The Internal Revenue Service has announced its cost-of-living adjustments applicable to dollar limitations for retirement plans and Social Security generally effective for Tax Year 2017 (see IR-2016-141). Most notably, the limitation on annual salary deferrals into a 401(k) plan (along with the other retirement plan limitations) remains unchanged. The dollar limits are as follows:
Articles Discussing General Topics In Employee Benefits.
The ‘Missive Gap’ — Employers to Cope Without Updated Plan IRS Determination Letters. For employers that sponsor and maintain individually designed qualified retirement plans (“IDPs”), such as 401(k), profit-sharing, or traditional defined benefit pension plans, beginning January 1, 2017, no IDP determination letter applications will be accepted by the IRS except in certain situations.
This is another in our series addressing the continuing deterioration of multi-employer defined benefit pension plans.
If you ask, plan administrators will tell you that for every deadline or specified time limit that is imposed by law upon plan participants for taking action with respect to an employee benefit plan, there are always a significant number of participants who come forward with one or more “excuses” why they could not meet the deadline. Often these “excuses” are legitimate. However, only occasionally is there a legally authorized protocol provided to plan administrators and participants which can remedy the circumstance of the missed deadline. Such an occasion occurred on August 24, 2016.
In Revenue Procedure 2016-47, which was released by the Internal Revenue Service on August 24, 2016, the IRS prescribes eleven circumstances in which taxpayers may qualify for automatic extension of the 60-day deadline for completing a rollover to an IRA or to an employer’s tax-qualified plan. The procedure described in the Revenue Procedure is effective starting August 24, 2016.
What the New Fiduciary Rule Means for Plan Sponsors and Fiduciaries. On April 8, 2016, the Department of Labor published its final rule on who is a fiduciary as a result of giving investment advice under the Employee Retirement Income Security Act of 1974 (the “New Fiduciary Rule”) as well as related exemptions. Although the New Fiduciary Rule is targeted mainly at the providers of investment advice, it contains a number of provisions that are relevant to sponsors and fiduciaries of qualified retirement plans (e.g., 401(k) plans and traditional pension plans).
Many employers have begun receiving Health Insurance Marketplace notices – letters stating that a particular employee reported that he or she wasn’t offered affordable minimum value coverage for one or more months during 2016. The letter states that the employee has been determined to be eligible for subsidized Marketplace coverage. This means, if the employer is an “applicable large employer” for purposes of the Affordable Care Act’s employer shared responsibility penalties, the employer may be subject to penalties with respect to that employee.
Last year’s announcement by the Internal Revenue Service (IRS) of the elimination of the current five-year remedial amendment cycle system for determination letter approval of restated individually-designed qualified plan documents provoked bitter criticism and calls to reverse course. The Service cited budget constraints allowing a median time of only three hours of agent review per plan for the necessity of severely restricting the issuance of letters.
In her latest video, Sue discusses how to meet the needs of the diverse workforce and different generations, including:
Like many other multiemployer pension plans, the Central States, Southeast and Southwest Areas Pension Fund was hit very hard by the financial crisis in 2008. In response, the Employee Retirement Income Security Act, or ERISA, was amended to allow Central States and other critically underfunded plans to remain solvent through the approval of a so-called “rescue plan.” On May 6, 2016, Central States’ proposed Rescue Plan was rejected by the IRS. This would have huge implications not just for the employers who contribute to the plan, but also for the Pension Benefit Guarantee Corporation (PBGC) and for participants and retires. Joining the WPI to examine the implications of the rejection of Central State’s plan was Littler shareholder Mike Congiu.
Since the beginning of the year, Nexsen Pruet tax and employee benefits attorney Sue Odom has been producing videos about various legal issues that she follows as part of her law practice.
For the past several months, we have been reporting on the application filed by the Central States Southeast and Southwest Areas Pension Fund (“Central States”) to the Department of Treasury to reduce “core” benefits to participants. This extraordinary remedy is permitted by the Kline-Miller Multiemployer Pension Reform Act of 2014 (“Kline-Miller Act”).
In recent weeks, much of the discussion around a recent Supreme Court case, Gobeille, has focused on ERISA preemption. But for fiduciaries of benefit plans the case can serve as a reminder of important duties that often go unexplored—protecting the private data of participants.
Nexsen Pruet tax and employment benefits attorney Sue Odom looks a compliance ’soft spot’ for companies. In this new video, Sue discusses what are known as Section 125 Plans, Cafeteria Plans and Premium Conversion Plans.
Surcharge and Life Insurance Plans: Plugging the Dike against Rising Tide of Employer Fiduciary Liability after Amara. Until the United States Supreme Court decided CIGNA Corp. v. Amara, in 2011, jurists had uniformly interpreted the Court’s earlier guidance under the Employee Retirement Income Security Act (ERISA) as prohibiting, with only minor exceptions, virtually any form of monetary relief for breach of fiduciary duty under the “catch-all” section of ERISA’s civil remedies provisions. That section authorizes “appropriate equitable relief.”