The US Department of Labor (DOL) released its 2020 statistics on ERISA enforcement activities on October 27, affirming that the agency’s investigations remain robust. In sharing the statistics, the DOL not only boasted that it had restored $3.1 billion to employee benefit plans, participants, and beneficiaries, but also that this amount is the “most ever” that the agency has recovered in one year.
Selected TopicRetirement Plan Design and Administration
As we noted in a post last year at this time, pension plans that are not fully funded for PBGC purposes have two parts to their PBGC premium. One part is a flat rate premium of $83 per participant in 2020 ($86 for 2021, as just announced by the PBGC). The other is a variable rate premium that looks to the value of the plan’s “unfunded vested benefits,” which is the excess, if any, of the plan’s Premium Funding Target over the fair market value of plan assets.
Recent LawFlash publications include IRS Notice 2020-68 Provides Secure Act And Miners Act Guidance and SECURE Act: IRS Sets Amendment Deadline For IRA Providers and Addresses Other IRA Issues.
Congratulations to Elizabeth (Liz) Goldberg and Erin Randolph-Williams on their election to the Morgan Lewis partnership in our employee benefits and executive compensation practice! Effective today, Liz (resident in Pittsburgh) and Erin (resident in Philadelphia) will join 23 other newly elected partners from 10 offices and eight practices.
The US Department of Labor (DOL) published in the September 18 Federal Register its Interim Final Rule (Rule) to implement “lifetime income illustrations,” which must be provided to defined contribution plan participants pursuant to the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act).
The Pension Benefit Guaranty Corporation (PBGC) published a final rule (Final Rule) on September 9 providing that effective January 1, 2021, it will use the interest and mortality assumptions under Internal Revenue Code (Code) Section 417(e)(3) when determining de minimis lump sum benefits for single-employer defined benefit plans undergoing distress or involuntary terminations. The Final Rule does not apply to multiemployer plans.
On August 18, the US Department of Labor issued an Interim Final Rule regarding the parameters and disclosures required to implement “lifetime income illustrations,” which must be provided to defined contribution plan participants pursuant to the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act).
The IRS issued proposed regulations and new frequently asked questions regarding the extension of the normal 60-day rollover period to roll over a qualified plan loan offset (QPLO), which was provided for under the Tax Cuts and Jobs Act of 2017 (TCJA). While the proposed regulations will primarily affect the recordkeepers of qualified plans (which will need to administer the extension), plan sponsors should be aware of the proposed regulations and discuss compliance with their recordkeepers and other paying agents for their qualified retirement plans that allow loans.
For our clients, we have formed a multidisciplinary Coronavirus COVID-19 Task Force to help guide you through the broad scope of legal issues brought on by this public health challenge. Find resources on how to cope with the post-pandemic reality on our NOW. NORMAL. NEXT. page and our COVID-19 page to help keep you on top of developments as they unfold.
IRS Notice 2020-51, released last week, provides additional guidance on the waiver in 2020 of required minimum distributions (RMDs) from defined contribution retirement plans and IRAs, and the interaction of this waiver with Section 114 of the SECURE Act. The SECURE Act changed the required beginning date for an employee or IRA owner to begin taking required minimum distributions to April 1 of the calendar year following the calendar year in which the individual attains age 72 (rather than April 1 of the calendar year following the calendar year in which the individual attains age 70½), for individuals who attain age 70½ after December 31, 2019.