ML BeneBits

The Internal Revenue Service (IRS) provided a late summer gift to retirement plan sponsors by extending some year-end plan amendment deadlines. In Notice 2022-33, the IRS extended the remedial amendment deadlines for certain Setting Every Community Up for Retirement Enhancement Act (SECURE Act) provisions (including the MINERS Act provision lowering in-service retirement age for pension plans from age 62 to age 59½) and Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provisions. This extension is particularly helpful for retirement plan sponsors hoping for additional guidance before amending plans to reflect certain SECURE Act changes (for example, the mandatory long-term part-time employee participation provisions and the new age 72 required minimum distribution rules).

The Setting Every Community Up for Retirement Enhancement Act of 2019 (the SECURE Act) made sweeping changes affecting sponsors of defined contribution and defined benefit plans, retirement plan service providers, and providers of individual retirement accounts and annuities (IRAs). While many believed the SECURE Act went a long way toward expanding retirement savings opportunities and promoting retirement income security, some believed it could have gone further. There are currently several proposed retirement acts pending reconciliation in Congress.

This is the fourth and final post in a series aimed at getting the HR, benefits, and executive compensation functions of your organization ready for a potential sale or similar corporate transaction. This post addresses considerations for your organization’s health and welfare plans in a potential sale.

Seeking shareholder approval of an equity compensation plan has become a multi-step, often complex process. Gone are the days when management simply would discuss a share increase with the board of directors, and the company would include a brief discussion of the proposal in the proxy.

In a prior post, we discussed the first eight of 15 recommended steps to consider when submitting an equity plan for shareholder approval. In this post, we discuss the final steps. While we know each situation is different, we hope you find these 15 steps a useful guide to consider when submitting an equity plan for shareholder approval.

This is the third in a series of blog posts aimed at getting the human resources, benefits, and executive compensation functions of your organization ready for a potential sale or similar corporate transaction. Part I provided general guidelines and suggestions on how to get organized. Part II addressed change of control documents that may be affected by a potential sale, as well as the treatment of outstanding equity compensation. This post addresses the impact of a sale on your organization’s retirement plans.

As the US Department of Labor (DOL) continues to contemplate the role of environmental, social, and governance (ESG) considerations in ERISA plan investing, ESG issues surrounding retirement plans are cropping up in another way: as a target for proxy vote proposals that seek to require companies to evaluate their ESG commitments in retirement plans.

Many traditional defined benefit plans, such as final average pay plans, offer a lump sum distribution as an optional form of benefit. The amount of the lump sum distribution is sensitive to the applicable interest rate (calculated under Internal Revenue Code Section 417(e)) and varies inversely with the rate level. Higher interest rates result in smaller lump sums, and lower rates result in larger lump sums. Plans must update the applicable interest rate on a monthly, quarterly, or annual basis. With interest rates increasing rapidly, upcoming changes to the applicable interest rate may cause lump sum payments to decrease. In some cases, the decrease may be significant.

The US Securities and Exchange Commission (SEC) recently approved a proposed environmental, social, and governance (ESG) rulemaking for investment advisers and funds. This proposed rule and form amendments will impact SEC-regulated asset managers, but may also be of interest to investors, including ERISA plans, that consider ESG factors and/or invest in ESG funds.

The Internal Revenue Service (IRS) issued Notice 2022-24 on April 29 to provide the inflation-adjusted amounts for health savings accounts (HSAs) in calendar year 2023.