COLLECTED WISDOM™ on Compliance and Regulatory Related Issues
This page gathers relevant information for 401k plan managers, sponsors, administrators, recordkeepers and others with plan fiduciary and administrative responsibilities. It covers many aspects of compliance and regulatory related issues.
This archive contains not only the most current material on the topic, but also older items that are still relevant, provide background, perspective or are germane to the topic.
If you find a broken link or an items that you feel is outdate, irrelevant or no longer appropriate, please let us know.
Abstract: Effective January 1 of this year was the right of participants to an extended period to rollover their defaulted loan amount, if the default arose following unemployment or the termination of a plan. The statue has a fundamental flaw: it confuses the rules related to the taxation of the loan with the distribution rules related to defaulted loans. The practical effect of this confusion is that it is virtually impossible to effectively use. Making it work requires the acceleration of the reduction of the plan's retirement benefit, which runs counter to the fiduciary obligations under a loan program.
Source: Businessofbenefits.com, June 2018
Abstract: Many 401k plans may need plan amendments to either bring them into compliance with TCJA and the Budget Act, offer the distribution opportunities now permitted following this legislation, or comply with regulations implementing these provisions that have yet to be written. The deadline for adopting these amendments may not be until December 31, 2019, or later and some plans may not require amendments at all.
Source: Blr.com, June 2018
Abstract: Recent IRS guidance and legislative changes discussed here show that this is an area where both plan sponsors and participants may still have questions.
Source: Laboremploymentperspectives.com, June 2018
Abstract: The Tax Cuts and Jobs Act made several changes to the tax code that eliminated the ability for employers to deduct and employees to exclude from income certain fringe benefits received by the employee. As a result, plan administrators will need to review their 401k plan's definition of compensation and may need to make appropriate changes.
Source: Ktserisacorner.com, June 2018
Abstract: The Tax Cuts and Jobs Act enacted late in 2017 and the Bipartisan Budget Act enacted in early February this year both made changes to the laws regarding rollovers from retirement plans and when a plan must accept certain rollovers. The tax notices that all qualified retirement plans provide to participants when their employment terminates need to be updated to reflect the changes to these rules.
Source: Winstead.com, June 2018
Abstract: As a plan sponsor or financial advisor, it is paramount that you maintain an open line of communication with your TPA or recordkeeper responsible for preparing this filing to avoid potential penalties and fines from both the IRS and the DOL. To avoid delays in the preparation and filing of the form, here are some things you can do as the plan sponsor to assist your service provider.
Source: Legacyrsllc.com, June 2018
Abstract: Mistakes are made when running workplace retirement plans. Marcia Wagner, the founder of The Wagner Law Group, brings her over thirty years of experience working on ERISA matters to this podcast and shares her list of the top 10 mistakes she sees retirement plan sponsors make.
Source: 401kfridays.com, June 2018
Abstract: In several places in the 2009 IRS model 402(f) special tax notice as modified by Notice 2014-74, references are made to the 60-day rollover requirement and consequences that flow from failing to make a rollover within that time. Because TCJA creates an exception to these consequences, the model special tax notice no longer accurately describes the relevant law and needs to be updated to avoid any inaccuracies or correct any statements that have now become misleading due to the new legislation.
Source: Ktserisacorner.com, May 2018
Abstract: If it has been awhile since you have compared your payroll files to the definition of compensation in your plan document, it's recommended that you do an internal audit of payroll now. Don't assume that you know your plan's definition of compensation, but check the actual document. The earlier that any mistakes are detected the less the error will cost you.
Source: Graydon.law, May 2018
Abstract: Making corrective distributions is an administrative burden, can lead to fines and excise taxes if not done promptly, and, perhaps most notably, frustrates HCEs. If you find yourself needing to make corrective distributions, don't worry. This is a very common problem. This guide will walk you through everything you need to know about corrective distributions.
Source: Forusall.com, May 2018
Abstract: This is one of the very rare instances when there is a clear-cut answer, and it is a resounding "no." One of the unique features of company-sponsored retirement plans is that they are protected from legal judgments and bankruptcies. They also cannot be used as collateral and cannot be assigned to another individual. This article reviews a few exceptions.
Source: Dwc401k.com, May 2018
Abstract: Whether you're staring down the barrel of a DOL audit or just being proactive, knowing the details on your 401k plan documents (and keeping them organized) can save you a lot of pain. Here is a breakdown of your key 401k plan documents, including some industry-insider tips.
Source: Forusall.com, May 2018
Abstract: Some search steps involve so little cost and such high potential for success that a fiduciary should always take them before abandoning efforts to find a missing participant, regardless of the size of the participant's account balance. The failure to take such steps would violate the fiduciary obligations of prudence and loyalty, as set forth in section 404(a) of ERISA.
Source: Qbillc.com, May 2018
Abstract: Compiled from lists published by the IRS and plan auditors, here are 10 items to check and review to make sure your 401k plan is operating in line with IRS expectations.
Source: Qbillc.com, May 2018
Abstract: It seems like 401k plans require a lot of different notices and disclosures be provided to participants each year. We have safe harbor and default investment notices at the end of the year, fee disclosure notices and participant statements each quarter, and the summary annual report when we file our Form 5500. Are we allowed to distribute all of these 401k notices to our participants electronically?
Source: Dwc401k.com, May 2018
Abstract: Under the new Tax Act, the 60-day period was extended to the filing due date for the participant's tax return for the year in which the loan offset amount arises. This means the deadline for any offset that arises during the tax year will not be until April 15 of the following year, which can be extended to October 15 with a tax return extension. Participants now have a much larger window of time to come up with the funds to deposit the offset into an IRA or another qualified plan to avoid taxation.
Source: Belfint.com, May 2018
Abstract: No plan sponsor or TPA likes dealing with uncashed retirement checks. However, when a former employee fails to cash their distribution, the employer still has fiduciary responsibility for the funds. Here are four ways to decrease the burden involving ex-employees and uncashed checks.
Source: Penchecks.com, April 2018
Abstract: This article describes the key points from FAB 2018-01 and then provide a summary of the ever changing regulatory framework ERISA fiduciaries have been instructed to use when considering proxy voting and investing in ETIs.
Source: Groom.com, April 2018
Abstract: The Trump administration unveiled guidance aimed at the burgeoning socially responsible investment industry that left some investors scratching their heads. The Department of Labor, which oversees retirement-plan funds, published guidelines that said investments based on environmental, social and governance issues aren't always a "prudent choice" and that such factors shouldn't "too readily" be considered as economically relevant by fiduciaries.
Source: Investmentnews.com (registration may be required), April 2018
Abstract: Every couple of years, our 401k plan fails the ADP/ACP test by a small margin. Since we don't always fail the test, gathering our year-end census information to send to our TPA sometimes isn't as high a priority as some of the other projects necessary to close out the year. Is there a timing deadline to run the tests each year and to make any corrections if there is a failure?
Source: Dwc401k.com, April 2018
Abstract: DOL Field Assistance Bulletin 2018-01 provides guidance in addressing questions raised by Interpretive Bulletin 2016-11 and 2015-12 regarding the exercise of shareholder rights and written statements of investment policy and relating to economically targeted investments.
Source: Dol.gov, April 2018
Abstract: None of the IRM requirements for substantiating hardship distributions have been set forth in formal regulations that have been subject to notice and comment. But, the IRS believes substantiation that a distribution is for one of the safe-harbor hardships is required to determine that a hardship distribution is deemed to be on account of an immediate and heavy financial need. As a result, plan sponsors seeking to avoid disputes with IRS auditors may wish to follow the hardship substantiation requirements outlined.
Source: Ktserisacorner.com, April 2018
Abstract: In Notice 2018-24, the Treasury Department and IRS request comments on the potential expansion of the determination letter program for individually designed plans during 2019. As part of their commitment to annually review the scope of the program, they are looking for comments on the types of plans that should be allowed to seek a determination letter as well as specific issues for those plans that would justify the need for review.
Source: Groom.com, April 2018
Abstract: Former employees will often have account balances or benefits due them under an employer's retirement plan and are still considered to be participants. Regulatory guidance makes it clear that distributing the retirement accounts and accrued benefits of former employees is the employer's responsibility. Employers who maintain retirement plans are required to have procedures in place for finding missing participants.
Source: Stevenslee.com, April 2018
Abstract: Issues related to missing and nonresponsive retirement plan participants are causing more problems and creating more uncertainty for plan sponsors and administrators. RMDs and missing participants aren't going away any time soon. This article provides an overview and search steps.
Source: Penchecks.com, April 2018
Abstract: When employees aren't participating in the 401k or saving enough, non-discrimination testing can severely limit how much highly compensated employees can contribute. Limits imposed by non-discrimination testing are tough to overcome, but far from impossible. This article walks you through three highly effective strategies for overcoming these limits and acing your non-discrimination tests.
Source: Forusall.com, April 2018
Abstract: Qualified retirement plans are subject to many reporting and disclosure requirements under ERISA and related regulations. Although there may be additional requirements that apply to special circumstances, the Reporting And Disclosure Requirements checklist provides an overview of the requirements that typically apply.
Source: Watkinsross.com, April 2018
Abstract: When participants terminate employment, either through turnover or retirement, many often leave their DC accounts with their former employers. However, if the employer has lost track of the participant's location, it now has a missing participant. It may not be the fault of the sponsor, but it remains the responsibility of the sponsor to find the participant.
Source: Napa-net.org, March 2018
Abstract: Distinguishing common-law employees from independent contractors can be challenging. Mistakes in this area can trigger dire consequences for qualified retirement plans, like plan disqualification and participant lawsuits under ERISA. Plans should periodically review worker classifications for compliance purposes, paying particular attention to eligibility terms and definitions, as well as proper inclusions and exclusions of classifications for testing purposes. Article reviews some proactive strategies.
Source: Conduent.com, March 2018
Abstract: Are we allowed to pay 401k plan-related expenses out of the plan assets? This is another one of those questions with a short answer and a longer answer. The short answer is yes, it is perfectly allowable for some 401k plan expenses to be paid out of plan assets, but the flip side of that is that there are some expenses that are not allowed to be paid from the plan.
Source: Dwc401k.com, March 2018
Abstract: This article answers the question: "Is it possible to disregard signing bonuses from plan compensation or do we have to treat those the same as all other bonuses? If they must all be treated the same, could we carve out all bonus payments?"
Source: Dwc401k.com, March 2018
Abstract: The IRS on March 9 said in Announcement 2018-05 that it plans to issue opinion and advisory letters for master and prototype and volume submitter defined benefit plans that were restated for changes in plan qualification requirements listed in Notice 2012-76 and that were filed with the IRS during the submission period for the second remedial amendment cycle.
Source: Asppa.org, March 2018
Abstract: Misconceptions of the ERISA rules can lead plan administrators to believe that they either have provided an ERISA-compliant SPD when they have not, or that an SPD is not required at all. Administrators of all employee benefit plans subject to ERISA should ensure their plans' compliance with ERISA's Summary Plan Description (SPD) requirement.
Source: Hklaw.com, March 2018
Abstract: The recently enacted Bipartisan Budget Act of 2018 included some unanticipated provisions that directly affect retirement plans. One such provision relates to the availability and amount of hardship withdrawals made under 401k plans. This article summarizes the impact of these new rules.
Source: Legacyrsllc.com, March 2018
Abstract: Unfortunately for employers, the DOL has been aggressively challenging the adequacy of employer efforts to locate and contact missing participants. Numerous plan sponsors have received letters from the DOL during missing participant audits that threaten sanctions against plan fiduciaries for alleged violations of ERISA, despite a lack of definitive guidance on exactly how employers should follow up on a variety of challenges.
Source: Winston.com, February 2018
Abstract: This 43-page Compliance Checklist incorporates defined benefit, defined contribution, and ERISA 403b requirements and provides information on the materials that will need to be file, filing due dates, and agencies to which the filings should be made.
Source: Prudential.com, February 2018
Abstract: Fee lawsuits have exponentially increased over the past two years. Retirement plan sponsors of all sizes must be vigilant this year to protect themselves from plan litigation relate to high fees, lack of investment options or poor investment options and breach of fiduciary duty.
Source: Benefitnews.com, February 2018
Abstract: The Bipartisan Budget Act of 2018 was passed into law on Feb. 9, 2018 and introduces some unexpected changes for retirement plans. The most significant of the Act's changes for retirement plans reduces the existing restrictions on hardship distributions from 401k and 403b plans.
Source: Icemiller.com, February 2018
Abstract: This year, when the plan's TPA calculated the total match and profit sharing contributions for the year, it was discovered that employer funded more than was needed. What are the options for applying the amount overfunded? Can it be carried over and apply it to next year's contribution?
Source: Dwc401k.com, February 2018
Abstract: This calendar provides key administrative dates and deadlines for defined contribution plans subject to ERISA and the Internal Revenue Code.
Source: Milliman.com, February 2018
Abstract: The Bipartisan Budget Act of 2018 contains changes to the ways in which hardship withdrawals from qualified retirement plans are administered. The changes reviewed here are effective for plan years beginning after December 31, 2018.
Source: Consultrms.com, February 2018
Abstract: Many 401k tasks either require documents that should be retained or require documentation for future reference. This table lists several important documents that are smart to keep handy, either in the event of an audit, or to reference during the ongoing administration of the 401k.
Source: Forusall.com, February 2018
Abstract: To ensure a 401k plan is not favoring owners or highly paid employees, the IRS requires certain nondiscrimination testing is performed. The ADP measures the employee deferral contributions and the ACP measures the employer matching contributions. ADP/ACP testing must be completed annually. Here is a quick review.
Source: Watkinsross.com, February 2018
Abstract: The tax code governing 401k plans was written to prevent qualified retirement plans from overly favoring Highly Compensated Employees. The ADP test uses mathematical equations to compare the participation and contribution rates of the HCEs to the NHCEs to determine whether the plan is discriminating in favor of the HCEs. This article reviews the test and how it works.
Source: Legacyrsllc.com, February 2018
Abstract: The IRS mandates the use of Code 2 on Form 1099-R to report hurricane Harvey, Irma, or Maria distributions made in 2017, known as "qualified hurricane distributions" under the relief provided to victims by both the IRS and Congress.
Source: Ascensus.com, February 2018
DOL Extremely Active in Enforcement, With Terminated Vested Participant Investigations a High Priority
Abstract: The DOL compiles statistics every year to measure its activities as the agency responsible for investigating and enforcing the fiduciary duties under ERISA. Statistics for the agency's 2017 Fiscal Year enforcement activities are now available. These statistics affirm that the DOL's enforcement program remains extremely active, with a particular focus on terminated vested participant investigations.
Source: Morganlewis.com, January 2018
Abstract: The DOL has reportedly commenced a national audit campaign targeting plans with missing participants, and just last month, the Pension Benefit Guaranty Corporation issued final regulations expanding its existing missing participant program (previously limited to certain defined benefit plans) to a defined contribution plan.
Source: Foxrothschild.com, January 2018
Abstract: This Retirement Plan Compliance Calendar highlights the critical compliance deadlines for ERISA 401k defined contribution retirement plans.
Source: Cammackretirement.com, January 2018
Abstract: The IRS has described its recent changes to its Voluntary Correction Program user fees as "simplification." This simplification is achieved by significantly changing the way user fees are determined and by eliminating alternative and reduced fees that were previously available. At first blush, this simplification appears to result in a general reduction in user fees, however, in certain circumstances, the changes will actually result in significantly higher fees.
Source: Benefitsbryancave.com, January 2018
Abstract: The Act makes changes to the rules governing qualified plans (such as 401k plans and pension plans) and fringe benefit plans. These changes generally apply to plan years beginning after December 31, 2017. This is a review of those changes.
Source: Drinkerbiddle.com, January 2018
Abstract: This is a month-by-month chart of compliance items that a DC plan sponsor should address throughout the year in order to retain the qualified status.
Source: Watkinsross.com, January 2018
Abstract: The new fee structure is based on a plan's total asset value and represents a significant departure from the historical methods the IRS used to assess VCP user fees. While the new structure will significantly lower the user fee for some applicants, it raises the fees for others (particularly small plans).
Source: Relius.net, January 2018
Abstract: At a time when employers need more encouragement to help employees save for retirement, the trend at the IRS does the exact opposite. The increased risk that the employer takes on due to a lack of communication with the IRS, coupled with the increased expense of correcting any failure, is a move in the wrong direction.
Source: Ferenczylaw.com, January 2018
Abstract: The IRS has simplified the user fees charged for most submissions made under the Voluntary Correction Program. The total amount of net plan assets determines the applicable user fee. Most alternative or reduced fees that were part of previous revenue procedures no longer apply.
Source: Irs.gov, January 2018
Abstract: The Puerto Rico Treasury Department is providing special relief for distributions and loans from Puerto Rico qualified and dual-qualified retirement plans following Hurricane Maria. Under Administrative Determination No. 17-29, Puerto Rico residents affected by the hurricane may take distributions from their qualified retirement plans at lower tax rates. Additional relief is available for outstanding plan loans.
Source: Towerswatson.com, January 2018
Abstract: The Puerto Rico Treasury Department issued Circular Letter of Tax Policy 17-02 formally announcing the key pension limits for 2018, as required by the Puerto Rico Internal Revenue Code. Different limits and rules for retirement plans qualified in Puerto Rico may cause some operational issues for plan sponsors.
Source: Planadviser.com, January 2018
Abstract: Alongside numerous proposed changes, employees who work for three consecutive years with at least 500 hours of service each year would have to be made eligible to participate in an employer's plan, but would be excluded from top-heavy and nondiscrimination testing.
Source: Planadviser.com, January 2018
Abstract: This year's update includes a significant fee change surprise for the VCP program; and while changes in past years typically went into effect about a month after they were announced, this year's changes are effective immediately.
Source: Erisapracticecenter.com, January 2018
Abstract: The DOL has published its final rule to adjust for inflation the civil monetary penalties assessed or enforced in its regulations.
Source: Benefitsforward.com, January 2018
Abstract: This is a 5-page retirement plan chart and 2018 calendar for defined contribution plans, published Milliman. The document provides key administrative dates and deadlines for calendar-year plans.
Source: Milliman.com, December 2017
Abstract: Diane Wasser, partner-in-charge of EisnerAmper's Pension Services Group, recently sat down with Callan Carter, special counsel at Trucker Huss, APC, a firm of ERISA and employee benefits attorneys, to discuss common retirement plan errors and how to avoid them.
Source: Eisneramper.com, December 2017
Abstract: Every year, plan sponsors must make sure their plans meet certain compliance requirements. This publication identifies the materials you need to review and will help you prepare for year-end. It only applies to qualified defined contribution plans and 403b plans that are subject to ERISA.
Source: Prudential.com, December 2017
Abstract: How long should fiduciary records be kept? The Court has said that although the statute of limitations for bringing an action against a plan fiduciary for an imprudent investment begins on the date of the investment, the limitation period begins anew if at any time during that period the fiduciary should have reviewed its portfolio and replaced the investment.
Source: Fiduciaryplangovernance.com, December 2017
Abstract: The IRS has issued its 2017 Required Amendments List for qualified retirement plans. The 2017 RA List does not identify any qualification changes affecting 401k plans, but plan sponsors must still determine whether amendments are necessary for their particular plans.
Source: Thomsonreuters.com, December 2017
Abstract: This is a cautionary tale of how a poorly administered participant loan program can result in adverse tax consequences to participants. While this participant's reasonable reliance on the employer and recordkeeper allowed her to avoid the accuracy-related penalty, it did not protect her from the deemed distribution.
Source: Thomsonreuters.com, December 2017
Abstract: You don't have to have employees in the disaster areas to be able to provide relief for victims of the 2017 hurricanes through your 401k plan. IRS announcements and a new law enable participants to take withdrawals to help relatives who were seriously impacted by hurricanes Harvey, Maria and Irma if their plan permits hurricane distributions. Special rules also allow plans to permit loans for relief even if the plan terms don't currently provide for loans. However, the agencies in charge aren't making it easy for plan sponsors who want to help.
Source: Cohenbuckmann.com, November 2017
Abstract: This is a qualified plan "to do" list of items on which you may want to act on before the end of 2017 or in early 2018. The list is broken into five categories.
Source: Swlaw.com, November 2017
Abstract: The U.S. Department of Labor announced employee benefit plan compliance guidance and relief for victims of Hurricane Maria and the October 2017 California Wildfires.
Source: Dol.gov, November 2017
Abstract: The IRS and the Department of Labor have announced what they describe as "advance informational copies" of 2017 plan year annual return Forms 5500 and 5500-SF. Also included are information copies of the accompanying schedules commonly filed with these forms.
Source: Ascensus.com, November 2017
Abstract: This paper will help you set up a yearly schedule of activities, so you do not miss important deadlines for your qualified plans. As you evaluate the various tasks, you can confirm suitable deadlines with your vendors for their completion. Identifies and addresses other activities that are event-based and participant-specific.
Source: Conduent.com, November 2017
Abstract: The rules governing required minimum distributions are complex, and exceptions to the rules abound. Plan sponsors should check their plan document to be sure RMDs are in operational compliance. Additionally, plan sponsors should educate account holders about the rules related to RMDs so that account holders are aware of tax implications and potential penalties related to RMDs. This article provides an in-depth look at RMDs.
Source: Findleydavies.com, November 2017
Abstract: The IRS releases its updated list of required modifications for defined contribution plans. The information package contains samples of plan provisions that have been found to satisfy certain specific requirements of the Internal Revenue Code, taking into account changes in the plan qualification requirements, regulations, revenue rulings, and other guidance.
Source: Benefitsforward.com, November 2017
Abstract: Most TPAs don't wake up first thing in the morning thinking about qualified plan beneficiary rules. However, improper payments due to lack of knowledge about these rules can have unwanted consequences. As the first in a series, this article covers the basic rules of the spouse beneficiary requirement for qualified plans.
Source: Penchecks.com, November 2017
Abstract: Sponsors of retirement plans are well aware of the annoyances associated with missing participants. However, there may also be associated legal perils. An October 2, 2017 letter from the American Benefits Counsel to Tim Hauser at the Department of Labor, outlines the aggressive legal positions recently taken by DOL investigators with respect to missing participants.
Source: Wifilawgroup.com, November 2017
Abstract: This advisory reminds plan sponsors of deadlines for amending qualified retirement plans and certain year-end legal updates.
Source: Alston.com, November 2017
Abstract: One of the most confusing parts of working with retirement plans occurs when the plan sponsor buys another company. This article reviews one aspect of the rules relating to transactions, which is commonly the key to a successful handling of benefits matters in M&A, and is also commonly misunderstood: The IRC Section 410(b)(6) Transition Rule.
Source: Ferenczylaw.com, November 2017
Abstract: By year-end 2017, sponsors of calendar-year single-employer retirement plans must adopt necessary and discretionary plan amendments to ensure compliance with the statutory and regulatory requirements of ERISA and the tax code. This bulletin looks at key areas -- including administrative compliance issues -- that sponsors of such DB or DC plans should address by December 31, 2017.
Source: Milliman.com, November 2017
Abstract: This article focuses on one aspect of the employment termination process as it relates to defined contribution retirement plans. More specifically, it examines the involuntary cash-out provisions included within most DC plans.
Source: Legacyrsllc.com, November 2017
Abstract: Chapter 13 debtors can deduct 401k contributions in calculating their disposable income that must be contributed to a payment plan, even if they weren't contributing in the six months prior to the bankruptcy, an Illinois bankruptcy judge ruled Oct. 30.
Source: Bna.com (registration may be required), November 2017
Abstract: The IRS has released Announcement 2017-15 detailing more relief available for those affected by Hurricane Maria and the California wildfires. This relief is in addition to previous disaster-related announcements.
Source: Ascensus.com, November 2017
Abstract: The IRS publicly released guidance, previously provided to its Employee Plan auditors, establishing the criteria that the auditors should use to determine if a plan under audit has a qualification issue when required minimum distributions (RMDs) under Section 401(a)(9) of the Internal Revenue Code have not been timely paid to missing participants.
Source: Sibson.com, October 2017
Abstract: This IRS memorandum directs EP examiners not to challenge a qualified plan as failing to satisfy the required minimum distribution standards under Internal Revenue Code Section 401(a)(9) in the circumstances set forth in the memorandum.
Source: Irs.gov, October 2017
Abstract: This 6-page chart is a guide for employers to use in determining which types of expenses can be paid from the assets of an employee benefit plan governed by ERISA and the Internal Revenue Code.
Source: Groom.com, October 2017
Abstract: Work on the Labor Department's effort to expand, streamline and modernize the Form 5500 Series has been halted until a new head of the DOL's Employee Benefits Security Administration (EBSA) is in place.
Source: Asppa.org, October 2017
Abstract: On October 19, 2017, the Internal Revenue Service announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for the tax year of 2018. Chart, highlights, and detail.
Source: 401khelpcenter.com, October 2017
Abstract: Employee benefit and retirement plans are required to comply with a number of complex laws and regulations, and failure to do so can result in significant penalties and/or disqualification of a plan. Despite best intentions different plan errors can occur. The good news is that there are correction program options available for plan sponsors without sacrificing the qualified status of a plan.
Source: Withum.com, October 2017
Abstract: In the Internal Revenue Service Tax Exempt and Government Entities FY 2018 Work Plan, the agency revealed efforts it will be making next year to help sponsors achieve compliance for their employee retirement plans. Plan sponsors will have a number of new compliance checks to keep in mind.
Source: Plansponsor.com, October 2017
Abstract: Do you wish that you could find a way to avoid plan compliance problems and shorten the length of IRS or Department of Labor plan audits? One compliance tool you can use is an Internal Controls Policy.
Source: 401ktv.com, October 2017
Abstract: This article explores the efforts by the Internal Revenue Service, Department of Labor, and Pension Benefit Guaranty Corporation to grant multiple forms of relief to taxpayers impacted by Hurricane Harvey, Hurricane Irma, and other disasters enumerated by the Federal Emergency Management Agency. This new disaster relief affects health plans, retirement plans, and employers.
Source: Mwe.com, October 2017
Abstract: The Act includes relief from the 10% premature distribution penalty for withdrawals from retirement savings and provides expanded loan availability to qualified plan participants. It also offers withholding exceptions, delayed taxation, and extended repayment options to ease the financial bite of tapping retirement savings for hurricane recovery.
Source: Conduent.com, October 2017
Abstract: Under the provisions of the new law, "qualified hurricane distributions" from IRAs, qualified retirement plans, 403b plans, and governmental 457b plans are entitled to special tax treatment, as well as repayment options if the recipient so chooses. There are also provisions that apply specifically to loans from employer plans.
Source: Ascensus.com, October 2017
Abstract: It is important to be reminded about one frequently overlooked retirement plan requirement. Upon attainment of age 70-1/2, certain participants of a tax-qualified retirement plan may be required by federal tax law to withdraw a minimum amount from such plan each year. These mandatory distributions are known as "required minimum distributions."
Source: Legacyrsllc.com, October 2017
Abstract: Qualified retirement plans must satisfy Section 401(a) of the Internal Revenue Code (and related Code Sections) in both form and operation. In some situations, plans are required to begin operational compliance with changes in the law even before the plan document is required to be updated. This short article answers the question, what is the Operational Compliance List?
Source: Boutwellfay.com, October 2017
Abstract: DC plans often provide employer contributions to participants, whether matching or nonelective, that are subject to a vesting schedule. When a participant terminates employment prior to becoming fully vested in those contributions, the unvested portion is forfeited on a date specified by the plan. While this process is generally straightforward, a plan may encounter challenges in determining how and when to use those forfeited assets appropriately.
Source: Fidelity.com, October 2017
Abstract: These charts reflect the hurricane relief that is in effect as of September 29, 2017.
Source: Ferenczylaw.com, October 2017
Abstract: In response to the DOL's findings regarding ERISA plan audit deficiency rate, the AICPA has embarked on an initiative to improve audit quality through auditor badge certification programs, enhanced peer review checklists, and changes to auditing standards by strengthening the audit report.
Source: Belfint.com, September 2017
Abstract: Securities and Exchange Commission (SEC) Chairman Jay Clayton hopes that his agency can "properly tailor" an approach that will best address issues related to those the DOL's fiduciary rule concerns. Clayton made his remark during his Sept. 26 testimony before the Senate Committee on Banking, Housing and Urban Affairs.
Source: Asppa.org, September 2017
Abstract: The arrival of Hurricane Irma in September significantly affected individuals and businesses in Florida, Puerto Rico, and the U.S. Virgin Islands. Recognizing this impact, the IRS, DOL, and the PBGC have granted extensions of certain deadlines for both plan sponsors and participants directly affected by this disaster. The IRS has also provided special rules for plan sponsors that want to offer hardship distributions or plan loans to employees or former employees that have been affected by Hurricane Irma.
Source: Prudential.com, September 2017
Abstract: The IRS recently issued Rev. Proc. 2017-41, which streamlines and enhances the pre-approved plan program in light of the drastic changes that were made to the determination letter program for individually designed plans. Many of these changes were in response to the benefits community comments on ways to help improve the program and facilitate transition of plan sponsors to these pre-approved programs.
Source: Groom.com, September 2017
Abstract: The modifications are designed to further the IRS's stated intention to encourage sponsors of individually designed plans to transition to a preapproved plan format. However, the changes are relatively modest and most large plan sponsors will likely find other ways to mitigate their higher compliance risk.
Source: Towerswatson.com, September 2017
Abstract: The Internal Revenue Service announced that 401ks and similar employer-sponsored retirement plans can make loans and hardship distributions to victims of Hurricane Irma and members of their families. This is similar to relief provided last month to victims of Hurricane Harvey.
Source: Irs.gov, September 2017
Abstract: The arrival of Hurricane Harvey in August significantly affected individuals and businesses in Texas. Recognizing this impact, the IRS, DOL, and the PBGC have granted extensions of certain deadlines for both plan sponsors and participants directly affected by this disaster. The IRS has also provided special rules for plan sponsors that want to offer hardship distributions or plan loans to employees or former employees that have been affected by Hurricane Harvey.
Source: Prudential.com, September 2017
Abstract: AICPA Auditing Standards Board has proposed changes to the reporting standards for annual audits of employee benefit plans that are covered by ERISA. The proposal, which was issued in April 2017, was in response to a request from the U.S. Department of Labor to re-examine the current audit reporting model for employee benefit plans.
Source: Franczek.com, September 2017
Abstract: The IRS has issued two relief declarations affecting retirement plans. The first, TX-2017-09, provides 7508A relief postponing numerous deadlines to January 31, 2018. The second, Announcement 2017-11, simplifies and streamlines loans and hardship distributions in the wake of Harvey. This document summarizes the IRS relief and the related DOL announcement.
Source: Erisapedia.com, September 2017
Abstract: The guidance provided in this statement applies generally to employee benefit plans, plan sponsors, employers and employees, and service providers to such employers who are located in a county identified for individual assistance by the Federal Emergency Management Agency (FEMA) due to the effects of Hurricane Harvey.
Source: Dol.gov, September 2017
Abstract: This document announces a temporary enforcement policy related to the DOL's final rule defining who is a fiduciary under ERISA and the Internal Revenue Code, and the related prohibited transaction exemptions, including the Best Interest Contract Exemption, the Class Exemption for Principal Transactions In Certain Assets Between Investment Advice Fiduciaries and Employee Benefit Plans and IRAs, and certain amended prohibited transaction exemptions.
Source: Dol.gov, September 2017
Abstract: This document announces an enforcement policy related to the limitation of arbitration in the Best Interest Contract Exemption (BIC Exemption) and the Class Exemption for Principal Transactions In Certain Assets Between Investment Advice Fiduciaries and Employee Benefit Plans and IRAs, issued by the dol under ERISA and the Internal Revenue Code.
Source: Dol.gov, September 2017
IRS Revised Its Qualified Plans Correction Program to Address the Determination Letter Program Changes
Abstract: The intent behind most of the changes to the EPCRS program that are highlight in this 4-page article is to conform the correction program with the changes being made to the determination letter program, and to help plan sponsors manage the risks that the loss of the determination letter cycle program has on audit.
Source: Groom.com, August 2017
Abstract: As the use of robo-advisers to provide investment advice and discretionary management services has become more popular and as related technologies have developed, regulators are beginning to take note. Robo-advisers should consider their legal responsibilities under ERISA and the IRS Code in addition to those under the Advisers Act and other applicable law. This 20-page paper provides an in-depth review.
Source: Groom.com, August 2017
Abstract: The Auditing Standards Board created a special task force in 2015 to consider a proposal to improve the quality of employee benefit plan audits by strengthening the EBP auditors' report. The Chief Accountant of the Department of Labor requested the ASB enhance the ERISA plan audit report to provide better insight regarding the scope of the responsibilities of management and the auditor.
Source: Belfint.com, August 2017
Abstract: The DOL has announced that it is withdrawing a rule requiring that employers provide a guide or similar material along with fee disclosures. The Obama administration had issued a notice of proposed rulemaking about the requirement on March 12, 2014.
Source: Asppa.org, August 2017
Abstract: This is a high level overview of some of the rules that beneficiaries must follow to help preserve the tax-deferred status of inherited retirement account, and avoid penalties.
Source: Retirementdictionary.com, August 2017
Abstract: Required minimum distributions are a small but important part of retirement plans. Failure to start making them on time can lead to problems for employers and plan participants. If you're a plan administrator, you hold the responsibility of ensuring the first RMD is made in time to fulfill this requirement.
Source: Penchecks.com, August 2017
Abstract: Sponsors of DC plans with certain features are required to provide annual notices to participants. This chart summarizes the annual notice requirements for each of these notices, including timing, recipients, contents, and methods of delivery. Some plan designs may require multiple notices and some of the notices may be combined or packaged together in one mailing.
Source: Prudential.com, August 2017
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