The Internal Revenue Service (“IRS”) recently issued proposed regulations affecting certain reporting deadlines under the Patient Protection and Affordable Care Act (“ACA”). Specifically, proposed regulations would make permanent an automatic 30-day extension for issuing Forms 1095-B and 1095-C to covered individuals and employees, which would otherwise be due by January 31. The proposed regulations also … Continue Reading
The IRS just released some new supplemental guidance on the COBRA premium subsidy in the American Rescue Plan Act (“ARP”). IRS Notice 2021-46, released July 26, 2021 provides additional color on a handful of discrete subsidy issues that had been addressed in earlier guidance but still caused some confusion. The guidance, in Q&A format, addresses: … Continue Reading
On May 18, 2021, the IRS released Notice 2021-31 (the “Notice”) providing guidance on the temporary 100% COBRA premium subsidy under the American Rescue Plan Act of 2021 (“ARP”), summarized generally here. The Notice addresses how to calculate the premium subsidy and the corresponding tax credit available to premium payees, as well as the rules … Continue Reading
On May 18, 2021, the IRS released Notice 2021-31, which provides implementation guidance on the COBRA premium subsidy available under the American Rescue Plan Act of 2021 (ARP). As discussed in our prior blog posts, ARP includes a 100% COBRA premium subsidy for qualifying individuals during periods of COBRA continuation coverage from April 1, 2021 … Continue Reading
As part of our ongoing series on the SECURE Act, this post discusses two key changes affecting defined benefit plans: (1) the ability to start in-service distributions at age 59½ (reduced from 62), and (2) new tools for closed defined benefit plans to pass nondiscrimination tests. Below we discuss each change and its potential impact … Continue Reading
The SECURE Act, included as part of the Further Consolidated Appropriations Act, 2020, was signed into law on December 20, 2019. This post highlights changes that are exclusive to 401(k) plans. For a chronological guide to key retirement plan issues raised by the new law, please click here. Increase to Maximum Default Deferral Rate for … Continue Reading
As previewed in our prior blog post, the recently enacted SECURE Act includes many changes that affect employer-sponsored benefit plans and require the attention of plan administrators. Among these changes, effective for distributions made after December 31, 2019 (for individuals who reach age 70½ after that date), is the delay of the “required beginning date” … Continue Reading
The SECURE Act, included as part of the Further Consolidated Appropriations Act, 2020, was signed into law on December 20, 2019. This new law contains many significant changes that may impact employer-sponsored benefit plans. Given the scope of the law and the number of changes, we will release a series of blog posts exploring the … Continue Reading
At the heart of tax qualified retirement plan compliance is a requirement to timely adopt plans and plan amendments. Failure to adopt plan amendments when required can result in plan disqualification. Accordingly, it is very important for plan sponsors to prove that amendments were properly executed in a timely manner. In a General Legal Advice … Continue Reading
In Revenue Ruling 2019-19, the IRS answered three basic questions about the consequences of an individual’s failure to cash a distribution check from a qualified retirement plan. Uncashed checks arise in a number of contexts and questions on the taxation of uncashed checks should be carefully considered. In the hypothetical posed by the IRS, Individual … Continue Reading
In each case, the answer depends on whether the document and operation are in compliance with the many technical requirements for section 403(b) plans. IRS officials have recently indicated that the IRS expects to launch audit initiatives this summer targeting section 403(b) plan compliance, so now is a good time for employers with section 403(b) … Continue Reading
On May 1, 2019, the IRS released Revenue Procedure 2019-20 which provides for a limited-scope expansion of its determination letter program for individually designed plans. Beginning on September 1, 2019, the IRS will accept determination letter applications submitted for the following types of plans: Statutory hybrid plans (e.g., cash balance or pension equity plans). Applications … Continue Reading
One de-risking tool for employers with defined benefit pension liabilities is to allow participants to receive lump-sum distributions. Although lump sums result in a short-term cash drain, they reduce the plan’s long-term liability—reducing the sponsor’s exposure to contribution volatility. Over the last several years, there has been a question whether lump-sum cashouts may be offered … Continue Reading
By Steven Einhorn and Caroline Cima on Posted in 403(b) Plans
The IRS recently issued Notice 2018-95 to provide transition relief to 403(b) plans that erroneously excluded part-time employees from eligibility to make elective deferrals when the employees should have been eligible to participate under the “once-in-always-in” requirement (“OIAI”). Under the OIAI requirement, once an employee is eligible to make elective deferrals, the employee may not … Continue Reading
In this episode of the Proskauer Benefits Brief, senior counsel Damian Myers and associate Liz Down examine the IRS’s enforcement of the Affordable Care Act’s (ACA) employer shared responsibility mandate. We discuss how the IRS is assessing penalties and offer tips on what employers can do when they receive assessment notices. Be sure to tune in for the … Continue Reading
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
Following the old “better late than never” axiom, the IRS recently announced (see Notice 2018-06) that once again it would be extending the distribution (but not filing) deadline for the Affordable Care Act (ACA) reporting requirements set forth in Sections 6055 and 6056 of the Internal Revenue Code (the “Code”). Under Code Section 6055, health … Continue Reading
The Internal Revenue Service (the “IRS”) has issued Notice 2017-75 (the “Notice”), which provides certain limited relief from the strict requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), in order to pay income taxes on deferrals attributable to services performed before 2009 that are required to be included … Continue Reading
In the wake of massive floods caused by Hurricane Harvey, the Department of Labor (DOL), Internal Revenue Service (IRS), and Pension Benefit Guaranty Corporation (PBGC) have issued initial employee benefit plan guidance. The temporary relief provided in the guidance relates to such things as hardship distributions, plan loans, filing deadlines, plan deposits, and notice requirements. … Continue Reading
The Department of Labor has announced that the new fiduciary conflict of interest rule and related exemptions will begin taking effect on June 9, 2017, ending speculation of further delay. At the same time, the Department announced a relaxed enforcement standard for the rest of 2017. See our blog post on the delayed effective date … Continue Reading
If your 401(k) plan recordkeeper has not talked to your company lately about hardship distributions, it may be time to reach out to the recordkeeper. The short story is that the IRS recently issued an internal memorandum (found here https://www.irs.gov/pub/foia/ig/spder/tege-04-0217-0008.pdf) providing guidance to its employee plans examination group on the substantiation requirements for hardship distributions … Continue Reading
A lot has been written over the last few months about what to do now that the IRS has closed its determination letter program for ongoing individually designed tax-qualified retirement plans. Some see this as cause for celebration because we no longer have to go through the trouble of collecting documents, filling out forms, and … Continue Reading
On April 4, 2017, the U.S. Department of Labor issued a final rule postponing applicability of the conflict of interest rule and related exemptions for sixty days, until June 9, 2017. The stated purpose of the extension is to allow more time to: (i) complete the examination required by President Trump’s February 3, 2017 memorandum, … Continue Reading
On the heels of the Department of Labor’s temporary enforcement policy concerning the DOL conflict of interest rule and related exemptions (see our blog post here), the IRS announced that it is providing relief from excise taxes under Code § 4975 that conforms to the DOL’s temporary enforcement policy described in FAB 2017-01. The IRS’s action … Continue Reading
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