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On Friday, the IRS released a private letter ruling (PLR) which will help clear the way for employers to provide a new type of student loan repayment benefit as part of their 401(k) plans. By issuing the PLR, the IRS gave its blessing to an employer-provided student loan repayment benefit offered through an employer’s 401(k) plan. Historically, many plan sponsors had questioned whether such an approach would be permissible under IRS rules. As a result,…
The Internal Revenue Service (IRS) recently released “Issue Snapshots” on a number of topics related to tax-qualified retirement plans, including both pension and savings plans. Historically, the snapshots have explained new(er) laws and guidance, and have often included audit tips for IRS examiners. As a result, although the IRS has indicated that the snapshots are not official pronouncements of law or directives, the snapshots provide helpful insight into issues that the IRS thinks…
The Massachusetts legislature’s recent approval of a comprehensive non-competition reform bill includes significant restrictions for employers seeking to impose non-compete obligations on Massachusetts workers. The Massachusetts Noncompetition Agreement Act will become effective on October 1, 2018, leaving little time for employers to consider what actions to take to protect their business interests. Access the full article.
The Internal Revenue Service recently released final regulations confirming that employers can use plan forfeitures to fund qualified non-elective contributions (QNECs), qualified matching contributions (QMACs) and safe harbor contributions. As explained in our earlier On the Subject discussing this topic, IRS regulations historically provided that QNECs, QMACs and certain safe harbor contributions had to be 100 percent vested at the time the amounts were contributed to an employer’s plan. The IRS interpreted this requirement to…
While momentum may be building for a single-payer health care system in New York, such a dramatic shift in the way health care is financed will have to overcome a number of significant obstacles. With ERISA preemption being one of those hurdles, Andrew Liazos comments, “There will be a challenge from somewhere. I don’t know who will lead the challenge, but I don’t think employer groups will just sit by idly.” Access the full article.
During the previous quarter, the SEC acted to expand the number of companies that may rely on the “smaller reporting company” scaled disclosure regime and Congress directed revisions to the Regulation A+ and Rule 701 exemptions. The SEC also took enforcement action on a major cybersecurity breach, reinforcing its recent interpretive guidance on the subject. The director of the SEC Division of Corporation Finance also spoke on how blockchain assets may or may not constitute…
ERISA broadly preempts state laws that “relate to” ERISA-governed employee benefit plans to ensure a uniform federal regulatory scheme and to relieve ERISA plans from the burdens of satisfying a patchwork of state laws. Recently, however, several states have enacted legislation designed to regulate the prices that pharmacy benefit managers, as third-party administrators for ERISA-governed plans, agree to reimburse pharmacies for dispensing prescription drugs to ERISA plan members. These regulations run afoul of ERISA, as…
Kevin Connelly said unions will face an adjustment period as they seek to implement more creative methods of trying to retain dues-paying members. “I wouldn’t underestimate the unions. If someone wants to say this is the end of the day for public-sector unions—nope, not true,” he said. “There will be consequences, but I think the unions that operate in that sector will be clever enough to make the appropriate adjustments.” Access the full article. Originally…
A federal judge in Rhode Island recently permitted several claims against Brown University to proceed in a lawsuit alleging that the university and its fiduciaries breached their fiduciary duties under the Employee Retirement Income Security Act of 1974, as amended (ERISA), by mismanaging Brown’s defined contribution plans. This decision follows the recent decision in a similar class action lawsuit against Northwestern University (see blog post here) in which a federal judge granted Northwestern a…
Andrew Liazos said that it makes sense for companies to consider Q-SERPs in response to the end of the performance-based pay deduction, but he questioned whether the plans would offer much “bang for your buck.” “You first have to deal with the obvious time and effort you have to spend to show it’s not discriminatory, and then take a certain level of risk that the rules aren’t going to change,” he said. Access the full