Today's Update

IRS Guidance

Guidance on Claiming Hardship Exemption

Notice 2017-14 provides circumstances under which the hardship exemption from the individual shared responsibility payment may be claimed on a federal income tax return without obtaining a hardship exemption. Document Excerpt This notice supplements Notice 2014-76, 2014-50 I.R.B. 946, by identifying an additional hardship exemption from the individual shared responsibility payment under § 5000A of […]

Proposed Changes to the Definitions of QMACs and QNECs

Proposed changes to the definitions of qualified matching contributions and qualified nonelective contributions that would remove the requirement that the contributions be nonforfeitable when made. Document Excerpt Under these regulations, employer contributions to a plan would be able to qualify as QMACs or QNECs if they satisfy applicable nonforfeitability and distribution requirements at the time […]

Last Day of the Remedial Amendment Period for 403(b) Plans

Revenue Procedure 2017-18 provides that the last day of the remedial amendment period for Section 403(b) arrangements for purposes of Section 21 of Revenue Procedure 2013-22 is March 31, 2020. Document Excerpt This revenue procedure provides that the last day of the remedial amendment period for § 403(b) plans, for purposes of section 21 of […]

Corporate Bond Monthly Yield Curve

Notice 2017-13 provides guidance on the corporate bond monthly yield curve and the corresponding spot segment rates under Section 417(e)(3). Document Excerpt This notice provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under § 417(e)(3), and the 24-month average segment rates under § 430(h)(2) of the Internal Revenue […]

Determination Letter Instructions for Defined Benefit Plans with De-Risking Language

The IRS has updated instructions for defined benefit plans filing for a determination letter with risk transfer language. Document Excerpt Applicants requesting determination letters for defined benefit (DB) plans should identify whether the plan has lump sum risk transfer language in either the cover letter to their application or an attachment. For plans that do, […]

Proposed Regulations: Mortality Tables For determining Present Value

The IRS released proposed regulations setting forth the methodology Treasury and the IRS would use to update the generally applicable mortality tables under Section 430. Document Excerpt SUMMARY: This document contains proposed regulations prescribing mortality tables to be used by most defined benefit pension plans. The tables specify the probability of survival year-by-year for an […]

DOL Guidance

Proposed Best Interest Contract Exemption For Insurance Intermediaries

The DOL releases a proposed Best Interest Contract Exemption that would allow certain insurance intermediaries and the insurance agents and companies they contract with, to receive compensation in connection with fixed annuity transactions that might otherwise give rise to prohibited transactions. Document Excerpt The class exemption proposed in this document would provide relief that is […]

Conflict of Interest FAQs Part II

These set of frequently asked questions released by the DOL regarding its conflict of interest regulations focuses in on those questions raised most often by financial service institutions. Document Excerpt These FAQs are generally limited to investment advice concerning ERISA-covered plans, IRAs, and other plans covered by section 4975(e)(1) of the Internal Revenue Code (Code). […]

DOL Civil Penalties Inflation Adjustment for 2017

The DOL releases its civil penalty adjustments for 2017 including some ERISA penalties including under ERISA Section 715, failing to provide a Summary of Benefits Coverage and various penalties under ERISA Section 502(c). Document Excerpt Link https://www.federalregister.gov/documents/2017/01/18/2017-00614/department-of-labor-federal-civil-penalties-inflation-adjustment-act-annual-adjustments-for-2017

Instructions for Electing HIOS

CMS issues Technical Guidance for self-insured plans on how to elect a federal external review process. Document Excerpt This technical guidance sets forth instructions regarding the election of a Federally-administered external review process using the Health Insurance Oversight System (HIOS). This technical guidance applies to health insurance issuers offering group and individual health coverage that […]

Consumer FAQs on Conflict of Interest Regulations

The DOL has released a new set of Frequently Asked Questions on its fiduciary conflict of interest regulations aimed at consumers. Document Excerpt These Frequently Asked Questions (FAQs) will provide you with information about the Rule and related protections so that you can better understand your rights and benefits as a retirement investor. At the […]

FAQs ACA Implementation Part 36

The Departments have released Frequently Asked Questions regarding the implementation of the Affordable Care Act Part 36. This FAQ deals with issues of the Departments’ religious accommodation for offerings of certain birth control options by religious affiliated entities. Document Excerpt Set out below is an additional Frequently Asked Question (FAQ) regarding implementation of the Affordable […]

PBGC Guidance

ABA Committee Q & A Session with PBGC

The American Bar Association Joint Committee on Employee Benefits releases its annual Q & A session with the PBGC. Document Excerpt The following questions and answers are based on informal discussions between private-sector representatives of the JCEB and PBGC staff members. The questions were submitted by ABA members in advance to the agency and the […]

Allocation of Assets; Interest Assumptions for Valuing Benefits

The PBGC releases updated guidance on the applicable interest rate to be used to value benefits in a single employer plan under Section 4044 for the first quarter of 2017. Document Excerpt This final rule amends the Pension Benefit Guaranty Corporation’s regulation on Allocation of Assets in Single-Employer Plans to prescribe interest assumptions under the […]

PBGC Guarantee Limit

The PBGC has announced higher guaranteed benefit limits for 2017. Document Excerpt WASHINGTON – The Pension Benefit Guaranty Corporation announced today that the guarantee limit for single-employer plans that fail in 2017 will be higher than the limit that applied for 2015 and 2016. Link http://www.pbgc.gov/news/press/releases/pr16-16.html

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 http://www.pbgc.gov/prac/other-guidance/dr/dr16-12.html

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 […]

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 https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2014cv1967-73

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