Through a series of recent settlements, the US Department of Labor has outlined the process steps fiduciaries should follow in connection with a transaction involving a purchase from, or sale to, an employee stock ownership plan.
The US Department of the Treasury recently issued guidance that retirement plan sponsors should consider as part of their obligation to take reasonable steps to locate missing participants. Specifically, the Treasury issued a memorandum which sets forth guidelines that prohibit auditors from challenging qualified plans as failing to satisfy the required minimum distribution standards under Internal Revenue Code (IRC) Section 401(a)(9) if the plan has fulfilled all of the following with respect to participants that cannot be located:
The Treasury guidance is similar to, but also expands upon, prior guidance provided by the US Department of Labor, which addresses locating missing participants for terminated retirement plans.
Locating missing participants and beneficiaries can be challenging for plan sponsors. Many plan sponsors find that they are unable to locate participants who left employment many years prior and, as a result, are unable to make required minimum distributions. Both the IRS and Department of Labor have stepped up their enforcement of these requirements in recent years. In particular, the Department of Labor has made locating missing participants an enforcement priority for plan audits.
Both the House and Senate versions of tax reform propose significant changes that may reduce or eliminate the tax benefits of many popular employer-provided fringe benefits, such as dependent care assistance programs, on-premises gyms and bicycle commuting expense reimbursements. In addition, many common deductions for work-related activities—including certain meal and entertainment expenses—may see sweeping changes.
After spending a year on the brink of repeal, the Affordable Care Act is alive and well. ACA reporting is just around the corner, so join McDermott partners Judith Wethall and Finn Pressly for a refresher course on everything you need to know about the Forms 1094-C and 1095-C. The 45-minute conversation will also include up-to-the-minute updates on the government’s ACA enforcement activity, including a review of the IRS’s procedures for appealing employer mandate penalty assessments.
Date
Friday December 1, 2017
Time
12:00 pm – 12:45 pm CDT
1:00 pm – 1:45 pm EDT
Mark your calendars for the first Friday of every month! McDermott’s Employee Benefits Group will be delivering timely topics in our “Fridays With Benefits” monthly webinar series.
On Tuesday night, Senate Finance Committee Chairman Orrin Hatch (R-UT) released a new modified mark of the Senate version of the Tax Cuts and Jobs Act that modifies provisions related to Internal Revenue Code (Code) Sections 409A and 162(m).
The Chairman’s modification adds a transition rule for the elimination of employer deductions for payments over $1 million to certain executives under Code Section 162(m). The transition rule provides that elimination of the employer deduction does not apply to payments under a written and binding contract in effect on November 2, 2017, provided that the contract was not materially modified after that date.
In addition, the Chairman’s modification eliminates the provision that would have replaced Code Section 409A with a new Section 409B, which would have required payments under non-qualified deferred compensation plans to be taxed when they vested. Currently, Section 409A allows employees to defer taxation on such fully-vested payments, provided they meet other requirements under Section 409A. The proposed replacement of 409A with 409B would have had significant tax implications for those employees with non-qualified deferred compensation plans.
The IRS has taken actions indicating that employer mandate penalties under the ACA are about to be enforced. The recently updated Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act includes the section, “Making an Employer Shared Responsibility Payment,” which expands specifically upon the soon-to-be-issued Letter 226J and what that will include. Continue Reading.
The Disaster Tax Relief and Airport and Airway Extension Act of 2017 provides a new favorable tax credit for eligible employers affected by recent hurricanes, as well as expanded charitable deductions and tax credits for certain taxpayers. Continue Reading.
The new Disaster Tax Relief and Airport and Airway Extension Act of 2017 provides additional relief and flexibility for retirement plan participants impacted by recent hurricanes, including relaxed rules for plan distributions, withdrawals and loans.
The US House of Representatives Committee on Ways and Means proposed Tax Cuts and Jobs Act intends to reduce corporate and individual tax rates. To pay for the proposed changes, the House Tax Bill would, if enacted, negatively impact long-standing current executive compensation practices.
At the 36th Annual ISCEBS Symposium, Todd Solomon presented best practices for plan fiduciaries to avoid 401(k) plan and 403(b) plan class action lawsuits. Todd discussed fiduciary responsibilities under ERISA as well as potential consequences of breaching fiduciary responsibilities. He highlighted notable cases brought against plan fiduciaries, including those that allege excess plan fees. Todd discussed the need for rigorous monitoring and documentation of the review process.
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