Benefits Forward

Proposed Regs on Longevity Annuities Purchased Under DC Plans

administrator — Fri, 03 Feb 2012 22:02:27 +0000

The IRS has released proposed regulations on the purchase of longevity annuities under a defined contribution plan.

Document Excerpt

This document contains proposed regulations relating to the purchase of longevity annuity contracts under tax-qualified defined contribution plans under section 401(a) of the Internal Revenue Code (Code), section 403(b) plans, individual retirement annuities and accounts (IRAs) under section 408, and eligible governmental section 457 plans. These regulations will provide the public with guidance necessary to comply with the required minimum distribution rules under section 401(a)(9). The regulations will affect individuals for whom a longevity annuity contract is purchased under these plans and IRAs (and their beneficiaries), sponsors and administrators of these plans, trustees and custodians of these IRAs, and insurance companies that issue longevity annuity contracts under these plans and IRAs. This document also provides a notice of a public hearing on these proposed regulations.Show citation box

Link http://www.gpo.gov/fdsys/pkg/FR-2012-02-03/pdf/2012-2340.pdf

Highlight of Changes to Final Service Provider Disclosure Regulations

administrator — Thu, 02 Feb 2012 23:33:21 +0000

In addition to issuing the final regulations with a delayed effective date, the DOL has also issued a Summary highlighting the changes made in the final regulations.

Document Excerpt

Link http://www.dol.gov/ebsa/408b2changes.html

Fact Sheet On Service Provider Disclosure Final Regulations

administrator — Thu, 02 Feb 2012 23:30:57 +0000

In conjunction with the issuance of final regulations, the DOL has issued a Fact Sheet on the final service provider disclosure regulations.

Document Excerpt

The Employee Retirement Income Security Act (ERISA) requires plan fiduciaries, when selecting and monitoring service providers and plan investments, to act prudently and solely in the interest of the plan’s participants and beneficiaries. Responsible plan fiduciaries also must ensure that arrangements with their service providers are “reasonable” and that only “reasonable” compensation is paid for services. Fundamental to the ability of fiduciaries to discharge these obligations is obtaining information sufficient to enable them to make informed decisions about an employee benefit plan’s services, the costs of such services, and the service providers.

Link http://www.dol.gov/ebsa/newsroom/fs408b2finalreg.html

DOL Finalizes and Delays Service Provider Level Disclosure

administrator — Thu, 02 Feb 2012 23:26:57 +0000

The Department of Labor has both finalized and delayed the application of its service provider fee disclosure regulations.

Document Excerpt

This document contains a final regulation under the Employee Retirement Income Security Act of 1974 (ERISA or the Act) requiring that certain service providers to pension plans disclose information about the service providers’ compensation and potential conflicts of interest. These disclosure requirements are established as part of a statutory exemption from ERISA’s prohibited transaction provisions. This regulation will affect pension plan sponsors and fiduciaries and certain service providers to such plans.

Link http://www.dol.gov/ebsa/pdf/2012-02262-PI1.pdf

Treatment of Rollover to Defined Benefit

administrator — Thu, 02 Feb 2012 16:52:47 +0000

Revenue Ruling 2012-4 provides guidance as to whether a defined benefit plan that accepts an eligible rollover distribution from a defined contribution plan maintained by the same employer satisifes Section 411 and 415 where the defined benefit plan provides an annuity for the rollover funds.

Document Excerpt

Does a qualified defined benefit pension plan that accepts a direct rollover of an eligible rollover distribution from a qualified defined contribution plan maintained by the same employer satisfy §§ 411 and 415 of the Internal Revenue Code in a case in which the defined benefit plan provides an annuity resulting from the direct rollover that is determined by converting the amount directly rolled over into an actuarially equivalent immediate annuity using the applicable interest rate and the applicable mortality table under § 417(e)?

Link http://www.irs.gov/pub/irs-drop/rr-12-04.pdf

Guidance on Survivor Benefit Rules

administrator — Thu, 02 Feb 2012 16:46:11 +0000

Revenue Ruling 2012-3 provides guidance as to how the QJSA and QPSA rules apply when a deferred annuity contract is purchased under a profit sharing plan.

Document Excerpt

How do the qualified joint and survivor annuity (“QJSA”) and the qualified preretirement survivor annuity (“QPSA”) rules, described in §§ 401(a)(11) and 417 of the Internal Revenue Code, apply when a deferred annuity contract is purchased under a profit-sharing plan in the situations described below?

Link http://www.irs.gov/pub/irs-drop/rr-12-03.pdf

Guidance on HSA Eligibility for certain Individuals

administrator — Wed, 01 Feb 2012 20:06:57 +0000

Notice 2012-14 addresses whether individuals who are eligible for services at an Indian Health Services facility are eligible individuals for purposes of Health Savings Accounts.

Document Excerpt

This notice provides guidance on whether an individual eligible to receive medical services at an Indian Health Service facility is an “eligible individual” with respect to Health Savings Accounts (HSAs) under § 223 of the Internal Revenue Code (the Code).

Link http://www.irs.gov/pub/irs-drop/n-12-14.pdf

IRS to Hold Phone Forum on 401(k) Questionaire

administrator — Wed, 01 Feb 2012 15:01:33 +0000

The IRS will hold a phone forum on March 6, 2012 on the results from its Quesionaire and problems found.

Document Excerpt

The 401(k) Questionnaire Interim Report, its next steps, and current issues found in 401(k) audits will be discussed by Monika Templeman, Director of Employee Plans Examinations, along with IRS staff members Janice Gore and Rhonda Migdail. Email specific issues that you would like addressed to ep.phoneforum@irs.gov by February 17.

Link http://www.irs.gov/retirement/article/0,,id=218995,00.html

PBGC Letter to American Airlines’ Employees

administrator — Thu, 26 Jan 2012 21:13:42 +0000

In response to communications from American Airlines to its employees regarding concerns in the event it should terminate its pension plan, the PBGC has written its own communication and analysis.

Document Excerpt

WASHINGTON—The Pension Benefit Guaranty Corporation today pushed back on misleading statements to American Airlines employees by its management about their pension plans.

Link http://www.pbgc.gov/news/press/releases/pr12-14.html

Fall Regulatory Agenda

administrator — Thu, 26 Jan 2012 14:44:24 +0000

The Office of Management and Budget releases the DOL Fall 2011 regulatory agenda and rule status report.

Document Excerpt

Link http://www.reginfo.gov/public/do/eAgendaMain?operation=OPERATION_GET_AGENCY_RULE_LIST¤tPub=true&agencyCd=1200&Image58.x=54&Image58.y=13&Image58=Submit