Retirement Plans Archives | Page 37 of 71

PBGC Releases Revised Proposed Regulations Addressing Reportable Event Requirements under ERISA

by McDermott Will & Schulte | Jun 18, 2013 | Retirement Plans

by Paul J. Compernolle, Ashley McCarthy and Maureen O’Brien

Section 4043 of the Employee Retirement Income Security Act of 1974 (ERISA) requires pension plan sponsors to report a variety of corporate and plan events to the Pension Benefit Guaranty Corporation (PBGC). In November 2009, the PBGC proposed regulations that would have eliminated most of the reporting waivers available under current law and drastically increased the reporting requirements applicable to pension plans. Plan sponsors and practitioners widely criticized the 2009 proposed regulations as overly burdensome. Citing both this feedback and a 2010 executive order directing agencies to review existing regulations to identify those that could be made less onerous, the PBGC recently issued revised proposed regulations (the Proposed Regulations) that reinstate many of the exemptions that would have been eliminated under the 2009 proposed regulations. The Proposed Regulations would also replace the current funding-based exemption scheme with an approach based on the financial soundness of pension plans and their sponsors.

Employers Should Review How Plan Documents Define Spouse in Light of Recent Benefits Litigation

by McDermott Will & Emery | May 14, 2013 | Health and Welfare Plans, Retirement Plans

by Lisa K. Loesel, Todd A. Solomon, Jacob Mattinson and Brian J. Tiemann

Two recent cases challenging benefit eligibility for same-sex spouses highlight the need for employer-sponsored retirement and welfare plans to clearly define "spouse" for eligibility purposes. Employers may want to review their plan documents to determine whether plan amendments are needed to clarify benefit eligibility for same-sex spouses in light of the upcoming ruling by the Supreme Court of the United States on the constitutionality of the federal Defense of Marriage Act.

To read the full article, click here.

Employee Benefits Issues in Spin-Offs

by McDermott Will & Schulte | May 9, 2013 | Employment, Executive Compensation, Health and Welfare Plans, Retirement Plans

by Joseph S. Adams and Jeffrey M. Holdvogt

In a corporate spin-off, both the existing company and the new company (spinco) must consider the implications for employees, employee benefit plans and executive compensation arrangements. Benefit plans and compensation arrangements can represent significant liabilities and responsibilities, and typically are expressly allocated in an employee matters agreement (EMA). This article provides a brief summary of some of the key employee benefit plans issues to consider in a spin-off.

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DOL Releases Informal Guidance Addressing Fiduciary Responsibilities With Respect to Target Date Funds

by McDermott Will & Emery | May 7, 2013 | Retirement Plans

by Joseph S. Adams, Anne S. Becker, Karen A. Simonsen and Ashley McCarthy

Recent U.S. Department of Labor (DOL) guidance underscores the need for plan fiduciaries to rigorously examine and monitor target date fund (TDFs), and potentially explore the use of custom or non-proprietary TDFs.

To read the full article, click here.

IRS Issues Procedures for Securing Favorable Opinions on Pre-Approved 403(b) Programs

by McDermott Will & Emery | Apr 25, 2013 | Retirement Plans

by Mary K. Samsa, Todd A. Solomon and Joseph K. Urwitz

The Internal Revenue Service (IRS) recently released a revenue procedure establishing a new program for the pre-approval of 403(b) plans. The program opens June 28, 2013, and the IRS will begin accepting applications for opinion and advisory letters on whether the form of prototype plans and volume submitter plans meet the requirements of Code Section 403(b).

To read the full article, click here.

Company Owners Personally Liable for $3.1 Million Withdrawal Liability Assessment — Owners’ Lease of Commercial Property to Company Constituted “Trade or Business”

by McDermott Will & Schulte | Apr 22, 2013 | Retirement Plans

by Jonathan J. Boyles, Paul J. Compernolle and David Diaz

The U.S. Court of Appeals for the Seventh Circuit ruled that owners can be personally liable for multiemployer withdrawal liability where the owner leases property to its own closely held corporation. The decision highlights the dangers of related-party transactions, failing to observe business formalities and holding property personally.

To read the full article, click here.

DOL Issues Guidance on MAP-21 Annual Funding Notice Requirements

by McDermott Will & Emery | Apr 2, 2013 | Retirement Plans

by Anne S. Becker, Stephen Pavlick and Kary Crassweller

The U.S. Department of Labor (DOL) recently issued guidance on the new disclosure requirements for single-employer defined benefit plans under the Moving Ahead for Progress in the 21st Century Act (MAP-21). Plan administrators of single-employer defined benefit plans that meet certain requirements must disclose the effect of MAP-21 on the plan’s funding and the plan sponsor’s minimum required contribution to the plan. The new guidance sets forth technical questions and answers, and includes a model supplement to the model annual funding notice that may be used to comply with the new disclosure requirements. Because calendar year plans must provide the required disclosures by April 30, 2013, plan sponsors should ensure their plans’ annual funding notices incorporate the most recent guidance from the DOL.

To read the full article, click here.

What You Need to Know About FATCA’s Impact on Non-U.S. Retirement Plans

by McDermott Will & Schulte | Mar 26, 2013 | Retirement Plans

by Andrew C. Liazos, Todd A. Solomon and Kary Crassweller

The Internal Revenue Service recently published final regulations under the Foreign Account Tax Compliance Act (FATCA), which are effective immediately. FATCA imposes significant reporting obligations on both non-U.S. foreign financial institutions (FFIs) and U.S. taxpayers holding foreign financial accounts. A non-U.S. retirement plan may be subject to FATCA reporting responsibilities as an FFI unless there is an available exemption. Failure to comply with applicable reporting requirements may trigger substantial withholding taxes and penalties. This On The Subject summarizes what you need to know about FATCA for both plans and participants.

To read the full article, click here.

IRS Issues 403(b) Plan Fix-It Guide

by McDermott Will & Schulte | Mar 14, 2013 | Retirement Plans

by Mary K. Samsa, Todd A. Solomon and Joseph K. Urwitz

On February 21, 2013, the Internal Revenue Service (IRS) added to its “self-help” resources a new “403(b) Plan Fix-It Guide” to provide guidance more specifically directed at 403(b) plan sponsors that identify qualification or operational plan failures under their 403(b) plans. Additionally, the IRS issued as a companion piece a booklet entitled “Voluntary Correction Program Submission Kit,” which provides more detailed directions to 403(b) plan sponsors on how to complete and file a correction filing with the IRS specifically relating to the failure to adopt a written 403(b) plan document.

This new “fix-it” tool addresses 10 potential errors (likely the most common 403(b) plan errors), including, but not limited to, ineligible organizations offering 403(b) plans, failure to adopt a written plan document as required by the final 403(b) regulations, violation of the universal availability rule, failure to appropriately limit elective deferrals and failure to follow the underlying terms of the plan document. Although these types of failures are not necessarily new (i.e., they could have occurred in prior years), the IRS is slowly bringing 403(b) plans under more scrutiny as the dollars being contributed to these types of plans continue to increase. The IRS is developing more expertise in this area and is training more agents to be able to identify the particular differences between 401(k) plans and 403(b) plans, and the specific nuances and legal requirements of operating 403(b) plans. Since the 403(b) regulations were issued in 2007, this is the first step in which the IRS is taking a more active role to ensure compliance under these types of plans.

Revenue Procedures 2013-12 (Employee Plans Compliance Resolution System, or EPCRS) may be used with respect to any 403(b) plan corrections going forward. It incorporates in greater detail the “403(b) Plan Fix-It Guide.” Although prior EPCRS guidance such as Revenue Procedure 2008-50 was often applied to 403(b) plans by analogy for correcting errors, new Revenue Procedure 2013-12 is drafted to be directly applicable to 403(b) plans. Consequently, given the IRS movement toward greater scrutiny of 403(b) plans, tax-exempt organizations that have not recently conducted any type of internal compliance review are encouraged to review, at a minimum, the mistakes highlighted in the “403(b) Plan Fix-It Guide” to determine whether greater analysis is required with respect the compliance and operation of their 403(b) plans.

IRS Releases Draft Revised Form 5300 and Instructions

by McDermott Will & Emery | Feb 26, 2013 | Employment, Retirement Plans

by Anne S. Becker, Natalie M. Nathanson and Brian A. Benko

The Internal Revenue Service (IRS) recently released a draft revised Form 5300 and its instructions. Form 5300, the Application for Determination for Employee Benefit Plan, is generally used to request an IRS determination that an individually designed retirement plan meets the requirements for tax qualification under Sections 401(a) and 501(a) of the Internal Revenue Code. Because the draft revised Form 5300 contains numerous changes, plan sponsors and their advisors will need to carefully review the revised instructions, once they are finalized, in anticipation of submitting a Form 5300. Although the IRS did not propose an effective date for the revised Form 5300, it could replace the current version effective for determination letter submissions filed as early as February 1, 2013 (i.e., effective for Cycle C filers).

To read the full article, click here.

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