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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.

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Limited Plan Audits Are History: What 401k Plan Sponsors Should Know

Two types of 401k plan audits exist, limited and full-scope audits. In a limited scope audit, an independent auditor does not have to audit any plan asset information if a bank, an insurance company, or a regulated trust company holds the 401k plan's assets. Limited scope audits are changing and plan sponsors should understand how these changes impact their 401k plans.

Source: Sequoia.com, September 2022

Plan Sponsors Can Self-Audit Before an IRS Examination

Voluntary compliance tools are an important part of the IRS's retirement plan enforcement strategy. If a plan is out of compliance, the primary IRS goal is for the plan sponsor to make the necessary changes to bring the plan into compliance, although it also has the authority to assess penalties, taxes, interest, and even disqualify a plan. Recently, the IRS announced a new enforcement initiative that involves plan sponsors auditing their plans.

Source: Newportgroup.com, September 2022

The Headache of 401k Plan Notices

Being a 401k plan sponsor isn't easy and one of the biggest headaches is dealing with notices and required documents. One area that most plan sponsors fail to fulfill their duties is the dissemination of required notices and documents, especially to former employees who still have a participant account balance in their plan.

Source: Jdsupra.com, September 2022

Year-End Amendments Extended: CARES and 2020 Relief Act

Following up on the SECURE Act and other recent plan amendment extensions in Notice 2022-33, the IRS has issued Notice 2022-45 (Sept. 27, 2022) to extend the amendment deadlines for the remaining provisions of the CARES Act, as well as for relief provided under the Taxpayer Certainty and Disaster Tax Relief Act of 2020, generally until December 31, 2025.

Source: Groom.com, September 2022

Clarification on Extension of Amendment Deadlines for CARES Act Provisions

The IRS released IRS Notice 2022-45, which corrected a potential oversight in IRS Notice 2022-33. Notice 2022-33 had extended the deadline to adopt certain retirement and savings plan amendments required by the SECURE Act and the CARES Act from December 31, 2022, to December 31, 2025, but the extension did not apply to certain CARES Act provisions, including penalty-free coronavirus-related distributions, increasing the permissible loan amount, and delaying repayment of loan amounts.

Source: Erisapracticecenter.com, September 2022

Retirement Plan Documentation Mitigates Operational Risk

Retirement plans face risk every day from many sources. One of the most overlooked is operational risk, often due to inconsistent employee performance and turnover. Employee turnover among a plan sponsor's benefits staff can lead to a loss of valuable knowledge and experience, as well as operational failures and possible litigation. Unfortunately, plan sponsors often learn this the hard way. The Great Resignation was a wake-up call to many employers. They realized that the knowledge employees took with them will take years to replace.

Source: Segalco.com, September 2022

IRS Extends Plan Amendment Deadlines Under CARES, Disaster Relief Acts

The IRS on Sept. 26 in Notice 2022-45 announced that it is extending the deadline for amending eligible retirement plans concerning coronavirus-related distributions and the use of retirement funds for disaster-related assistance.The IRS on Sept. 26 in Notice 2022-45 announced that it is extending the deadline for amending eligible retirement plans concerning coronavirus-related distributions and the use of retirement funds for disaster-related assistance.

Source: Napa-net.org, September 2022

Amending Your Retirement Plans This Year for SECURE Act and CARES Act Changes

While many commentators and employee benefits publications have cheered the three-year extension, the article authors are of the view that plan sponsors will be best served by amending their plans this year to incorporate provisions of the SECURE Act, the Miners Act, and the CARES Act that they have been applying in operation.

Source: Verrill-law.com, September 2022

What Qualifies as an "Immediate and Heavy Financial Need" Under Hardship Withdrawal Rules?

Do specialists have a list of the types of expenses for which distributions are deemed to be made on account of an immediate and heavy financial need from a 401k/ 403b plan under the hardship withdrawal rules? Experts from Groom Law Group and CAPTRUST answer the question.

Source: Plansponsor.com, September 2022

IRS Makes Changes to Determination Letter Application Program

IRS Revenue Procedure 2022-4 made some notable changes to the determination letter application filing process. This article provides background on changes made under the Revenue Procedure to the determination letter filing process, including utilizing pay.gov, some "nuts and bolts" advice regarding navigating the website, filing an IRS Form 2848 electronically, and related considerations.

Source: Groom.com, September 2022

Top 401k Priorities on the DOL's Regulatory Agenda

On June 21, 2022, the DOL published its Spring 2022 Regulatory Agenda which lists all the regulations the DOL expects to have under active consideration, including 401k reform items. You should check them out to understand the DOL's 401k-related priorities for the next 12 months. Here are the three 401k-related priorities that the author is most excited about.

Source: Employeefiduciary.com, September 2022

DOL Releases New Bulletin on Independence for Plan Accountants

How independent do accountants have to be when auditing plan documents? The DOL just got more specific. Interpretive Bulletin 2022-01 revises and restates the 1975 Interpretive Bulletin to remove certain outdated and unnecessarily restrictive provisions and reorganize other provisions for clarity.

Source: 401kspecialistmag.com, September 2022

Guidance on Employee Benefit Plan Auditor Independence Clears Review

While there are no details yet, the federal government's regulatory dashboard suggests that the DOL may soon release guidance addressing the independence of employee benefit plan accountants. The Office of Information and Regulatory Affairs has concluded a review of an interpretive bulletin concerning the independence of employee benefit plan accountants and presumably their audit functions.

Source: Napa-net.org, August 2022

Comparing Seven Defined Contribution Plan Designs - 2022

In designing a retirement plan, you look at the employer's objectives, the need for flexibility, the ages of the key personnel, the salaries of everyone involved, total budgeted dollars, the advantages of adding 401k features, etc. This chart shows the results of an analysis prepared for one company that wanted a defined contribution plan. There were 10 people eligible for the retirement plan, including one owner.

Source: Consultrms.com, August 2022

Maintaining Records: Who Does What, and When?

Retaining and maintaining records is not a minor matter, ERISA and DOL regulations make that clear. And yet, says a plan administrator, policies concerning record retention and maintenance are not as common as one may expect.

Source: Asppa.org, August 2022

Avoiding Improper Retirement Plan Distributions

One of the challenges of administering a retirement plan is the timely and proper payment of distributions to plan participants. This responsibility occurs in more than one context and can have several "facts and circumstances" variations.

Source: Penchecks.com, August 2022

IRS Extends Deadlines for Amending a Retirement Plan or IRA for Certain Provisions of SECURE Act, Miners Act, and CARES Act

On August 3, 2022, the IRS issued Notice 2022-33 to extend the deadlines to amend certain retirement plans (such as qualified 401(a) plans, 403b plans, governmental 457b plans, and individual retirement arrangements) for certain provisions of the Setting Every Community Up for Retirement Enhancement Act of 2019 and section 104 (relating to reduced age for in-service distributions for qualified 401(a) plans and governmental 457b plans) of the Bipartisan American Miners Act of 2019.

Source: Icemiller.com, August 2022

Compliance Check: Amending Your 401k Plan Document on Time

This article looks at the deadlines for a plan sponsor of an individually-designed 401k plan to adopt legally-required and discretionary 401k plan amendments, as well as recent IRS Notice 2022-33, which extended the deadline for certain legally-required 401k plan amendments related to the SECURE Act and the CARES Act.

Source: Foley.com, August 2022

A Beneficiary Form Is the Most Important Employee Benefit Form

The most important form in all employee benefits is an individual employee's 401k plan beneficiary form. In the absence of a valid beneficiary form, 401k plan documents will often control the distribution of plan proceeds upon an employee's death. In other words, the distribution of large sums of money could potentially be against the deceased employee's wishes. The best way to avoid this issue is to make sure that an individual employee's 401k beneficiary form exists, is current, and matches any estate planning documents.

Source: Masudafunai.com, August 2022

What Retirement Policies Should Your 401k Plan Have in Place

Having clear policies and procedures for 401k plans helps employees involved in the plan administration do their job more efficiently by mapping out steps to take when various situations arise. ERISA and the DOL guidance recommend retirement plans maintain some of these policies and, while not required by law, are helpful in the event of a DOL audit or participant litigation. This article reviews what policies you should consider having and what they entail.

Source: Consultrms.com, August 2022

IRS Notice 2022-33 Provides a Partial Extension of the 2022 Plan Amendment Deadline

The IRS has announced an extension of the deadlines for amending 401(a) qualified defined contribution and defined benefit plans, 403b plans, and governmental 457b plans. While the extension provides welcome relief in certain cases, some plan sponsors and Pre-Approved Plan Providers will still need to amend plans for certain CARES Act provisions and the Taxpayer Certainty and Disaster Tax Relief Act of 2020 by the original amendment deadline, the last day of the 2022 plan year.

Source: Asc-net.com, August 2022

IRS Extends Retirement Plan Amendment Deadlines

Many tax-qualified retirement plans, including non-governmental 403b plans and IRAs, were running short on time to make needed amendments to plan documents before the December 31, 2022, deadline to comply with recently enacted law changes. Under the new Notice 2022-33, plans and IRAs now have until December 31, 2025, to amend those documents.

Source: Bdo.com, August 2022

Employee Deferrals and Employer Contributions on Bonus Payments May Pose Challenges

An issue that can arise when considering the potential qualified status of a tax-qualified retirement plan is whether the definition of compensation under a plan is being properly implemented based on a participant's elective deferral election and corresponding employer contributions based on an employee's elective deferral election and the plan document. This article provides background on this issue and discusses the consequences of providing separate deferral elections on bonuses, the potential risks of permitting such separate elections, and related considerations that are important to maintain the tax-qualified status of a plan.

Source: Groom.com, August 2022

IRS Extends Certain Amendment Deadlines for the SECURE and CARES Acts

On August 3, 2002, the IRS issued Notice 2022-33 which extends certain deadlines for qualified plans to amend their documents for the SECURE Act, the Miners Act, and the CARES Act. Before this Notice, amendments for all provisions of the Acts were due by the last day of the plan year beginning on or after January 1, 2022 (December 31, 2022, for calendar year plans).

Source: Erisadc.com, August 2022

IRS Extends Retirement Plan Amendment Deadlines

Plan sponsors can certainly wait to adopt these amendments, and this would also allow further changes addressing subsequent guidance on the SECURE Act as well as future legislation to be addressed. However, for plan administration purposes, it could be helpful to amend plans before the end of the year and also provide participants with a summary of material modifications describing the changes, but this may require an additional amendment by the extended deadline.

Source: Bradley.com, August 2022

IRS Provides Three-Year Extension for SECURE Act Amendments and Additional Limited Relief

IRS Notice 2022-33 provides extensions to the amendment deadlines for certain provisions of the Setting Every Community Up for Retirement Enhancement Act of 2019, the Bipartisan American Miners Act of 2019, and the Coronavirus Aid, Relief, and Economic Security Act. This Notice comes as welcome relief, albeit limited in some instances.

Source: Groom.com, August 2022

IRS Guidance Extends Deadline for SECURE & CARES Act Amendments

On August 3, 2022, in a welcome and surprising move, the IRS released Notice 2022-33, providing for an extension for qualified retirement plans to adopt amendments under the Setting Every Community Up for Retirement Enhancement Act of 2019, the Bipartisan Miners Act of 2019 (which provided defined benefit plans with an optional reduction in the minimum age for in-service distributions from age 62 to 59 1/2), and the Coronavirus Aid, Relief, and Economic Security Act.

Source: Erisapracticecenter.com, August 2022

IRS Extends SECURE, CARES Act Amendments Deadline

In a bit of good news for plan sponsors, the IRS announced in Notice 2022-33 on August 3, 2022, that it is extending upcoming plan amendment deadlines under the Setting Every Community Up for Retirement Enhancement Act of 2019, the Coronavirus Aid, Relief, and Economic Security Act and the Bipartisan Miners Act of 2019 to December 31, 2025.

Source: Cohenbuckmann.com, August 2022

The IRS Throws a Curveball: How to Knock the New Compliance Pilot Program Out of the Park

Earlier this summer, the IRS surprised the retirement plan world when it announced a new approach for narrowing the universe of plans seemingly worthy of its investigatory and audit resources. If your organization receives a letter under this new program, what will you do? Will you be prepared to respond? What if the answer is no?

Source: Qualifiedplanadvisors.com, August 2022

Record Increases Projected for 2023 Retirement Plan Limits

The announcement of the official limits is still a few months away, but early projections from Mercer suggest that nearly all qualified retirement plan limits will increase by unprecedented amounts next year.

Source: Asppa.org, August 2022

Great 401k Participant Features That Can Cause You Headaches

Within a 401k Plan, some options are truly beneficial to plan participants when it comes to increasing retirement savings or allowing access for a participant's benefit. The problem with these options is that if you and your plan provider don't keep an eye on them, there may be a compliance headache coming your way.

Source: Jdsupra.com, July 2022

IRS Announces New Pre-Audit Compliance Program

The IRS has announced the implementation of a 90-Day Pre-Examination Compliance Pilot program in its Employee Plans newsletter dated June 5, 2022. As a result of this major development, plan sponsors that receive an initial letter from the IRS should take immediate steps to identify compliance issues, take voluntary corrective action, and prepare a summary of those issues and actions for the IRS. In addition, plans should prioritize any compliance errors to ensure that they can successfully resolve them within the 90-day timeframe and take advantage of the benefits of the Pilot Program.

Source: Hallbenefitslaw.com, July 2022

Five Administrative Policies Every 401k Plan Needs

401k plans are required to maintain some of these policies either by ERISA or under DOL guidance, and others, while not necessarily required by law, are helpful in the event of a DOL audit or participant litigation. Having clear policies and procedures in place also helps employees involved in plan administration do their job more efficiently by mapping out appropriate steps to take when various situations arise. This article takes a look at five policies or procedures that are important for proper 401k plan administration.

Source: Foley.com, July 2022

Handling Undocumented Workers Who Participate in ERISA Plans

Undocumented workers are increasingly participating in and accruing benefits in ERISA plans, which presents challenges for employers. ERISA does not specifically exclude these employees from participation in ERISA-governed plans. Although the federal government has explicitly stated that other federal laws protect undocumented workers, it also has not stated that ERISA protects undocumented workers. Likewise, court decisions have been inconsistent in their treatment of undocumented workers under ERISA. The lack of clear guidance combined with inconsistent court decisions can lead to confusion and differing approaches from employers dealing with undocumented workers.

Source: Hallbenefitslaw.com, July 2022

IRS Updates Determination Letter Forms for Move to Mandatory Electronic Filing

As of June 2022, the IRS updated two of its forms and related instructions in connection with its determination letter program for qualified retirement plans, including 401k plans. The updates are required as of July 1, 2022, due to the move to the required all-electronic filing of Form 5300, which the IRS announced on May 25, 2022.

Source: Compliancedashboard.net, July 2022

Plan Sponsors' Fiduciary Duty for DC Plan Compliance Testing

As fiduciaries, defined contribution plan sponsors must act in the best interest of all participants and ensure that the plan itself does not cater to one person or group over another. To make sure this rule is being followed, ERISA requires that plans undergo annual compliance tests. To help prevent any potential issues, plan sponsors need to understand the testing requirements and communicate with service providers regarding any changes to the plan. This article presents ways a plan sponsor can potentially avoid testing issues and correct them when they arise.

Source: Bdo.com, July 2022

2023 IRS Limits - June Forecast

This is an update to the Milliman 2023 IRS limits forecast using the U.S. Bureau of Labor Statistics report published July 13, 2022. Seven of the 12 expected limits are higher than the forecast in our May report. With only three months remaining for the fiscal year 2022, the 2023 IRS limits forecast will most likely set the record for a one-year increase.

Source: Milliman.com, July 2022

Retirement Plan Sponsors Should Prepare for the New IRS Pre-Examination Pilot Program

In June 2022, the IRS launched a pre-examination pilot program for retirement plans that could help employers avoid costly penalties. The program aims to reduce the burden of, and time spent on, retirement plan audits, which are typically a time-consuming endeavor for plan sponsors. The program ultimately should be good news for plan sponsors in terms of both financial penalties and, presumably, a more efficient audit process.

Source: Spencerfane.com, July 2022

Plan Documents: The Lifeblood of Compliance

Plan documents are the lifeblood of compliance. They drive communication, they drive compliance. People get into a lot of trouble when they don't handle plan documents correctly, and that failure to comply on time is one of the biggest compliance issues for the IRS.

Source: Asppa.org, July 2022

Why Missing 401k Participants Are So Misunderstood

"Missing participants" is a label for a problem that's ill-defined and poorly understood, and where fundamental misunderstandings exist, inadequate solutions -- paired with the prospect of unwanted regulatory attention or audits -- can persist. Here's how you can better understand the problem and free yourself from the missing participant treadmill.

Source: 401kspecialistmag.com, July 2022

Navigating the IRS Pre-Audit Retirement Plan Pilot Program

Under the Pre-Examination Compliance Pilot, which went into effect last month, the IRS notifies retirement plan sponsors 90 days in advance that their plan has been selected for an audit. The plan sponsor then has 90 days to review its plan documents and operations and to correct any compliance issues that may be discovered. The pilot program has three main features which are outlined here.

Source: Icemiller.com, July 2022

It's Form 5500 Season: Five Common Mistakes That Plan Sponsors Should Avoid

We are just past the "official" start of summer, which means it is time for sponsors of retirement plans and many health and welfare plans to think about preparing and submitting Form 5500. This article examines the most common mistakes encountered when plan sponsors complete Form 5500.

Source: Dickinson-wright.com, July 2022

Retroactive Retirement Plan Adoption for New Qualified Plans Under the SECURE Act

This is a considerable change from the original IRS stance that employers had to adopt a plan before the end of their taxable year. This eliminates the time pressure for employers to decide if they can afford a new retirement plan. Now any plan that is adopted before the due date of an employer's tax return (including extensions) is considered to have been established on the last day of the tax year.

Source: Tri-ad.com, July 2022

IRS Launches Pre-Examination Retirement Plan Compliance Program Trial

Employers will have the opportunity to review and self-correct retirement plan failures upon being identified for plan examination by the IRS. The IRS announced in early June 2022 the rollout of a new pre-examination compliance pilot program with the intention that it will save resources spent on employee benefit plan audits. The announcement stated that the IRS would evaluate the program at the end of the pilot period, but it did not specify the duration of the period.

Source: Ogletree.com, July 2022

IRS Launches Pre-Examination Compliance Pilot Program

In June, the IRS announced a new 90-day pre-examination compliance pilot program for retirement plans. Under this program, the IRS will notify you by written letter that your plan has been selected for an upcoming examination. Following receipt of the letter, you will then have 90 days to review your plan's document and operations, to determine whether your plan satisfies all current requirements. If you don't respond within 90 days by completing and returning a questionnaire, your plan will be scheduled for a formal examination.

Source: Newportgroup.com, July 2022

Long-Term Part-Time Workers May be Eligible to Participate in a 401k Plan

The SECURE Act includes significant changes to several defined contribution plan rules. One of these changes in particular affects long-term, part-time employees. Through the Act, LTPT employees may be eligible to participate in a 401k plan.

Source: Fidelity.com, July 2022

How Retirement Plans Can Correct Required Minimum Distribution Errors

When an error in administering required minimum distributions from a defined benefit or defined contribution plan violates Internal Revenue Code requirements, plan sponsors may be able to fix the problem by making corrective distributions under IRS procedures. This article outlines the solutions available when qualified or 403b plans miss or miscalculate RMDs. The coverage includes streamlined procedures for plans applying for IRS approval of a proposed correction and options for requesting a waiver of participants' excise taxes.

Source: Mercer.com, July 2022

Due Dates for DC Plan Lifetime Illustrations Approaching

All ERISA-covered DC plans with participant direction of investments need to provide benefit statements with benefit illustrations to all participants with account balances by August 14, 2022. DC plans without participant direction have various due dates depending on the plan's plan year.

Source: Segalco.com, June 2022

The IRS's New Pre-Examination Pilot Program: Key Features and Questions

Earlier this month, the IRS announced a new pilot program under which retirement plan sponsors will be given a 90-day notice that their plan has been selected for an examination which they may be able to largely avoid by taking certain steps. This article discusses the key features of the pilot program, along with some questions and considerations.

Source: Groom.com, June 2022

Homework and Deadlines Matter: New IRS Pre-Audit Compliance Program for Retirement Plans

As part of a new program, the IRS will send a letter notifying a plan sponsor that its retirement plan has been selected for an upcoming examination and give the plan sponsor 90-days to identify and voluntarily correct any compliance issues that may be self-corrected. Failure to respond by the 90-day deadline will result in an examination. Retirement plan sponsors who receive a pre-examination notice should immediately begin working with their lawyers and other advisors to determine the best way to respond to the IRS notice.

Source: Employeebenefitsblog.com, June 2022

Agencies Release Final Form 5500 Revisions for MEP Reporting

On May 23, 2022, the IRS, DOL, and the PBGC released final regulations that make revisions to Forms 5500 and 5500-SF applicable to annual reports for retirement plans (including 401k plans) filed for plan years beginning on or after January 1, 2022.

Source: Compliancedashboard.net, June 2022

2023 IRS Limits Forecast Update - May

This is an update to the Milliman 2023 IRS limits forecast using the U.S. Bureau of Labor Statistics report published June 10, 2022. With only four months remaining for the federal fiscal year 2022, our forecast of the 2023 IRS limits could set a record one-year increase, both in dollars and percentage, even if inflation transitions to 3.0% annually (0.25% per month) for June through September 2022.

Source: Milliman.com, June 2022

401k Compliance Check: Have You Recently Checked Your 401k Plan's Definition of Compensation

401k plan sponsors are required to include a legally compliant definition of compensation within the plan document. Unfortunately, compensation-related failures are common occurrences in connection with 401k plan administration. These failures may result in time-consuming and expensive corrections being required through the IRS's Employee Plans Compliance Resolution System to maintain the 401k plan's tax-qualified status.

Source: Foley.com, June 2022

New IRS Pre-Audit Compliance Program for Retirement Plans

Retirement plan sponsors should be aware of a new IRS pilot program, which permits plan sponsors to conduct a pre-examination "check-up" of retirement plan administration before the IRS begins a plan examination. As part of the program, the IRS will send a letter notifying a plan sponsor that its retirement plan has been selected for an upcoming examination and give the plan sponsor 90 days to identify and voluntarily correct any compliance issues that may be self-corrected. Failure to respond by the 90-day deadline will result in an examination.

Source: Employeebenefitsblog.com, June 2022

Retirement Plan Record Retention: Keeping Your Data Clean

Maintaining a well-organized archive of your participants' retirement records sounds easy in theory, but can be difficult in the real world. It's easy to grow lax about keeping up with the deluge of data for which you're responsible, but careless record retention will always come back to haunt you. Whether it's the unnecessary and laborious administrative process needed to perform daily functions, a legal action, or a government audit, inaccurate data can cost you plenty.

Source: Segalco.com, June 2022

401(k)ology: Know Your Participant Notices

If you are a service provider, plan sponsor, or participant in a retirement plan, then you are keenly aware of the numerous participant communications required to be provided regularly. Unless and until the disclosure requirements change, employers should know which notices are required for your plan type, when must the notices be provided, who must receive the notice, how the notice can be distributed, and what happens if the notice was not provided.

Source: Newfront.com, June 2022

The SECURE Act's DC Plan Lifetime Income Disclosure Requirements

The deadline for complying with the defined contribution plan lifetime income disclosure requirement is quickly approaching. Now is the opportunity for plan sponsors and retirement committees to reacquaint themselves with the requirements and prepare for how to proactively use the changes to promote plan participation, education, and conversation regarding their retirement plans.

Source: Milliman.com, June 2022

IRS Announces New Pre-Audit Compliance Pilot Program

The IRS announced via newsletter a new pre-audit compliance opportunity for employer-sponsored retirement plans selected for audit beginning immediately. The program as described in the announcement provides some powerful incentives to encourage plan sponsors to voluntarily comply in the 90 days following receipt of the initial letter.

Source: Wagnerlawgroup.com, June 2022

IRS Announces New Pilot Program for Retirement Plan Audits

The IRS announced a new pre-examination compliance pilot program beginning in June 2022. Under the pilot program, the IRS will notify a plan sponsor by letter that its retirement plan has been selected for examination and will provide the plan sponsor with 90 days to review its retirement plan documents and plan operations and to correct any issues that may be found. This article provides background and describes the pilot program in more detail.

Source: Verrill-law.com, June 2022

Anonymous Correction Guidance Still Available Under EPCRS

New EPCRS procedures have replaced the anonymous submission under VCP with a Pre-Submission Conference. The plan sponsor's representative can submit a VCP Pre-submission Conference request with the IRS. Unlike the anonymous VCP submission, there is no fee for a Pre-Submission Conference.

Source: Graydon.law, June 2022

IRS Unveils New Pre-Examination Compliance Pilot Program for Retirement Plans

The IRS Employee Plans division announced a new pilot program whereby it will notify retirement plan sponsors 90 days in advance that their plan has been selected for an upcoming examination. The pilot program has three key features. Although it is only a pilot, this pre-examination pilot program marks a potentially helpful new tool for plan sponsors to ensure tax-qualification compliance for retirement plans.

Source: Erisapracticecenter.com, June 2022

IRS Provides Guidance for Late Pre-Approved Plan Restatements

This IRS clarification allowing correction of these late adoptions without requiring a corresponding VCP filing is very helpful. While the IRS did not specifically address pre-approved defined contribution plans, for which the deadline to adopt a restatement for the current cycle is July 31, 2022, it is reasonable to conclude that this guidance will apply to those plans as well.

Source: Groom.com, June 2022

Arbitration of ERISA Claims Under the Microscope. Where are the Courts and Congress Headed?

Due to the lack of Supreme Court guidance on these issues, it is still not clear the extent to which particular arbitration provisions may apply to ERISA fiduciary breach claims. However, several Circuit Courts of Appeal have now weighed in and a bill called the Employee and Retiree Access to Justice Act has been introduced in the House and Senate (H.R. 7740 and S. 4219) with the express purpose of making predispute and nonconsensual post-dispute arbitration clauses unenforceable. What is a plan sponsor favoring arbitration to do?

Source: Cohenbuckmann.com, June 2022

IRS Extends Relief From Physical Presence Requirement

The IRS released Notice 2022-27, granting a six-month extension to the temporary relief from the "physical presence requirement" for tax-qualified retirement plans, including 401k plans, that was previously announced in June 2021. The Notice extends the relief -- originally scheduled to expire on June 30, 2022 -- by an additional six months, through December 31, 2022.

Source: Compliancedashboard.net, May 2022

IRS Addresses Impact of Missing a Pre-Approved Plan Restatement Deadline

The IRS in a May 23 edition of Employee Plan News provides a comprehensive discussion of the impact of missing a deadline for restating a pre-approved 401(a) or 403(b) plan and how such a situation can be handled. To maintain a plan's status as a pre-approved plan and retain uninterrupted reliance on its opinion letter, an employer must adopt each applicable cycle's restatement by the due date for that cycle, the IRS reminds.

Source: Asppa.org, May 2022

Regulatory Monitor: Department of Labor Update

In this article, Groom Principal David Kaleda explains the significance and contents of the "Supplemental Statement on Private Equity in Defined Contribution Plan Designated Investment Alternatives" issued by the DOL in December, including the Department's position concerning such investment alternatives, and its emphasis on several important fiduciary principles discussed in the Information Letter.

Source: Groom.com, May 2022

Final Form 5500 Revisions Guidance Issued

This guidance focuses primarily on defined benefit reporting changes affecting Schedule MB Multiemployer Defined Benefit Plan and Certain Money Purchase Plan Actuarial Information, Schedule SB Single-Employer Defined Benefit Plan Actuarial Information, and Schedule R Retirement Plan Information. Additionally, the final revisions add plan characteristic codes reported on Form 5500 and Form 5500-SF by sponsors of multiple employer plans, to indicate the type of MEP arrangement.

Source: Futureplan.com, May 2022

2023 IRS Limits Forecast

Inflation in the 12 months ending April 30, 2022, was 8.3%. With only five months remaining for FFY 2022, the 2023 IRS retirement plan limits could show the highest one-year increase, both in dollars and percentage, even if inflation transitions to a more reasonable 3.0% annually for the final five months.

Source: Milliman.com, May 2022

Revisions to Form 5500 Series for 2022 Reporting Released

The DOL, Treasury, and Pension Benefit Guaranty Corporation on May 20th released the final revisions to the forms and instructions for the Form 5500 series to be used for reporting concerning plan years beginning on or after Jan. 1, 2022. They also indicated, however, that the review of additional considerations and revisions will continue.

Source: Asppa.org, May 2022

Common 401k Plan Mistakes: Running the Plan Based on Your Employee Handbook

Employee handbooks are great for communicating an employer's basic policies and procedures. However, a retirement plan sponsor will always want to check the actual plan document to confirm proper plan operations. When it comes to retirement plans or benefits in general, an employee handbook will not get into some of the details, and this can cause issues, both minor hiccups, and major problems. Here are several situations encountered in working with retirement plans.

Source: Conradsiegel.com, May 2022

Time is Running Out to Meet the July 31, 2022 'Cycle 3' Deadline

Employers sponsoring 401k or other types of defined contribution plans "pre-approved" by the IRS should be aware that the restatement deadline is quickly approaching. The IRS requires pre-approved plans to be amended and restated every six years to incorporate recent law changes. The deadline for the current restatement cycle, "Cycle 3," is July 31, 2022. You should have received one or more notices from your current document provider. Failing to timely adopt a Cycle 3 restatement may jeopardize a plan's favorable tax status.

Source: Benefitsnotes.com, May 2022

Crypto, SDBAs, and Your 401k Plan: What Now?

Plan sponsors may see more cryptocurrency investment options available to plans in the future. The hope, of course, is the DOL will continue to evolve its guidance around this growing trend, especially as it relates to SDBAs. For now, there is much for a plan sponsor to weigh and discuss with its advisors when it comes to offering cryptocurrency investment options and determining the proper level of oversight associated with implementing or maintaining an SBDA.

Source: Benefitslawadvisor.com, May 2022

Dealing With Undocumented Workers in ERISA Plans

Dealing with such plan participation adds yet another layer of administrative difficulty and legal exposure for employers who hire employees not authorized to work in the U.S. ERISA does not exclude individuals otherwise qualifying as common law employees from plan rights and protections simply because of their immigration status. However, although the DOL has affirmed that other federal statutes, such as the FLSA, protect undocumented workers, it has conspicuously failed to formally state that ERISA does too.

Source: Benefitslawadvisor.com, May 2022

IRS Extends Temporary Relief From the Physical Presence Requirement

The IRS announced that it is extending to the end of 2022 the temporary relief from the requirement that certain participant elections be witnessed in the physical presence of a plan representative or a notary public. In Notice 2022-27 the IRS says that due to the pandemic, it is extending the temporary relief provided in Notice 2021-40 from the requirement that certain participant elections be witnessed in the physical presence of a plan representative or a notary public, the physical presence requirement.

Source: Asppa.org, May 2022

Required Participant Notices: A Refresher

Providing information and notice to plan participants is not a suggestion, it's a requirement. A recent blog entry provides some reminders as to why it matters and what notices need to be sent.

Source: Asppa.org, May 2022

Proposed Changes to Prohibited Transaction Exemption Procedures: White Paper

Congress provided for three kinds of possible exemptions from prohibited transaction prohibitions: statutory exemptions, class exemptions, and individual exemptions. The DOL has long had regulations setting forth the procedures for applying for class and private exemptions and has granted many such exemptions over the last 48 years. Now, however, the DOL is proposing changes to its procedures that would significantly modify the process and create additional burdens on applicants and independent fiduciaries covered by the exemption.

Source: Wagnerlawgroup.com, April 2022

Finding Missing Participants: The DOL's Prescription

Missing and nonresponsive participants are a liability for any retirement plan. Undelivered notices, uncashed checks, and unreturned election forms all create compliance issues and additional administrative expenses. Unfortunately, a participant's "radio silence" gives the plan no relief from the obligation to keep accurate records and take appropriate steps to ensure that the participants and beneficiaries are paid their full benefits when due. The DOL has some reader-friendly advice for plan administrators. Here are the highlights.

Source: Erisadc.com, April 2022

401k Compliance Check: Required Participant Notices

This piece focuses on the variety of typical notices that are required for 401k retirement plans. Failing to provide required notices can subject the plan, and its fiduciaries, to liability. Notice failures can result in penalties imposed by the IRS or DOL, or lawsuits from participants who were not informed about important information that affected their decision-making.

Source: Foley.com, April 2022

Oops! We're in a Controlled Group of Companies. What Happens to Our 401k Plan Now?

Whether you made the mistake of thinking that you were or were not in either a controlled group of companies or an affiliated service group, your plan will have fundamental tax qualification issues that must be corrected before you wind up in an IRS audit. Here is what to be on the lookout for.

Source: Employeebenefitslawgroup.com, April 2022

DOL Issues Guidance on Cryptocurrency Retirement Plan Investments

The DOL issued guidance relating to cryptocurrency as an investment option in participant-directed 401k plans. It was the closest the DOL has ever come to saying "No way!" on a fiduciary issue. Here is a rundown on the guidance.

Source: Mcdonaldhopkins.com, April 2022

Industry Groups Push Back on Recent DOL Rulemaking Practices

Spurred by the recent cryptocurrency "compliance assistance release," nearly a dozen industry trade groups -- including the U.S. Chamber of Commerce -- have expressed concern about "a trend at EBSA away from rulemaking based on a robust notice and comment process."

Source: Asppa.org, April 2022


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