The US Department of Labor has taken the position that certain indemnification clauses are void against public policy under Section 410 of ERISA. This policy has been adopted by private plaintiff classes; as evident from a recent settlement, a policy that voids indemnity provisions can limit defense budgets, make settlements more likely and potentially create dangerous precedent for ESOPs. Access full article.
No Stone Unturned: Locating Missing Participants under the PBGC’s Expanded Program for Terminated Plans
The PBGC’s missing participants program, which previously applied only to single-employer defined benefit pension plans, has been expanded to defined contribution plans, multiemployer defined benefit plans and small professional service defined benefit plans that end on or after January 1, 2018. The revised program provides a helpful alternative for plan administrators of terminating defined contribution plans, and also includes welcome clarifications that enhance the program available to defined benefit pension plans. Access the full article.
The ESOP industry is paying close attention to a Tenth Circuit appeal that will address the deferral of corporate deductions for certain accrued expenses payable to ESOP-participating employees. This appeal, which pertains to an underlying tax court opinion, Petersen v. Commissioner of Internal Revenue (decided June 13, 2017), is critically important to certain ESOP-owned S corporations for tax planning and other purposes. Internal Revenue Code (IRC) Section 267(a)(2) defers deductions for expenses paid by a taxpayer to a “related person” until the payments are includible in the related person’s gross income. IRC Section 267(c) sets out constructive ownership rules for purposes of determining if certain persons are “related persons.” Section 267(c) provides that stock owned, directly or indirectly, by a trust shall be considered as being owned proportionately by its shareholders. In Peterson v. Commissioner, the US Tax Court addressed whether an ESOP trust is...
On February 9, 2018, President Trump signed a bipartisan budget deal into law, effectively extending federal funding through March 23, 2018. The act includes multiple provisions affecting employee benefit plans, including relaxed hardship withdrawal rules and relief for individuals affected by the California wildfires. Continue Reading.
McDermott's Benefits Emerging Leaders Working Group provides benefit professionals with tools to better serve employees in an ever-changing and evolving benefits landscape. Presentations will tackle the latest benefits hot topics and best practice solutions, supplemented with important networking opportunities aimed to connect tomorrow's benefit leaders with a broad network of professionals. Planned agenda topics include: What's Happening in Washington? Lessons from an RFP Lunch Discussion: Changing Behavior through Benefits Communication Global Benefit Plans Moderated Group Discussion (including Voluntary Benefits) Register Now.
The Bipartisan Budget Act helped avoid another government shutdown, but did it cause problems for your benefit plans? Sarah L. Engle and D. Finn Pressly will discuss everything you need to know about the new legislation, including changes to hardship distributions and new wildfire relief. The panel will also bring you up to speed on other key developments in the employee benefits sphere over the last month. Register now.
The Department of Labor announced increased penalties for employee benefit plans under ERISA. The increases generally apply to penalties that involve employee benefit reporting and disclosure failings if the penalty is assessed after January 2, 2018, and if the violation occurred after November 2, 2015. We’ve compiled a resource outlining the ERISA penalty amounts assessed for violations on or before January 2, 2018, and those amounts assessed after January 2. Continue Reading.
After some speculation about a delay in implementation of the final rules on claims adjudication of disability claims under welfare and retirement plans (the Final Rule), the US Department of Labor (DOL) confirmed that the Final Rule will be applicable beginning April 1, 2018. McDermott’s article detailing the new requirements in the Final Rule can be found here. A disability welfare or retirement benefit claim, as well as claims under certain executive compensation arrangements, severance plans and other payment plans subject to ERISA’s claims procedures, will be subject to the Final Rule if the benefit is conditioned upon a claimant’s disability, and the claims adjudicator must make a determination of disability in order to decide the claim. However, if a plan links the finding of disability to a determination made by a party other than the plan (e.g., a finding made under the employer’s long-term disability plan or a determination of disability made by the...
The Tax Cuts and Jobs Act of 2017 was signed into law last year. From biking benefits to leave tax credits, we’ll discuss the employee benefit provisions and strategies for compliance, as well as opportunities your company won't want to miss! Join the McDermott team on Friday, February 2 for a discussion of how the new law impacts fringe benefit plans, executive compensation and retirement plans. Friday, February 2, 2018 10:00 – 10:45 am PST 11:00 – 11:45 am MST 12:00 – 12:45 pm CST 1:00 – 1:45 pm EST Register Here.
On Saturday, the Senate passed its version of the Tax Cuts and Jobs Act. The process of reconciling the House and Senate versions of the bill has already begun in earnest. Currently, the retirement-plan-related changes included in each version of the bill still differ in many respects, and it is unclear which (if any) changes will be included in the final bill. As a result, with only a few weeks left until the holiday recess, a clear picture of the potential impact of tax reform on retirement plan sponsors has yet to emerge. Continue Reading.