On August 14, 2014, the U.S. Department of Labor (DOL) provided new guidance to plan fiduciaries of terminated defined contribution plans for locating missing and unresponsive participants in order to distribute their benefits. The guidance comes in the form of Field Assistance Bulletin (FAB) No. 2014-01, which replaces FAB No. 2004-02. As discussed below, the guidance may also prove useful in finding missing and unresponsive participants in other circumstances as well.
IRS Says PCORI Fees Are Deductible
As employers plan for paying various health care reform fees, one question that arises is whether the fees owed are tax deductible. In particular, it has been unclear whether the fees paid pursuant the Affordable Care Act to fund the Patient-Centered Outcomes Research Institute (“PCORI”) would be deductible business expenses under Section 162 of the Internal Revenue Code (the “Code”). On June 7, 2013, the Office of the Chief Counsel of the IRS released a memorandum concluding that, in general, the payment of the PCORI fee should be tax deductible as an ordinary business expense.
U.S. Supreme Court Decision on DOMA May Impact Status of Children of Same-Sex Spouses for Employee Benefits Purposes
The Defense of Marriage Act (DOMA) defines marriage at the federal level as a legal union between one man and one woman and excuses states from any obligation to recognize same-sex marriages recognized in any other state. As a result, many states have enacted so-called “mini-DOMA” laws providing that those states will not recognize for any purpose same-sex marriages recognized in other states.
As has been widely reported, DOMA’s constitutionality is currently under consideration by the U.S. Supreme Court in United States v. Windsor and a decision is expected in June. If DOMA is struck down, employers and other benefit plan sponsors should consider the potential effects not only on the definition of “spouse” for benefits purposes, but also the definition of “child.”
American Taxpayer Relief Act Affects Mass Transit Benefits and Other Employee Benefits
On January 2, 2013, President Obama signed the American Taxpayer Relief Act of 2012 (“ATRA”) into law. ATRA, adopted as an alternative to stepping over the “fiscal cliff,” preserves most of the Bush-era tax cuts and reinstates several other lapsed tax provisions. Several provisions of ATRA are of particular interest to employers, employees, and employee benefit administrators, because they offer new options for retirement planning or extend certain existing benefits options. Even more recently, the IRS has issued guidance with respect to certain key aspects of ATRA related to qualified transportation fringe benefits.