Benefits Law Update

The Employee Benefits and Executive Compensation Blog

Members of the Employee Benefits & Executive Compensation Group provide timely updates and commentary on developments affecting employee benefit plans and executive compensation arrangements. The blog is edited by Eric Altholz and Suzanne Meeker, with guest posts from other members of the group.

The Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”) includes a provision that changed the rollover rules for certain plan loan offset distributions and that may not be well known to retirement plan sponsors and participants. Money purchase, profit sharing, 401(k) and 403(b) plans may make loans available to plan participants.  If a participant with an outstanding loan terminates employment and fails to repay the loan in accordance with its terms (including repayment…
Newly published Revenue Procedure 2019-19 modifies and supersedes prior IRS guidance regarding the Employee Plans Compliance Resolution System (EPCRS) 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…
Deferred compensation payments are due to one of your former executives, but the former executive is nowhere to be found. You know that the IRS has strict timing rules for payments subject to Code Section 409A (but maybe not as strict as you think). The end of the tax year is approaching fast. What to do? Missing participants can be a problem for benefit plan sponsors in a variety of contexts. Sponsors of qualified…
IRS Notice 2019-09 provides guidance intended to help “applicable tax-exempt employers” determine whether compensation paid to their most highly compensated employees will be subject to the 21 percent excise tax imposed under Code Section 4960.  Notice 2019-09 is indeed helpful to those of us who have to interpret the provisions of Code Section 4960.  But tax-exempt employers subject to Code Section 4960 have serious work to do in order to comply with these relatively new…
Every IRS Form 1094/1095 filing season (roughly January and February of each year), we receive questions on reporting for expatriate employees.  The most common questions: do we need to furnish a Form to expat employees working in the U.S. (sometimes called “inpats”) who are covered under a regular or expat plan, and if so which Form?  The rule is fairly straightforward: in general any employee who works in the U.S. at least 30 hours per…
Over the last decade, courts around the country have been asked to decide whether ERISA preempts state slayer statutes – state laws that prohibit a murderer from collecting benefits as the beneficiary of the victim’s estate or as the surviving spouse of the victim under an insurance policy or benefit plan.  Courts have come down on both sides of the issue – some finding that ERISA preempts the state law, others holding that the state…
After a year full of changes in law for employers, and the election of a new governor in Maine, Verrill Dana attorneys will offer insights on recent legal developments in labor and employment law and what the new year might bring during our 2019 Annual Employment Law Update. The full-day conference will take place on Thursday, January 31 at The Westin Harborview Hotel in Portland. The all-day event will begin with a panel discussion of…
This Client Advisory, originally distributed in December 2018, highlights important developments in the law governing employee benefit plans and executive compensation over the past year.  It offers insight into what these developments mean for employers and plan sponsors and previews developments we expect to see in 2019.  The following topics are covered:  Don’t Panic if the IRS Says You Owe Penalties Under the ACA Proposed HRA Rules Provide New Flexibility for Employers of All Sizes…
Last month, the Treasury Department issued highly anticipated proposed regulations governing hardship withdrawals from 401(k) plans.  The proposed regulations address recent statutory changes made to the hardship withdrawal rules under Code Section 401(k), including: permitting the withdrawal of earnings on elective deferrals in the event of a hardship; permitting the withdrawal of QNECs, QMACs, and earnings on such contributions in the event of a hardship; and providing that a distribution will not be treated as…
In today’s ever-changing and challenging 401(k) environment, plan sponsors find themselves in a new and seemingly complex environment. Regulations are becoming increasingly complicated, the number of class action lawsuits continues to rise, and employees insist on access to less expensive options with better performance, without understanding what the fees include. Retirement plan sponsors have an obligation and responsibility to reduce their fiduciary risk and improve the effectiveness of their retirement program for their participants. Joined…