To the great relief of many plan sponsors, administrators, recordkeepers, and payroll vendors, the IRS issued highly anticipated relief regarding the mandatory "Rothification" of catch-up contributions.
A recent news release indicates that the US Department of Labor (DOL) has an investigatory initiative focused on the issue of “insurability” under life insurance benefits. This issue arises when insurance premiums are collected for ERISA insurance benefits but there is a failure to complete the necessary process of confirming evidence of insurability. The result is that the employee believes they have insurance coverage, but coverage is not available when sought because the evidence of insurability was never completed. The DOL views such failures as a potential breach of ERISA’s fiduciary duties by either the insurer, the employer, or both.
The Internal Revenue Service (IRS) expanded its individually designed determination letter program to include 403(b) retirement plans in November 2022, before which time 403(b) plan sponsors did not have the ability to file for a determination letter, and thus could not receive assurance from the IRS that the plan’s written terms complied with Internal Revenue Code (Code) Section 403(b).
The Internal Revenue Service (IRS) released Notice 2023-43 (Notice) on May 25, which provided guidance regarding the expansion of the IRS’s Employee Plans Compliance Resolution System (EPCRS) mandated by Section 305 of the SECURE 2.0 Act of 2022 (SECURE 2.0).
The SECURE 2.0 Act of 2022 (SECURE 2.0) made a number of changes in law intended to simplify the administration of retirement plans, including through the expansion of the Internal Revenue Service (IRS) Employee Plans Compliance Resolution System (EPCRS), which is currently set forth in Revenue Procedure 2021-30. EPCRS furthers the goal of ensuring that tax-qualified retirement plans operate in compliance with the Internal Revenue Code of 1986, as amended (the Code), by providing a mechanism for sponsors and administrators of those plans to correct certain documentary and operational errors that may arise in plan administration.
As the US Department of Labor (DOL) continues its investigation of retirement plans and their fiduciaries, we outline nine issues that the DOL has focused on in those investigations as a guide for plan fiduciaries in navigating fiduciary compliance, including top-of-mind areas such as cybersecurity and data privacy and ESG investing.
Based on new ERISA disclosure rules, now is a good time to review the compensation paid to your health plan’s consultant and broker. ERISA Section 408(b)(2)(B) requires brokers and consultants expecting $1,000 or more in direct and indirect compensation for services provided to group health plans to make detailed disclosures to the “responsible plan fiduciary” regarding their services and compensation.
One of the most common questions we receive from buy-side clients in mergers and acquisitions (M&A) is how to handle the 401(k) plan of the target company in the context of a stock purchase acquisition: Should they require the target to terminate the 401(k) plan prior to closing? Or should they keep the 401(k) plan in place for a short period of time following closing and then merge it into their own existing 401(k) plan?
The US Department of Labor (DOL) released an extensive regulatory agenda in January 2023 laying out the agency’s priorities for the year. The DOL has faced scrutiny from Congress this legislative session, demonstrated most recently by the congressional repeal of the DOL’s so-called “ESG Rule” in early March. President Joseph Biden’s veto of that repeal on March 20, 2023, rescued the ESG Rule from the congressional chopping block. Luckily for the DOL, however, many of the other 70-plus priority items for 2023 appear to be less controversial. Below we summarize a few of those items that have direct relevance to Employee Retirement Income Security Act (ERISA) regulated retirement plan sponsors.