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The IRS recently issued Notice 2018-95 (the Notice), which clarifies the circumstances under which part-time employees must be given the opportunity to make deferral elections under their employers’ 403(b) plans. In particular, the Notice provides transition relief from the once-in-always-in (OIAI) condition for excluding part-time employees. Tax-exempt and governmental employers who sponsor 403(b) plans will want to confirm that they are including and excluding part-time employees correctly under this latest guidance.…
The Internal Revenue Service (IRS) recently issued a private letter ruling, PLR 201833012 (PLR) that has generated interest among employers about student loan benefit programs. An IRS official at a recent conference, however, cautioned practitioners to read the PLR because the scope of the PLR is more narrow than what some headlines may have led people to believe. In particular, the PLR did not allow employers to authorize distributions from 401(k) plans to allow employees…
In February, we reported that the Department of Labor (DOL) issued a proposed rule that could make it easier for small businesses to join together to purchase health insurance. That proposed rule sparked considerable debate on the general merits of association health plans (AHPs), as well as on the nuances of the proposed rule. Some commentators and experts remained skeptical of such arrangements, citing to the history of AHPs being used as a vehicle for…
In February, we reported that the Department of Labor (DOL) issued a proposed rule that could make it easier for small businesses to join together to purchase health insurance. That proposed rule sparked considerable debate on the general merits of association health plans (AHPs), as well as on the nuances of the proposed rule. Some commentators and experts remained skeptical of such arrangements, citing to the history of AHPs being used as a vehicle for…
In baseball, there is a common saying that a “tie goes to the runner.” Under this maxim, if a base runner and the baseball arrive at the base at the same time, the runner is safe. Stated another way, the baseball must arrive at the base before the runner in order for the runner to be out. The rule, essentially, construes close calls against the defense. Yet, many Major League Baseball umpires interpret the rule…
The IRS’s Tax Exempt and Government Entities Division recently issued a memorandum (the memo) to its auditors that directed them not to challenge a 403(b) plan as failing to satisfy the required minimum distribution (RMD) standards under circumstances set out in the memo. This guidance is helpful to 403(b) plan sponsors and consistent with missing participant procedures that the IRS set forth for qualified plan sponsors last year. For those 403(b) plans that are governed…
On Jan. 5, 2018, the Department of Labor (DOL) issued a proposed rule that would make it easier for small businesses to join together to purchase health insurance. This is not a completely new concept. Unrelated small employers can join together to purchase health insurance today. Under current guidance, however, these types of plans are generally not considered a single ERISA plan. The result is that each participating employer in one of these plans is…
While the fiduciary rule has received most of the attention in the world of ERISA as of late, a lesser known regulation that was finalized late last year also may require action by plan sponsors. This regulation , issued by the Department of Labor (DOL) in December 2016, requires applicable plans to satisfy additional procedural and notice requirements for disability claims. As a result, disability claims procedures will become more aligned with the claims and…
Today (April 7, 2017), the Department of Labor (DOL) published in the Federal Register a final rule delaying the new ERISA fiduciary rule until June 9, 2017. Everyone expected a comprehensive 60-day delay to the rule, including the related Best Interest Contract Exemption (BICE) and other prohibited transaction exemptions (PTE). But, in welcome news to many, the rule also provided a significant transition period until 2018 for the more onerous requirements of the BICE, PTE…
While it took longer than many expected, the Department of Labor (DOL) issued a proposed rule that would provide a 60-day delay to the application of the new fiduciary rule and related prohibited transaction exemptions. As we reported in our previous blog, the rule was set to impose new fiduciary obligations on those who provide participant investment advice, which would have a trickle-down effect on the sponsors of qualified retirement plans in which those…