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Posts Tagged ‘DOL’

Regulatory roundup

December 22nd, 2014 No comments

More retirement-related regulatory news for plan sponsors, including links to detailed information.

CBO’s releases new long-term projections for Social Security
The Congressional Budget Office (CBO) has published a new report entitled “CBO’s 2014 long-term projections for Social Security – additional information.” The CBO projects that under current law, the DI trust fund will be exhausted in fiscal year 2017, and the OASI trust fund will be exhausted in 2032. If a trust fund’s balance fell to zero and current revenues were insufficient to cover the benefits specified in law, the Social Security Administration would no longer have legal authority to pay full benefits when they were due.

To read the entire report, click here.

IRS releases changes to employee plans determination letter processing
The IRS released Announcement 2015-01, describing changes to the processing of employee plans determination letters that will take effect in 2015. These changes are being adopted as a result of a process improvement strategy designed to promote case processing efficiency.

The changes to the determination letter procedures described in this announcement will be reflected in Rev. Proc. 2015-6, which will be published in IRB 2015-1 and be effective on February 1, 2015. Rev. Proc. 2015-6 will set forth the Service’s procedures for issuing determination letters on the qualified status of employee plans.

To read the entire announcement, click here.

DOL issues information letter on MyRAs facilitated by employers
The Department of Labor (DOL) has released an information letter stating that employers facilitating retirement savings accounts known as “MyRAs” will not be establishing an ERISA-covered “employee pension benefit plan.” The DOL’s letter responds to a Treasury Department inquiry that asked whether the accounts would be covered by ERISA Title I.

The Treasury recently released a final rule on the savings bonds that are only available through the program announced by the President in January. Until the program is expanded, in order for an employee to make contributions to a myRA account, the employer must agree to forward the employee’s payroll deduction contributions. Employers would not make contributions to the myRAs and they would have no investment or other funding obligations, or have any custody or control over account assets.

To read the entire information letter, click here.

DOL releases advance copies of 2014 Form 5500 and 5500-SF
The DOL’s Employee Benefits Security Administration has updated its website with advance informational copies of the 2014 Form 5500 and 5500-SF and final copy of the 2014 Form M-1 of Form 5500.

To download Form 5500 and 5500-SF, click here.
To download Form M-1, click here.

For more information, click here.

Regulatory roundup

December 8th, 2014 No comments

More retirement-related regulatory news for plan sponsors, including links to detailed information.

House approves tax extenders bill with multiemployer pension plan provisions
On December 3, the House of Representative voted 404-17 to approve the “Achieving a Better Life Experience Act” (ABLE Act, H.R.647) which would allow for the creation of savings accounts to enable certain disabled beneficiaries to help pay for qualified expenses, effective for tax years beginning in 2015. Following the vote, the House combined the bill with the tax extenders legislation (H.R.5771) before sending it to the Senate.

Of interest to some employers are two provisions included in the ABLE Act:

• The IRS would be authorized to certify “professional employer organizations” (PEOs). Such PEOs would pay an annual fee of $1,000, satisfy certain requirements (including posting a bond to ensure they satisfy employment tax withholding and payment obligations and submitting audited financial statements), and assume sole responsibility for the customer’s employment taxes. The provision generally would be effective for wages paid by a certified PEO for services performed by an employee after 2015, and the IRS would be required to establish the PEO certification program by July 1, 2015. (The Joint Committee on Taxation estimates this provision would increase revenues by $8 million over 10 years.)

• Certain civil penalties under the tax code would be adjusted for inflation, beginning in 2015, including for failures to file a tax return or to pay tax; failures to file certain information returns, registration statements, and other statements; and failures to file correct information returns and payee statements. (The Joint Committee on Taxation estimates this provision will increase revenues by $115 million over 10 years.)

IRS extends submission deadlines
The IRS released Announcement 2014-41. This announcement extends to June 30, 2015, the deadline for submitting on-cycle applications for opinion and advisory letters for pre-approved defined benefit plans for the plans’ second six-year remedial amendment cycle. This announcement also provides a two day extension (from Saturday, January 31, 2015, to Monday, February 2, 2015) for Cycle D on-cycle submissions (primarily individually designed plans including multiemployer plans).

For more information, click here.

DOL report to Congress finds EBSA has not provided guidance and oversight of use of limited-scope audits
The Department of Labor’s Office of Inspector General (OIG) has issued its Semiannual Report to Congress on the DOL’s activities, accomplishments, and concerns for the six-month period ending September 30, 2014. During this reporting period, the Office of Inspector General (OIG) issued 19 audit and other reports that identified needed improvements in Department of Labor (DOL) programs and operations.

Of interest to employee benefit practitioners was that an audit of the Employee Benefits Security Administration’s (EBSA’s) oversight of the use of limited-scope audits for employee benefit plans found that EBSA has not provided the guidance and oversight needed to adequately protect more than $1 trillion of plan assets invested in complex trust arrangements and hard-to-value assets held and certified by custodians.

To read the entire report, click here.

Read more…

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Regulatory roundup

October 27th, 2014 No comments

More retirement-related regulatory news for plan sponsors, including links to detailed information.

IRS announces pension plan limits for 2015
The Internal Revenue Service (IRS) has announced cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2015. Many of the pension plan limitations will change for 2015 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment. However, other limitations will remain unchanged because the increase in the index did not meet the statutory thresholds that trigger their adjustment.

For additional information, click here.

IRS issues guidance on target date funds for qualified defined contribution plans
The IRS has issued Notice 2014-66, providing a special rule that enables qualified defined contribution plans to provide lifetime income by offering, as investment options, a series of target date funds (TDFs) that include deferred annuities among their assets, even if some of the TDFs within the series are available only to older participants.

This special rule provides that, if certain conditions are satisfied, a series of TDFs in a defined contribution plan is treated as a single right or feature for purposes of the nondiscrimination requirements of § 401(a)(4) of the Internal Revenue Code. This permits the TDFs to satisfy those nondiscrimination requirements as they apply to rights or features even if one or more of the TDFs considered on its own would not satisfy those requirements.

Notice 2014-66 will be published in Internal Revenue Bulletin 2014-46 on November 10, 2014.

In an accompanying letter, the U.S. Department of Labor (DOL) has confirmed that target date funds serving as default investment alternatives may include annuities among their fixed income investments. The letter also describes how ERISA fiduciary standards can be satisfied when a plan sponsor appoints an investment manager who selects the annuity contracts and annuity provider to pay the lifetime income.

To read Notice 2014-66, click here.
To read the DOL’s letter, click here.

IRS posts summary of new single distribution rule for 401(a) qualified, 403(b), and 457(b) governmental retirement plans
Beginning January 1, 2015, when participants choose to direct their retirement plan distribution to go to multiple destinations, the amounts will be treated as a single distribution for allocating pretax and after-tax basis (Notice 2014-54 and proposed rules issued September 19, 2014).

For additional information, click here.

PBGC posts 2015 premium rates
The Pension Benefit Guaranty Corporation (PBGC) posted the 2015 premium rates. The per-participant flat premium rate for plan years beginning in 2015 is $57 for single-employer plans (up from a 2014 rate of $49) and $13 for multiemployer plans (up from a 2014 rate of $12).

For plan years beginning in 2015, the variable-rate premium (VRP) for single-employer plans is $24 per $1,000 of unfunded vested benefits (UVBs), up from a 2014 rate of $14. This $10 increase was provided in the Bipartisan Budget Act of 2013. The VRP rate is also subject to indexing, but because of statutory rounding rules, indexing had no effect on the 2015 VRP rate.

For 2015, the VRP is capped at $418 times the number of participants (up from a 2014 cap of $412). Plans sponsored by small employers (generally fewer than 25 employees) may be subject to an even lower cap. Multiemployer plans do not pay a VRP.

The Bipartisan Budget Act of 2013 calls for the VRP rate to increase another $5 starting with 2016 (on top of indexing).

To view the PBGC premiums rates, click here.

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Regulatory roundup

October 7th, 2014 No comments

More retirement-related regulatory news for plan sponsors, including links to detailed information.

DOL proposed rule on electronic filing of notices for apprenticeship and training plan notices and “top hat” plan statements
The U.S. Department of Labor (DOL) has issued a proposed rule containing regulations that would revise filing procedures for apprenticeship and training plan notices and “top hat” plan statements with the Secretary of Labor to require electronic submission of these notices and statements.

The proposal would revise § 2520.104-22(c) and § 2520.104-23(c) to require Internet-based electronic filing of apprenticeship and training plan notices and top hat plan statements with the Secretary through the Employee Benefits Security Administration (EBSA) website. Once they are filed, these notices and statements would be posted on this DOL web page and be available to the public.

To read the entire proposed rule, click here.
For the DOL’s instructions on apprenticeship and training plan filing, click here.
For the DOL’s instructions on top hat filing, click here.

DOL’s Office of Inspector General issues report on limited-scope audits
The DOL’s Office of the Inspector General (OIG) has released a report, “Limited-Scope Audits Provide Inadequate Protections to Retirement Plan Participants.” The report, sent to the Assistant Secretary for EBSA, highlights changes EBSA needs to make to improve protections to plan participants for ERISA plans electing limited-scope audits for assets held and certified by trustee and custodians.

According to OIG, most plans are required by federal law to arrange for annual independent audits to ensure the integrity of retirement plan assets. However, certain plans are not required to receive a full-scope audit because of an exemption in the law, putting more than $1 trillion in complex trust arrangements and hard-to-value (HTV) assets at risk because limited-scope audits do not provide adequate assurance of assets’ existence or value.

To read the entire report, click here.

Summary of finances of selected state and local government employee retirement systems
The U.S. Census Bureau has published its quarterly survey of public pension plans. For the 100 largest public-employee pension systems in the country, cash and security holdings totaled $3,365.4 billion in the second quarter of 2014. Cash and security holdings had a quarter-to-quarter increase of 4.6%, from $3,218.2 billion last quarter, and a year-to-year increase of 14.3%, from $2,945.6 billion in the second quarter of 2013. Earnings on investments totaled $129.4 billion in the second quarter of 2014.

For more information, click here.

DOL issues private pension plan bulletin abstract of 2012 Form 5500
The DOL has issued two reports in regards to 2012 Form 5500.

Private pension plan bulletin: Abstract of 2012 Form 5500 annual reports
Private pension plan bulletin: Historical tables and graphs

IRS issues retirement newsletter for employers
This edition of Retirement News for Employers from the Internal Revenue Service (IRS) contains articles on: Starting a plan, operating a plan and correcting mistakes, and terminating plans.

To access the entire newsletter, click here.

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Regulatory roundup

August 25th, 2014 No comments

More retirement-related regulatory news for plan sponsors, including links to detailed information.

DOL issues notice for to review use of brokerage windows in participant-directed individual account retirement plans
The Employee Benefits Security Administration of the U.S. Department of Labor (DOL) has published a notice as part of its review of the use of brokerage windows (including self-directed brokerage accounts or similar arrangements) in participant-directed individual account retirement plans covered by ERISA.

The Request for Information contained in the notice will assist the DOL in determining whether, and to what extent, regulatory standards or other guidance concerning the use of brokerage windows by plans are necessary to protect participants’ retirement savings. It also will assist the DOL in preparing any analyses that it may need to perform pursuant to Executive Order 12866, the Paperwork Reduction Act, and the Regulatory Flexibility Act.

To read the entire Request for Information, click here.

IRS updated Forms 8717 and 8717-A for determination letters
The Internal Revenue Service (IRS) issued a new version of Form 8717, User Fee for Employee Plan Determination Letter Request, reflecting increases in some fees for 2014. It also updated Form 8717-A, User Fee for Employee Plan Opinion or Advisory Letter Request.

The updated user fee schedule on the form is effective for all determination letter applications postmarked after January 31. The revised form must be used after July 1, the IRS said on the form’s instructions.

To download Form 8717, click here.
To download Form 8717-A, click here.

IRS issues revenue ruling stating some Puerto Rican retirement plans qualify as group trusts

The IRS issued Revenue Ruling 2014-24 stating that certain retirement plans qualified only under Puerto Rico’s tax code may be included on the list of group trust retiree benefit plans eligible to participate in 81-100 group trusts.

Revenue Ruling 2014-24 will be published in the Internal Revenue Bulletin on September 8, 2014.

To read a copy of Revenue Ruling 2014-24, click here.

Bureau of Labor Statistics issues annual health and retirement plan provisions survey
The U.S. Bureau of Labor Statistics has issued the National Compensation Survey: Health and Retirement Plan Provisions in Private Industry in the United States, 2013. The National Compensation Survey (NCS) provides comprehensive measures of compensation cost trends, the incidence of benefits, and detailed benefit provisions. This bulletin presents estimates of the detailed provisions of employer-provided health and retirement plans in private industry in 2013.

To read the entire survey, click here.

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Regulatory roundup

March 17th, 2014 No comments

More retirement-related regulatory news for plan sponsors, including links to detailed information.

Senate strikes bipartisan deal on unemployment benefits; pensions affected
Senators Jack Reed (R-RI) and Dean Heller (R-Nev) have penned a bipartisan proposal that would extend federal unemployment benefits for five months and allow for retroactive payments to December 28, 2013. The program expired on December 28, 2013.

The deal, which was crafted from both Republican and Democratic proposals, would pay for the $10 billion cost by including the pension offset provisions from the 2012 highway bill (MAP-21), which were set to be phased-out this year. The proposal also would:

• Allow single-employer defined benefit pension plans to prepay their flat rate premiums to the Pension Benefit Guaranty Corporation (PBGC).
• Extend customs user fees through 2024.
• End federal unemployment insurance (UI) payments to any individual whose adjusted gross income in the preceding year was $1 million or more.
• Strengthen reemployment and eligibility assessment (REA) and ReEmployment Services (RES) programs. In an effort to help get job seekers back into the workforce, individuals receiving emergency unemployment compensation will be eligible for enhanced, personalized assessments and referrals to reemployment services when they begin their 27th week of UI (Tier I) and 55th week of UI (Tier III).

DOL issues proposed rule that would require service providers to furnish disclosure guide to pension plans
The Employee Benefit Security Administration of the U.S. Department of Labor (DOL) has issued a proposed rule that would require certain retirement plan service providers to disclose information about the service providers’ compensation and potential conflicts of interest. The proposed rule would amend the DOL’s final rule on fee disclosures to require covered service providers to furnish a guide along with the initial disclosures to help fiduciaries if the disclosures contain multiple or lengthy documents.

To read the entire proposed rule, click here.
The DOL has also released a fact sheet to accompany the proposed rule.

PBGC issues final rule on premium rates, payment of premiums
The PBGC has issued a final rule making its premium rules more effective and less burdensome. Based on its regulatory review under Executive Order 13563, PBGC proposed to simplify due dates, coordinate due dates for terminating plans with the termination process, make conforming and clarifying changes to the variable-rate premium rules, give small plans time to value benefits, provide relief from penalties, and make other changes.

On January 3, 2014, PBGC published a final rule moving the flat-rate premium due date for large single employer and multiemployer plans (500 or more participants) to the variable-rate premium due date for single-employer plans, starting with the 2014 plan year. This final rule finalizes the rest of the proposal.

PBGC has now completed the process of simplifying the due-date rules by making small plans’ premiums due at the same time as large and mid-size plans’ premiums. However, because of a transition rule that gives small plans more time to adjust to the new provisions, the due dates will not be completely uniform until 2015.

To read the entire final rule, click here.

Read more…

Regulatory roundup

March 10th, 2014 No comments

More retirement-related regulatory news for plan sponsors, including links to detailed information.

President releases FY2015 budget proposal
The president has released his fiscal year 2015 budget proposal, outlining the administration’s policy priorities.

Key areas included in the proposal for employment-based benefits and compensation are:

• Pension Benefit Guaranty Corporation (PBGC) board authority to adjust single-employer and multiemployer premiums, taking into account the risks of sponsors and working with Congress to develop a comprehensive solution to address the multiemployer insurance program
• Creation of automatic individual retirement accounts (IRAs) for employees who do not have access to an employer-sponsored plan
• An increase in the federal minimum wage
• Support for agencies that protect workers’ wages and overtime pay, benefits, health, and safety, and investing in preventing and detecting the misclassification of employees as independent contractors
• Funding assistance for states to launch paid leave programs for workers
• Expansion of the earned income tax credit for low-income, childless workers

The proposal also contains continued funding for Patient Protection and Affordable Care Act (ACA) implementation; it does not contain a provision included in prior years’ budgets for “chained CPI” to adjust Social Security and other federal benefits for older Americans.

To read the entire budget document, click here.
For a copy of the “Green Book” from the Department of Treasury, click here.

IRS updates web posting with information on the new Form 5300
The Internal Revenue Service (IRS) has updated its web posting that discusses the new Form 5300 and instructions, the retired Form 5300 (Schedule Q), and all the revisions for Form 5300. Links for comments on the new forms are also provided.

To read the updated information, click here.

IRS updates Form 990 filing tips: Reporting executive compensation
The IRS has updated its tips and frequently asked questions (FAQs) related to core form Part VII and Schedule J executive compensation reporting.

To read the updated information, click here.

IRS updates 401(k) resource guide for plan sponsors: What if you are audited?
Authority and responsibilities of the IRS and the U.S. Department of Labor (DOL): ERISA, as amended, provides the legal basis for the IRS employee plans (EP) compliance program. The jurisdiction over the rules for 401(k) plans is divided between the IRS and the DOL.

• The IRS has primary jurisdiction over the qualified status of 401(k) plans, which includes examining plans and processing requests for determination letters
• The DOL has primary jurisdiction over the fiduciary standards, reporting and disclosure of requirements, and other rules that do not affect the qualified status of 401(k) plans.

The IRS’s EP examination program is the enforcement arm for the statutory and regulatory compliance requirements that apply to qualified 401(k) plans. The overriding objective of the EP examination program is to develop and integrate appropriate compliance and enforcement programs that will have the greatest positive impact on the retirement system. The EP examination program has a high stake in maintaining a successful private retirement system.

For more information, click here.

Regulatory roundup

December 10th, 2013 No comments

More retirement-related regulatory news for plan sponsors, including links to detailed information.

DOL releases advance copies of 2013 Form 5500 annual report
The U.S. Department of Labor (DOL) Employee Benefits Security Administration, the Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation (PBGC) have released advance informational copies of the 2013 Form 5500 annual return/report and related instructions. These advance copies of the 2013 Form 5500 are for informational purposes only and cannot be used to file a 2013 Form 5500 annual return/report. Pension and welfare benefit plans that are required to file electronically an annual return/report regarding their financial conditions, investments, and operations each year generally satisfy that requirement by filing the Form 5500 or Form 5500-SF and any required attachments.

Informational copies of the forms, schedules, and instructions are available here. For more information on the Form 5500 Series, click here.

PBGC issues final rule with new table for determining expected retirement ages
The PBGC has issued a final rule amending allocation of assets in single-employer plans by substituting a new table for determining expected retirement ages for participants in pension plans undergoing distress or involuntary termination with valuation dates falling in 2014. This table is needed in order to compute the value of early retirement benefits and, thus, the total value of benefits under a plan.

To read the entire rule, click here.

PBGC requests OMB approval and public comment for 11 collections of information on multiemployer regulations
The PBGC intends to request that the U.S. Office of Management and Budget (OMB) extend approval, under the Paperwork Reduction Act, of collections of information in PBGC’s regulations on multiemployer plans under ERISA.

For more information, click here.

IRS issues reminder on saver’s credit
The IRS has issued IR-2013-93 on how low- and moderate-income workers can take steps now to save for retirement and earn a special tax credit in 2013.

For more information, click here.

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Regulatory roundup

October 7th, 2013 No comments

More retirement-related regulatory news for plan sponsors, including links to detailed information.

Single employer defined benefit plans: Changing plan years
The Internal Revenue Service (IRS) has recently received questions from practitioners and pension plan sponsors asking if and how single employer defined benefit pension plan sponsors may change a plan year to delay the effect of Moving Ahead for Progress in the 21st Century (MAP-21) Pension Benefit Guaranty Corporation (PBGC) premium increases for a plan. Sponsors have asked if a change in plan year for this purpose is eligible for automatic approval under Revenue Procedure 87-27.

A plan sponsor thinking of changing a plan year should keep in mind the implications of this decision. In most cases, changing the plan year means making other changes such as:

• Moving the plan’s annual actuarial valuation date (which may require system changes and changes to internal procedures for collecting data)
• Shifting timetables for coordinating with the plan’s actuary, auditor, trustee, and other providers

Changing a plan year also increases the risk that the plan sponsor may miss a key deadline (for example, for contributions, notices, and reporting) because these deadlines change when the plan year changes.

For more information, click here.

Bike share expenses do not qualify for tax exclusion as transportation fringe benefits
The IRS’s Office of the Chief Counsel released a memorandum (Number 2013-0032) that states that bike share expenses do not quality for tax exclusion as transportation fringe benefits. Specifically the memo states:

“Section 132(f)(4), the provision which permits employees to reduce their taxable compensation in order to receive reimbursements for transit expenses on a pre-tax basis, does not apply to qualified bicycle commuting reimbursement. Specifically, section 132(f)(4) provides that ‘no amount shall be included in the gross income of an employee solely because the employee may choose between any qualified transportation fringe (other than a qualified bicycle commuting reimbursement) and compensation that would otherwise be includible in the gross income of such employee’ … Thus, allowing bike share programs to qualify as a pre-tax benefit under section 132 would require legislative action by Congress.”

To read the entire memo, click here.

GASB launches new website
The Governmental Accounting Standards Board (GASB) launched an updated website that features more user-friendly navigation and “plain English” resources that provide extensive background on accounting and financial reporting issues for state and local governments. The site is found at www.gasb.org.

The new GASB website is designed to be the primary source of news and information about the GASB and its activities. The website includes videos and other new content intended for a wide range of users, including those who are unfamiliar with the GASB and its activities.

Read the GASB’s news release here.

OIG recommends EBSA provide guidance and oversight for ERISA plans holding hard-to-value alternative investments
Concerns by various parties, such as the IRS, General Accountability Office (GAO), and the American Institute of Certified Public Accountants over plan assets invested into alternative and hard-to-value investments prompted the U.S. Department of Labor (DOL) Office of the Inspector General, Office of Audit (OIG), to conduct an audit to determine if the Employee Benefits Security Administration (EBSA) is providing adequate oversight of employee benefit plans that hold alternative investments.

In its 47-page report, OIG recommended that the assistant secretary for EBSA take the following actions for plans holding hard-to-value alternative investments:

• Propose and formalize guidance and evaluate the ERISA Council recommendations
• Improve procedures in enforcement reviews
• Improve Form 5500 data collection, analysis, and targeting

To read the entire OIG report, click here. Also, read EBSA Assistant Secretary Phyllis Borzi’s response here.

Regulatory roundup

September 9th, 2013 No comments

More retirement-related regulatory news for plan sponsors, including links to detailed information.

DOL releases 2011 versions of private pension plan bulletin and Form 5500 data
Each year, most private pension and many private welfare benefit plans satisfy their annual reporting requirement by filing a Form 5500 annual return/report regarding their financial conditions, investments, and operations with the U.S. Department of Labor (DOL), Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation (PBGC). The Employee Benefits Security Administration (EBSA) discloses Form 5500 data collected through the EFAST2 systems in a variety of formats.

The unedited data is provided through the EBSA Freedom of Information Act (FOIA) web page while a pension research sample and a health data set are available for download on this web page. The pension research sample supports analysis of the plan, participant, and financial characteristics of the private pension plan universe and is used to produce the Private Pension Plan Bulletin Abstract of Form 5500 Annual Reports, an annual publication that summarizes data on private pension plans.

For more information, click here.

IRS updates web page on choosing a retirement plan: 403(b) tax-sheltered annuity plan
The IRS has updated its web page providing instructions on 403(b) tax-sheltered annuity plans.

To view the updated web page, click here.

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