The Benefit of Benefits

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The IRS issued Notice 2018-97 (Notice) on December 7, 2018, providing some much needed guidance on interpreting Internal Revenue Code (Code) section 83(i) for qualified equity grants. Section 83(i) was added to the Code as part of the 2017 Tax Cuts and Jobs Act effective at the beginning of this year and permits employees granted stock options or Restricted Stock Units (RSUs) under a “qualified equity grant” to elect to defer the income tax resulting…
The U.S. Department of Labor’s final disability claims procedures became effective for disability claims filed after April 1, 2018.  See No Fooling: New Disability Claims Procedures are Effective April 1, 2018. Any qualified or nonqualified retirement or deferred compensation plan governed by ERISA (including top hat plans that only cover a select group of management or highly compensated employees) that conditions a benefit on a determination of disability by the plan administrator must include…
Last February I blogged about new Section 83(i) of the Internal Revenue Code that was added by the 2017 tax reform legislation and provides for up to a five-year deferral of the income tax consequences to an employee when exercising a Non-Statutory Stock Option or settling a Restricted Stock Unit in stock.  See New Section 83(i) Provides a New Tool for Allowing Employees to Participate in the Sale of their Private Corporation-Employer. That article…
Last week I reported that the California Secure Choice Retirement Saving Investment Board (Board) posted a Notice of Proposed Emergency Regulation Action twice, once on October 9 and again on October 12 because the October 9 proposed regulations were changed. See CalSavers Files Emergency Proposed Regulations Twice. On October 30, the Board issued yet another notice withdrawing the October 12 proposed regulations, because they were changed yet again, and issuing a new notice of…
On October 9, 2018, the California Secure Choice Retirement Savings Investment Board (Board) posted a Notice of Proposed Emergency Action to issue proposed regulations regarding CalSavers, the California mandated payroll deduction IRA program expected to become effective early next year.  However, on October 12, 2018, the Board filed another notice because it modified the proposed regulations in the October 9th notice. These proposed regulations replaced those that were initially noticed on March 5, 2018 but…
On August 31, 2018, President Trump signed an Executive Order directing the Labor Department to consider issuing regulations and guidance that would make it easier for businesses to join together in Association Retirement Plans also known as open multiple employer plans (MEPs).  It is believed that the Labor Department will act to remove the commonality requirement of existing regulations which requires that all employers participating in the MEP must share some commonality such as being…
In a new private letter ruling (PLR 201833012) released August 17, 2018, the IRS approved amendments to a 401(k) plan that effectively permit the employer to treat an employee’s student loan repayments similar to elective contributions under the plan by making a nonelective employer contribution equal to the matching contribution the employer would have made, if instead of making the loan repayments, the employee made elective contributions of the same amount.  The plan at issue…
Last month,  I reported on how California’s mandated payroll deduction IRA program known as CalSavers is being challenged in court as preempted by ERISA. CalSavers is California’s attempt to address the fact that many Americans do not have the opportunity to save for retirement at their workplace because their employer does not offer a retirement plan.  The California Treasurer’s Office reports that 7.5 million Californians work for employers who don’t offer a plan.  Other states…
For the past year or so, I have been speaking and writing about the California Secure Choice Law authorizing the State’s mandatory payroll deduction IRA program named CalSavers (“Program”).  When implemented, the Program will require private employers who don’t otherwise offer employees a retirement plan to automatically enroll their employees and withhold and contribute to the Program a percentage of the employees’ pay to be invested in an individual retirement account for the employee.  Employees…
The California Supreme Court recently decided an important decision on the issue of when a worker is properly classified as an independent contractor or employee for purposes of California wage orders.  On April 30, the Court decided in Dynamex Operations West, Inc. v. Superior Court, that drivers for a delivery service were employees “for purposes of California wage orders, which impose obligations relating to the minimum wages, maximum hours, and a limited number of very…