kline (R-MN), chairman of the House Committee on Education and the Workforce, today unveiled a discussion draft of a proposal to modernize the nation’s multiemployer pension system. Part of the committee’s ongoing […]

Finance Committee Retirement Plan Proposals

Senate Finance Committee Ranking Member Ron Wyden, D-Ore. released a discussion draft of the Retirement Improvements and Savings Enhancements (RISE) Act that would, among other changes, prohibit additional contributions to a Roth IRA if its total value exceeds $5 million. The proposal would also eliminate “stretch IRAs”, increase the required beginning date age and allow […]

Supreme Court Decision Remanding Contraceptive Case

Unable to reach a decision, the Supreme Court has remanded the religious Affordable Care Act contraceptive case to the lower court for compromise. Document Excerpt In light of the positions asserted by the parties in theirsupplemental briefs, the Court vacates the judgmentsbelow and remands to the respective United States Courtsof Appeals for the Third, Fifth, […]

District Court Decision striking down ACA Cost sharing Payments to Insurers

The court found that the payments violated the Constitutional requirement that Congress must first appropriate the payments. Document Excerpt The question is whether Section 1402 can nonetheless be funded through the same, permanent appropriation. It cannot. Paying out Section 1402 reimbursements without an appropriation thus violates the Constitution. Link

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