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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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IRS Updates VCP Electronic Submission Procedures, Revises Form

Abstract: On June 28, 2019, the IRS issued its June Employee Plans News, in which the agency announced comparatively minor changes to the submission procedures applicable to the IRS Employee Plans Compliance Resolution System. The changes include revisions to required Forms 8950 and 8951, along with technical changes to the electronic submission process itself.

Source: Compliancedashboard.net, August 2019

Quick Fixes for a 401k Plan Sponsor's Errors and Problems

Abstract: The beauty of 401k plans is that no matter the problem that a plan sponsor may have, there is a rational solution to that problem. The only problem is that most plan sponsors are unaware of these fixes because they're unaware that what they have in their 401k plan may be a problem. This article is about quick fixes that a 401k plan sponsor may utilize to fix a problem they should be aware of.

Source: Jdsupra.com, August 2019

Rollover Period for Retirement Plan Loan Offsets

Abstract: If a participant defaults on a retirement plan loan after they separate from service, the plan will "offset" the outstanding balance of the loan, deducting it from the participant's account and treating it as a distribution. Prior to the Tax Cuts and Jobs Act of 2017, if a participant wanted to defer taxes on that unpaid loan balance, they had 60 days to roll the cash value to another eligible retirement plan or IRA. With the update in December 2017, that deadline was extended to the due date for the participant's tax return, including extensions, for the year in which the loan offset occurred.

Source: Fidelity.com, August 2019

Retirement plans: 2019 Summer Recap

Abstract: This article recaps recent defined benefit and defined contribution retirement plan developments. Highlights include IRS backing down on prohibiting voluntary retiree cash outs, PBGC tweaks to reporting and disclosure for single and multiemployer plans, SEC finalizing their broker-dealer investment recommendations rule, and several compliance refinements and reminders.

Source: Buck.com, August 2019

Tackling the Missing Participant Problem

Abstract: Missing participants, and the problems they cause, are becoming a more prominent problem for plan administrators, argues ERISA attorney Heather B. Abrigo. "It's really come to the forefront," said Abrigo, a partner at Drinker Biddle & Reath LLP, in a July 16 webcast offered by ASPPA. "Plan sponsors really need to start addressing the issue," she told attendees.

Source: Napa-net.org, August 2019

DOL Move Expands Definition of Employer for Multiple Employer Plans

Abstract: The DOL published its highly anticipated Final Rule, which allows working owners with no employees and companies in unrelated industries to band together to create a single defined contribution retirement plan for their employees, known as a multiple employer plan (MEP). Specifically, the Final Rule expands the definition of "employer" under Section 3(5) of ERISA to allow bona fide employer groups and professional employer organizations to act as an "employer" for purposes of sponsoring a MEP.

Source: Ballardspahr.com, August 2019

Service Provider's Auto-Portability Proposal Receives DOL Blessing

Abstract: The DOL has published in the Federal Register a prohibited transaction exemption granted to a service provider that has proposed what it describes as an automatic portability program for retirement plan assets. This exemption -- PTE 2019-02 -- was considered necessary so that Retirement Clearinghouse could receive fee compensation in connection with the services it intends to provide in this automatic portability program.

Source: Ascensus.com, August 2019

Making Sense of the New Auditing Standard for ERISA Plans

Abstract: SAS 136 clarifies and formalizes current best practices that auditors working with employee benefit plans should already be familiar with. It also provides detailed requirements unique to employee benefit plans, which will help auditors meet their obligations. Some of the most significant provisions found in SAS 136 are described here.

Source: Ascensus.com, July 2019

DOL Issues Association Retirement Plan (a.k.a. MEP) Final Regulations

Abstract: Scheduled for publication in the Federal Register this week are Department of Labor (DOL) final regulations on association retirement plans, a name that in very general terms equates to multiple employer plans, or MEPs. In addition to the final regulations, the DOL has issued a companion request-for-information document, "Open MEPs" and other issues.

Source: Ascensus.com, July 2019

Traps for the Unwary: Code Section 410(b) Coverage Testing Concerns in Transactions

Abstract: With a recent uptick in mergers and transactions, it's worthwhile to provide a refresher on some coverage testing issues related to retirement plans. Although a seemingly mundane topic, coverage testing should be kept in mind in corporate transactions where the buyer is acquiring an entity that sponsors a 401k plan and the fate of that plan is not resolved prior to the closing of the transaction. Failure to consider coverage testing concerns in the years following an acquisition can lead to qualification failures in retirement plans, which potentially can require millions of dollars to correct.

Source: Napa-net.org, July 2019

DOL Issues Temporary Form 5500 Relief for ERISA MEPs

Abstract: The Department of Labor has issued temporary penalty relief related to certain Form 5500 requirements for multiple employer plans (MEPs) subject to ERISA Section 103(g). The relief is contained in Field Assistance Bulletin 2019-01, which the DOL issued on July 24.

Source: Asppa.org, July 2019

IRS Determination Letters Are Back in Play for Certain Ongoing Plans

Abstract: In response to periodic requests to expand the determination letter program, the IRS has issued welcome guidance in Rev. Proc. 2019-20.1 The guidance reopens the determination letter program for statutory hybrid plans (e.g., cash balance plans) and merged plans, and provides sanction relief from plan document failures identified and corrected as part of those determination letter applications. The prior program is reviewed and the new Revenue Procedure is summarize in this article.

Source: Groom.com, July 2019

IRS Issues Guidance to Plan Document Providers, TPAs, and Plan Sponsors

Abstract: Over recent weeks, the IRS has issued several items of guidance that are important to plan document providers, TPAs, plan sponsors, and others involved with qualified retirement plans. The guidance includes the 2019 Operational Compliance List, revisions to the plan correction (EPCRS) procedures, and a limited expansion of the determination letter program for individually designed plans. The guidance is reviewed here.

Source: Asc-net.com, July 2019

Top 10 Areas of Focus in IRS Investigations of Retirement Plans

Abstract: At any point an IRS agent may contact a plan sponsor that its plan has been selected for audit. Audits are never pleasant, but to minimize the pain, a plan sponsor may consider a compliance self-review to ensure that the plan is operating correctly, its plan documents comport with plan operation, and plan records are complete and organized before the IRS comes knocking. Here are the top 10 issues of IRS focus in its audit of qualified plans.

Source: Jdsupra.com, July 2019

It Could Happen to You: Tips for Acing a Benefit Plan Audit

Abstract: Over the past several years, the IRS and DOL have significantly increased the number of benefit plans audits conducted each year. As a result, it is important for plan sponsors to understand the types of issues that often arise in connection with such audits. At the recent PSCA 2019 National Conference, Brian Tiemann explained what plan sponsors should expect if their benefit plan is selected for audited. This is his presentation.

Source: Employeebenefitsblog.com, July 2019

How to Find, Fix and Avoid Plan Loan Mistakes

Abstract: Plan sponsors who choose to include a loan feature in their retirement plan must take care to ensure their loan program is operated in compliance with the tax rules and the plan's loan policies to avoid unintended consequences for loan recipients and the plan. To help you keep your loan program in compliance, here's an overview of the basic rules for plan loans and some best practices for finding, fixing and avoiding plan loan mistakes.

Source: Newportgroup.com, June 2019

Which 401k Plan Errors Can Be Self-Corrected?

Abstract: Until recently, SCP was limited to the correction of operational failures, but in 2019, the IRS expanded SCP to permit the correction of certain plan document failures, i.e., plan provisions -- or missing plan provisions -- that cause the plan to be disqualified. Using SCP can simplify and speed up corrections, and lower their cost, but it is not always the best option.

Source: Thomsonreuters.com, June 2019

Orderly Dissolution: Best Practices for Bankruptcy Plan Terminations

Abstract: Retail bankruptcies and corporate debt are on the rise, and economic contraction is inevitable after an unusually long bull market. With that in mind, retirement plan administrators should be mindful of procedures related to the orderly dissolution of their retirement plan in the event of a bankruptcy proceeding.

Source: Mtrustcompany.com, June 2019

Alternatives for Retirement Plan Participant With Insufficient Beneficiary Designation Forms

Abstract: One of the key issues with respect to retirement plan distributions is proper handling of beneficiary designations. Issues that arise for retirement plan sponsors related to beneficiary designations include incomplete beneficiary designation forms, benefits being split among beneficiaries in unclear or mathematically impossible ways, or even pre-deceased beneficiaries. While your human resources department can take steps to eliminate these problems up front, and should check behind employees as they submit their forms, there are still situations that arise when the forms attached to a plan are simply insufficient.

Source: Hallbenefitslaw.com, June 2019

DOL Provides Needed Clarification on Authorized Representatives Acting for ERISA Claimants

Abstract: There are times when an individual who has a claim under ERISA is unable to bring that claim on their own. In these situations, an authorized representative of the claimant can bring the claim instead. A recent DOL Information Letter, issued at the end of February, provides clarification regarding the ability of this individual to act on behalf of the claimant.

Source: Hallbenefitslaw.com, June 2019

They're Back... Form 5500 Filings

Abstract: It's that time of the year again, 5500 filing season is in full swing. Form 5500 is required for employee benefit plans that started the plan year with 100 or greater enrolled employees. It is imperative that you, as plan sponsors, are handling this responsibility or have confirmed that it is being done on your behalf.

Source: Frenkelbenefits.com, June 2019

Do Your Participants Read Their Plan Documents? Why It May Matter

Abstract: How long do participants have to sue for fiduciary breaches? Sometimes procedural cases can have a big impact on employee benefit plans. The Supreme Court has just agreed to review another case on the length of time participants have to sue for fiduciary breaches. This new case may also have a significant impact on fiduciary liability.

Source: Cohenbuckmann.com, June 2019

SEC Finalizes Broker-Dealer/Advisor Standard of Conduct Rule

Abstract: On June 5, 2019, the SEC, by a 3-1 vote, (1) finalized its "Regulation Best Interest," providing new conduct standards for broker-dealers making recommendations to retail customers, (2) published an "Interpretation Regarding Standard of Conduct for Investment Advisers," and (3) finalized a new requirement that brokers and investment advisers provide retail investors a "Relationship Summary." The new rules are primarily of interest to investment professionals. They will, however, affect retirement plan sponsors in two ways.

Source: Octoberthree.com, June 2019

2019 DC Plan Compliance Calendar

Abstract: This calendar is designed to provide a general overview of certain key defined contribution plan compliance dates.

Source: Findley.com, June 2019

DC Retirement Plan Oversight - Considerations for Terminated Participants

Abstract: The process to force out terminated employees with balances under $5,000 does require thoughtful engagement by the plan sponsor; however, there could be significant benefits for plan sponsors and their employees, as well as for terminated participants. Regardless, managing terminated participants is an important retirement plan oversight topic that should be reviewed periodically and documented.

Source: Fiallc.com, June 2019

SEC Adopts Rules and Interpretations to Enhance Protection and Preserve Choice

Abstract: The SEC voted to adopt a package of rulemakings and interpretations designed to enhance the quality and transparency of retail investors' relationships with investment advisers and broker-dealers, bringing the legal requirements and mandated disclosures in line with reasonable investor expectations, while preserving access (in terms of choice and cost) to a variety of investment services and products.

Source: Sec.gov, June 2019

Groups Ask DOL to Make 401k Electronic Delivery the Default

Abstract: Eight organizations associated with defined contribution plans, including the Investment Company Institute and the SPARK Institute, have submitted a letter to the Department of Labor asking it to propose regulations that would permit plan sponsors to make electronic delivery the default method of delivery for retirement plan disclosures and notices. If employees did not want electronic delivery, they would have the ability to request paper copies.

Source: Planadviser.com, June 2019

SEC Adopts Best Interest Standard, Disclosure Duties

Abstract: At an Open Meeting on June 5, 2019, and after over a year of consideration, approximately 6,000 comment letters and investor testing, the SEC formally adopted four regulatory measures intended to enhance the protection of retail investors while preserving existing investment industry business models and the ability of investors to choose among different types of providers. This is a summary of the Commission's actions.

Source: Klgates.com, June 2019

DOL Advisory Council to Meet in June

Abstract: The 196th meeting of the Advisory Council on Employee Welfare and Pension Benefit Plans (also known as the ERISA Advisory Council) will be held on June 25-27, 2019. The three-day meeting will take place at the U.S. Department of Labor in Washington, DC.

Source: Federalregister.gov, June 2019

For 401k Errors, It Seems to Be All Payroll These Days

Abstract: For a 401k plan sponsor, many of the problems that also seems to be getting government attention are payroll issues. This article is about the many different issues from payroll that are causing headaches for plan sponsors.

Source: Jdsupra.com, June 2019

IRS Regulations Address Withholding on Retirement Payments Made Outside the U.S.

Abstract: Scheduled for publication in the Federal Register are proposed IRS regulations on circumstances when income tax withholding must be applied to certain payments from retirement arrangements and commercial annuities. Specifically, these regulations address required withholding for payments made to destinations outside the United States, or made to a U.S. financial institution by a person with no U.S. address. The proposed regulations are intended to replace IRS Notice 87-7, the primary guidance currently governing such withholding.

Source: Ascensus.com, May 2019

Top 10 Areas of Focus in DOL Investigations of Retirement Plans

Abstract: In light of the DOL's active enforcement program and the resulting recoveries, retirement plan administrators should consider a compliance self-review, including on the issues that the DOL appears to focus the most. To that end, here are the top 10 issues of DOL focus with respect to retirement plan fiduciary compliance. This list is a reminder of the importance of a proactive self-review by plan administrators, even before the DOL initiates an investigation.

Source: Morganlewis.com, May 2019

Does Your Retirement Plan Incorporate State Law Into the Plan? Check Your Spousal Benefit Obligations

Abstract: A recent, unpublished Ninth Circuit court opinion held that the Plan's choice of California law required the plan to provide spousal survivor rights to registered domestic partners, because California law affords registered domestic partners the same legal status as spouses, and because doing so did not conflict with any provision of the plan document, ERISA or the Internal Revenue Code. In light of the opinion, plan sponsors should examine their plan documents to determine whether or not choice of law provisions carry state domestic partner rights into their plan document, and if this is the case, should consult with counsel as to how that might impact their plan distribution and plan loan approval procedures, and QDRO procedures as well.

Source: Eforerisa.wordpress.com, May 2019

How to Understand and Review Form 5500

Abstract: There is no doubt that operating an ERISA retirement plan can be costly and time-consuming, and it may be burdensome to devote company resources to understanding complex rules and regulations. Reviewing trustee reports, reconciling payroll deposits, and meeting employee needs related to the plan is time-consuming. On top of all that, there is the annual requirement to report plan information to the DOL via Form 5500. Here are the important items you need to review on your Form 5500-SF (short form) or Form 5500 (long form).

Source: Consultrms.com, May 2019

ERISA Advisory Council to Review State Unclaimed Property Fund Procedures

Abstract: The 2019 Advisory Council on Employee Welfare and Pension Benefit Plans, has said that it will be reviewing transfers of uncashed checks from ERISA plans to state unclaimed property funds and the procedures states use with those funds. The review is relevant to the effort to locate plan missing participants and provide them their funds.

Source: Napa-net.org, May 2019

IRS Expands Determination Letter Program

Abstract: The IRS has expanded the determination letter program for individually designed plans. Under Revenue Procedure 2019-20, the IRS will now accept determination letter applications for statutory hybrid plans (e.g., cash balance plans) during the 12-month period beginning September 1, 2019, and ending August 31, 2020. In addition, the IRS will now accept such applications for certain merged plans on an ongoing basis.

Source: Bradley.com, May 2019

IRS Updates EPCRS Plan Correction Procedure

Abstract: Through Revenue Procedure 2018-52, the IRS has updated its system of correction programs for retirement plans known as the Employee Plans Compliance Resolution System. EPCRS permits plan sponsors to correct certain operational and other failures in order to preserve the tax-favored status of their plan. It has become an increasingly important tool for plan sponsors to maintain compliance and avoid substantial penalties in an IRS audit.

Source: Bradley.com, May 2019

New IRS Rules Allow Retirement Plan Sponsors to Self-Correct Broader Range of Plan Failures

Abstract: The IRS recently issued a new version of its Employee Plans Compliance Resolution System that gives sponsors of tax-qualified retirement plans additional options for self-correcting plan failures. The new EPCRS allows plan sponsors to use the Self-Correction Program in several circumstances, rather than requiring a Voluntary Compliance Program filing with the IRS and payment of the applicable user fee.

Source: Hansonbridgett.com, May 2019

IRS Provides Welcome Relief From High VCP Fees

Abstract: With Revenue Procedure (Rev. Proc.) 2019-19, the IRS updates the Employee Plans Compliance Resolution System by expanding the availability of self-correction options for more kinds of plan failures. The IRS anticipates that this expanded guidance will increase plan compliance and reduce some costs for employers.

Source: Ascensus.com, May 2019

What's the Difference Between a Limited Scope and an ERISA Section 103(a)(3)(C) audit?

Abstract: Possibly the biggest change as a result of the new SAS is the removal of the "limited scope" audit terminology and the related disclaimer. Once effective, SAS 13X will create a concept known as a "103(a)(3)(C)" audit, where the auditor is not disclaiming an opinion, but is instead opining on the non-certified audit areas and performing limited procedures on the investments. The term isn't as quick to say or as easy to remember as the limited scope audit. At first glance it only appears to be a name change to the same concept, but that is not the case.

Source: Belfint.com, May 2019

IRS Reveals Plans to Enable Electronic Filing of Form 5500-EZ

Abstract: The IRS has informally revealed that it intends to enable owner-only retirement plans to file Form 5500-EZ electronically through the web-based EFAST2 Electronic Filing System. Form 5500-EZ, Annual Return/Report of One-Participant Retirement Plan or a Foreign Plan is a simplified plan return that can be filed by sole proprietors and spouses or partners and spouses that have no common law employees.

Source: Ascensus.com, May 2019

IRS Expands Determination Letter Program - Revenue Procedure 2019-20

Abstract: In 2018, the IRS requested comments on the potential expansion of the scope of the determination letter program for individually-designed plans. On May 1, 2019, the IRS issued Revenue Procedure 2019-20 which describes two additional limited situations in which plan sponsors may request determination letters.

Source: Wagnerlawgroup.com, May 2019

DOL Enforcement Priorities and Terminated Participants

Abstract: The DOL has National Enforcement Priorities. For the past few years their Major Case Enforcement Priority has centered on professional fiduciaries and service providers with large amounts of AUC (assets under custody) or AUA (assets under administration) and, on delinquent contributions. But the DOL also has National Enforcement Projects, enforcement focused on protecting plan assets and participants’ benefits via field office investigations. One of the DOL's National Enforcement Projects is Protecting Benefits Distribution. The distribution focused PBD has three components.

Source: Penchecks.com, May 2019

IRS Issues Retirement Plan "Operational Compliance" Checklist for 2019

Abstract: The Operational Compliance List is intended to identify changes in qualification requirements that are effective during a particular calendar year. Now, plan sponsors can review the list to ensure their plans achieve operational compliance by identifying changes in qualification requirements effective during a calendar year. The IRS has issued its 2019 Operation Compliance List.

Source: Michaelbest.com, May 2019

IRS Expands Determination Letters for Hybrid, Merged Plans

Abstract: Just-released Rev. Proc. 2019-20 provides a limited expansion of IRS's determination letter (DL) program for individually designed retirement plans to allow reviews of hybrid or merged plans. The guidance also extends open remedial amendment periods for sponsors that can submit DLs under this procedure and offers sanction relief for plan document failures discovered during IRS's review of the DL application.

Source: Mercer.com, May 2019

IRS Expands Self-Correction Program for Certain Plan Failures

Abstract: Rev. Proc. 2019-19 expands the Self-Correction Program eligibility to permit certain Plan Document Failures and certain plan loan failures to be self-corrected and also to provide an additional method under the SCP to correct Operational Failures by plan amendment. Importantly, the SCP allows the correction of certain plan failures without the need to contact the IRS or pay a user fee.

Source: Icemiller.com, May 2019

IRS Expands Self-Correction Program Primarily to Facilitate Plan Loan Corrections

Abstract: The IRS recently provided some welcome relief by expanding the types of failures eligible for self-correction. Revenue Procedure 2019-19, which contains an updated Employee Plans Compliance Resolution System, provides that certain plan document and operational failures, including some plan loan failures, may now be corrected through self-correction, without the added burden and expense of making voluntary correction program filings with IRS.

Source: Groom.com, May 2019

DOL Enforcement Results and Priorities

Abstract: The DOL's Employee Benefits Security Administration recently released 2018 statistics for its enforcement of ERISA. When combined with EBSA's recent commentary on its enforcement initiatives, fiduciaries can be better prepared to address compliance issues before a DOL audit. This is an analysis of the recently released 2018 statistics, as well as a look at the "national enforcement projects" for EBSA investigators.

Source: Euclidspecialty.com, April 2019

Addressing 401ks, Health Benefits, and Compensation After a Merger or Acquisition

Abstract: Integrating the employee benefits of the acquired employees following an acquisition is of critical importance, but it can be a difficult task for a buyer of a business from legal, administrative and employee relations perspectives. Making the transition a smooth one requires careful consideration and planning. Here are some important benefits issues that organizations should consider in connection with an acquisition.

Source: Voya.com, April 2019

Council Finds Noncompliance With ERISA Fidelity Bond Rules

Abstract: Citing evidence of noncompliance with ERISA requirement that retirement plans to be covered by fidelity bonds, the ERISA Advisory Council is recommending that the Department of Labor relaunch the updated rules it published in Field Assistance Bulletin 2008-04, this time focusing directly on plan sponsors and other plan officials and plan service providers as the targeted audience.

Source: Planadviser.com, April 2019

Revenue Procedure 2019-19: Enhancements to EPCRS are Great News for Plan Sponsors

Abstract: Newly published Revenue Procedure 2019-19 modifies and supersedes prior IRS guidance regarding the Employee Plans Compliance Resolution System to allow plan sponsors to self-correct an expanded number of problems that may affect retirement plan operations or documents. The new guidance, which took effect April 19, 2019, provides a significant opportunity for plan sponsors to correct loan defaults and other minor operational failures without going through the expensive and often time-consuming voluntary correction program procedure.

Source: Employeebenefitsupdate.com, April 2019

New Self-Correction Opportunities for 401k Plan Loans and Other Retirement Plan Errors

Abstract: The IRS issued an update to its retirement plan correction program that significantly expands the errors that can be corrected without filing with the IRS or paying a filing fee. Most importantly, many plan loan errors can now be self-corrected. For example, if loan payments are missed but the maximum loan term (generally 5 years) has not yet expired, the loan can be corrected by repaying it in full or reamortizing it over the original maximum loan term. This is the case even if the loan's normal cure period has already expired. An IRS filing is no longer required to correct a loan in this way.

Source: Sgrlaw.com, April 2019

DOL ERISA Enforcement on the Rise

Abstract: The DOL recently published its Fiscal Year 2018 "Fact Sheet" documenting the criminal and civil enforcement activities. Total monetary recoveries increased for the third year in a row, due to historically high recoveries from EBSA's civil enforcement actions. Although civil enforcement recoveries reached a historic high -- the third largest in over a decade -- the trend of increased criminal investigations and decreased civil investigations continued in FY 2018.

Source: Eversheds-Sutherland.com, April 2019

DOL Proposed Regulations on Overtime Exemption Could Increase 401k Plan Contributions

Abstract: The DOL issued proposed regulations that, if adopted in proposed form, would substantially increase compensation thresholds used to determine whether executive, administrative, and professional employees must be paid overtime. Among other repercussions, the new rules could indirectly affect retirement plans, including 401k plans, because increased overtime eligibility might result in higher wages.

Source: Compliancedashboard.net, April 2019

Puerto Rico Tax Reform Act Includes Retirement Provisions

Abstract: The Act focuses on promoting economic development in Puerto Rico and introduces various changes that impact individuals and corporations including changes to tax withholding rates for lump sum distributions from retirement plans, the compensation limit for Highly Compensated Employees, and distributions following a Disaster Declared by the Governor of Puerto Rico.

Source: Prudential.com, March 2019

IRS Issues Operational Compliance List for 2019

Abstract: On March 22, 2019, the Internal Revenue Service (IRS) issued the Operational Compliance List for tax-qualified retirement plans. The Operational Compliance List is mandated by IRS Rev. Proc. 2016-37 and notifies plan sponsors and service providers of changes to the tax-qualification requirements that became effective during the 2019 calendar year.

Source: Westlaw.com, March 2019

VCP Submissions Must Be Electronic Starting April 1

Abstract: If you send the IRS a Voluntary Compliance Program submission on paper on April 1, it will be returned to you. Beginning April 1, 2019, the IRS will only accept VCP submissions that are made electronically through Pay.gov. It will return VCP submissions made on paper that have a postmark after March 31, 2019.

Source: Asppa-net.org, March 2019

Frequent 401k Audit Finding Series - Documentation Failures

Abstract: During our 401k audits, we see failures occurring at both the plan level and the participant level. Documentation failures arise when transactions occurring in the plan can't be supported by written direction.

Source: 5500audit.com, March 2019

Conducting an Operational Compliance Review

Abstract: Prudent plan sponsors are proactive, have up-to-date procedures and guidelines, and periodically conduct an operational compliance review, or self-audit. Use these eight questions to help you pinpoint areas that may need to be addressed in your review.

Source: Findley.com, March 2019

Treasury Issues Proposed Hardship Withdrawal Regulations

Abstract: Since several provisions of the Budget Act were slated to be effective as early as January 1, 2019, it is important to understand the content of the proposed hardship regulations now in order to be poised to take advantage of them once they are finalized. This article discusses the content and impact of the proposed hardship regulations.

Source: Legacyrsllc.com, March 2019

2019 Compliance Checklist for Plans Subject to ERISA

Abstract: This compliance checklist incorporates defined benefit, defined contribution, and ERISA 403b requirements and provides information on the materials that you will need to file, filing due dates and agencies to which the filings should be made.

Source: Prudential.com, February 2019

2019 Expanded Reporting and Disclosure Requirements Calendar

Abstract: The 2019 Expanded Reporting and Disclosure Requirements Calendar provides who, what, when and where reporting and disclosure information for single-employer pension plans under ERISA. Plan administrators can access concise instructions for filing reports with the DOL, IRS and Pension Benefit Guaranty Corporation, and for disclosing tax and benefit information to U.S. plan participants, beneficiaries and alternate payees.

Source: Willistowerswatson.com, February 2019

ADP/ACP Testing Deadline

Abstract: March 15 is a well-known date in the defined contribution world. This is the date that corrective distributions must be processed for a failed ADP/ACP test (Actual Deferral Percentage/Actual Contribution Percentage test, respectively) for a calendar plan year. What can you do to prepare?

Source: Watkinsross.com, February 2019

It's Audit Time, Do You Know What Your Recordkeeper Is Doing?

Abstract: All too many 401k and pension plan sponsors and committee members still mistakenly believe that their recordkeeper is responsible for all plan compliance. Many services agreement makes the plan sponsor responsible for plan administration even though they are not actually taking care of most compliance matters themselves. Some new practices can help insure that the plan is run correctly and avoid potentially expensive penalties. Here are some steps to include in an action plan for coordinating with your recordkeeper.

Source: Cohenbuckmann.com, February 2019

Who's Actually Performing Your 401k Audit?

Abstract: You recently met the requirement that necessitated an audit of your 401k Plan. You reach out to your financial advisor, third-party administrator, or perhaps even Google around for a 401k Plan auditor. After speaking to the partner of a few firms that you discovered, including the review of their amazing marketing material, you finally choose a firm. The date is set for the auditor to come out and start the audit. To your surprise, the partner that was heavily involved during the auditor search is nowhere onsite during the audit and the majority of testing is performed by the newer staff auditors. Welcome to the modern world of public accounting.

Source: Poolercpa.com, February 2019

ERIC Weighs in on Guidance Related to Missing Retirement Plan Participants

Abstract: The ERISA Industry Committee (ERIC) today submitted suggestions to the U.S. Department of Labor Assistant Secretary of Labor Preston Rutledge on guidance related to the challenge of employers locating missing retirement plan participants.

Source: Eric.org, February 2019

The Cost of Non-Compliance Just Increased - DOL Announces Increased Penalties for 2019

Abstract: The Department of Labor recently released its 2019 inflation-adjusted penalties for benefits-related violations. Legislation adopted in 2015 requires adjustments to specific Department civil monetary penalties by January 15 of each year. Due to the government shutdown this year, the penalties were released a bit late, but are effective as of January 23, 2019. The cost-of-living adjustment is based on the Consumer Price Index for all Urban Consumers, which resulted in roughly a 2.5% increase.

Source: Winston.com, February 2019

Check Your Plan's Definition of Compensation in Light of Tax Reform

Abstract: The Tax Cuts and Jobs Act amended Section 217 of the Internal Revenue Code (Code) to suspend the deduction for moving expenses from 2018 through 2025. This change has a subtle yet meaningful impact on many tax-qualified retirement plans.

Source: Morganlewis.com, February 2019

2019 Compliance Calendar for Defined Contribution Plans

Abstract: A qualified retirement plan must meet various requirements throughout the year in order to retain the qualified status. If you are responsible for administering your company's defined contribution plan, it's critical to meet these deadlines. From processing failed ADP/ACP test refunds to delivering the participant fee disclosures, it can feel overwhelming. This DC plan compliance calendar will help you stay on track.

Source: Watkinsross.com, February 2019

Nitty Gritty Tasks That 401k Plan Sponsors Must Complete

Abstract: Despite how tedious some plan sponsors tasks are, they are all required tasks and failure to complete a task can cause a whole host of problems and money. This article is about tedious tasks that plan sponsors need to make sure is done and done correctly.

Source: Jdsupra.com, February 2019

2019 Hardship Distribution Rules Are Changing

Abstract: Occasionally an employee may experience a serious financial need. With no other help available, raiding a retirement plan may be the only option. Prior to 2019, employees and employers alike may have faced hurdles when wrestling with a hardship distribution. Due to new laws, however, hardship distribution rules are changing in 2019.

Source: Hallbenefitslaw.com, February 2019

Take Advantage of ERISA Safe Harbors: They Can Help Penetrate the ERISA Fog

Abstract: Attorneys would define a Safe Harbor as a provision of a statute or a regulation that specifies that certain conduct will be deemed not to violate a given rule. In our ERISA world, a Safe Harbor is a provision of the retirement plan law that can cut through the sometimes fog of ERISA and provide fiduciary protection to plan sponsors and at the same time make their retirement plans more efficient and effective. Here is a brief description of some of them.

Source: Retirementplanblog.com, February 2019

Updated 401k Plan Fix-It Guide - Participant Loans Don't Conform to IRC Section 72(p)

Abstract: Many 401k plans permit loans to participants. But often participant loans don't conform to the requirements of IRC Section 72(p) or are prohibited transactions under IRC Section 4975. This article reviews how to avoid and fix such mistakes.

Source: Irs.gov, February 2019

Correcting Average Deferral Percentage Test Failures

Abstract: The tax code governing 401k plans was written to prevent qualified retirement plans from overly favoring highly compensated employees. A series of non-discrimination tests were devised to measure whether a plan's design or operation tends to favoring the HCEs over the nonhighly compensated employees. This article dives into the different methods of correcting for an ADP test failure.

Source: Legacyrsllc.com, February 2019

401k Administration: Your Responsibilities Explained

Abstract: 401k plan administration is the process of maintaining a retirement plan and keeping it compliant with the Employee Retirement Income Security Act of 1974. Basically, all the day-to-day tasks that keep the 401k running. To help keep things as simple as possible, this article breaks the work into two types: Ongoing Administration, and Annual Compliance.

Source: Forusall.com, February 2019

EBSA Enforcement for 2019

Abstract: The Employee Benefits Security Administration enforces ERISA laws and regulations, including conducting civil and criminal investigations. EBSA enforcement of ERISA laws often results in recovering money from enforcement actions, voluntary fiduciary correction programs, abandoned plan programs, and informal complaint resolution. Enforcement statistics from 2018 and the Department of Labor strategic plan for the future provide some insights on enforcement for 2019.

Source: Bsllp.com, February 2019

Online VCP Filing System Up and Running

Abstract: IRS Revenue Procedure 2018-52 mandates online filing of VCP submissions starting April 1, 2019. The IRS opened the online filing system for voluntary use starting January 1 of this year. Paper filing is optional through March 31, 2019. This article reports on first experiences with the online filing system.

Source: Eforerisa.wordpress.com, February 2019

2019 Key Administrative Dates and Deadlines for Calendar-year DC Plans

Abstract: The calendar lists relevant 2019 administrative dates encountered by most defined contribution retirement plans, including deadlines for government filings and participant disclosures. The calendar also provides short descriptions of the actions required to meet each deadline.

Source: Milliman.com, January 2019

Advance Informational Copies of 2018 Form 5500 Annual Return/Report

Abstract: The Department of Labor, the Internal Revenue Service, and the Pension Benefit Guaranty Corporation released advance informational copies of the 2018 Form 5500 annual return/report and related instructions. Here are some of the changes that the instructions highlight.

Source: Ubabenefits.com, January 2019

Plan Fiduciaries Pay $538,248 for Failure to Timely Remit Contributions

Abstract: Plan Fiduciaries withheld tens of thousands of dollars from employees' paychecks, but did not forward these employee contributions to the plans, or did not forward them in a timely manner. The DOL also alleged in a lawsuit that fiduciaries to two retirement plans failed to administer the plans, leaving participants unable to gain information about their funds or gain access to their plan accounts.

Source: Planadviser.com, January 2019

Painless 401k Compliance in 2019? Avoid These Five Mistakes

Abstract: In a study of over 350 companies nationwide, the average company makes 53 payroll mistakes each year. If left unfixed, these mistakes can have some big ramifications, both in terms of compliance risk, as well as needless work during your annual audit. This article will walk you through five of the biggest 401k compliance mistakes.

Source: Forusall.com, January 2019

FAQS About Retirement Plan Hardship Distributions

Abstract: Typically, retirement plan sponsors intend for the funds contained in a retirement plan to be held until the participant retires. Under some circumstances, a participant may need the money now. Some retirement plans allow participants to receive hardship distributions, though they are not required to do so. This article examines some common questions about hardship distributions.

Source: Hallbenefitslaw.com, January 2019

IRS Increases User Fees for Certain Requests

Abstract: The IRS issued Revenue Procedure 2019-1, Revenue Procedure 2019-2, Revenue Procedure 2019-3, Revenue Procedure 2019-4, Revenue Procedure 2019-5 and Revenue Procedure 2019-7. These Revenue Procedures became effective January 2, 2019, and update the annual Revenue Procedures, which set forth the procedures for Determination Letter requests and Private Letter Ruling requests. Importantly, these Revenue Procedures increase the user fees for certain requests.

Source: Icemiller.com, January 2019


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