Employee Benefits & Executive Compensation Blog

The View from Proskauer on Developments in the World of Employee Benefits, Executive Compensation & ERISA Litigation

Category Archives: 401(k) Plans

Subscribe to 401(k) Plans RSS Feed

Final Hardship Distribution Regulations, Part Three: New Disaster Relief and Expanded Sources Available for Hardship Distributions

The IRS recently released final regulations making a number of changes to the rules applicable to hardship distributions from 401(k) and 403(b) plans.  Concluding our three-part series on the final regulations, this blog entry will focus on the following changes to the hardship distribution rules: (1) modifications to the list of safe harbor expenses that … Continue Reading

Final Hardship Distribution Regulations, Part Two: Implementation Considerations

As discussed in our prior blog entry, the IRS recently released final regulations making a number of significant changes to the rules applicable to hardship distributions from 401(k) and 403(b) plans.  As part of our continuing series on these final regulations, this blog entry will focus on two specific issues: (1) the elimination of the … Continue Reading

Final Hardship Distribution Regulations, Part One: Key Changes and Deadlines for Plan Sponsors

Last week, the Department of Treasury and the IRS issued final regulations regarding hardship distributions from 401(k) and 403(b) plans.  The final regulations respond to comments based on earlier proposed regulations and make a number of significant changes to the existing IRS rules that apply to hardship distributions. Given the detailed material in the regulatory … Continue Reading

[Podcast]: Proposed IRS Regulations Affecting 401(k) and 403(b) Plans

In this episode of the Proskauer Benefits Brief, Paul Hamburger co-chair of Proskauer’s Employee Benefits & Executive Compensation Group, and associate Steven Einhorn discuss the recently proposed IRS regulations addressing the hardship withdrawal rules affecting 401(k) and 403(b) plans. We will discuss challenging questions employers and administrators face as they work through the new requirements, which … Continue Reading

Treasury and IRS Issue Eagerly-Awaited Guidance on Hardship Distributions – with a Few Surprises

Last Friday, the IRS issued eagerly-awaited proposed regulations regarding hardship distributions under section 401(k) and 403(b) plans (the “Proposed Regulations”). The Proposed Regulations primarily address hardship distribution issues raised by the Bipartisan Budget Act of 2018 (the “Budget Act”). (For our earlier blog entry summarizing these issues, click here.) At the same time, the Proposed … Continue Reading

[Podcast]: Steps to Reduce Risk of Claims Associated With 401K Plans

In this episode of the Proskauer Benefits Brief, partner Myron D. Rumeld and associate Joseph Clark discuss participant-directed defined contribution (DC) plans and the lawsuits against the fiduciaries and service providers which are responsible for administering them. We will examine the best practices that can achieve favorable results for plan participants and the practices that can avert litigation or enable … Continue Reading

The Budget Act Relaxes Hardship Withdrawal Rules, But Some Changes May Not Apply to 403(b) Plans

On Feb. 9, 2018, Congress passed, and the president signed, the Bipartisan Budget Act of 2018 (the “Budget Act”). As we previously discussed here, the Budget Act contains a number of provisions that affect qualified retirement plans.  These changes include expanding the type of funds that can be distributed under Code Section 401(k) in the … Continue Reading

The Bipartisan Budget Act’s Impact on Retirement Plans

On Friday, February 9, 2018, Congress passed, and the President signed, the Bipartisan Budget Act of 2018 (the “Budget Act”). The Budget Act contains a number of provisions that affect qualified retirement plans.  Plan sponsors should consider the impact of the Budget Act on their retirement programs. Hardship Withdrawals. The Budget Act relaxes the rules … Continue Reading

IRS Significantly Liberalizes Permitted Mid-Year Changes to Safe Harbor Plans

On January 29, 2016, the IRS issued Notice 2016-16 that provides guidance on mid-year changes to a safe harbor plan under sections 401(k) and 401(m) of the Internal Revenue Code. The guidance provides that a mid-year change either to a safe harbor plan or to a plan’s safe harbor notice does not violate the safe … Continue Reading

White House Budget Recommends Elimination of in-Plan Roth Rollovers of After-Tax Contributions

As reported here, the Internal Revenue Code currently permits a plan design that allows plan participants to convert non-Roth after-tax contributions to Roth contributions through in-plan Roth rollovers.  This design would allow a participant to maximize deferrals to a defined contribution plan while limiting future tax liability.  However, among the White House’s Fiscal Year 2016 … Continue Reading

In-Plan Roth Rollovers and After-Tax Contributions: Maximizing Deferrals with Limited Future Tax Liability

Please refer to our February 26, 2015 blog post for potential legislative developments regarding the ability to convert after-tax contributions to Roth contributions. Plan sponsors seeking to provide employees with the ability to make after-tax contributions to a 401(k) plan may be interested in adding, along with the common Roth contribution feature, non-Roth after-tax contribution and … Continue Reading

401(k) Plan Participant Waived ERISA Stock-Drop Claim

The D.C. Circuit affirmed the decision of a district court that Plaintiff Patrick Russell, a 401(k) plan participant, had knowingly waived his right to assert an ERISA stock-drop claim based on, among other things, the alleged imprudence of maintaining an employer stock fund as an investment option.  Russell argued that the district court erred by … Continue Reading

SunTrust Plan Participants’ Stock-Drop Claims Tossed A Second Time

A federal district court in Georgia recently dismissed a suit brought by participants in the SunTrust Bank 401(k) savings plan alleging fiduciary breaches based on defendants’ decision to continue permitting investment in SunTrust stock while its value declined during the subprime mortgage crisis. The court had previously granted in part and denied in part SunTrust’s … Continue Reading
LexBlog