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Posts Tagged ‘IRS’

Regulatory roundup

September 15th, 2014 No comments

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

IRS issues pension funding stabilization guidance under HATFA
The Internal Revenue Service (IRS) has released Notice 2014-53 providing guidance on the changes to the funding stabilization rules for single-employer pension plans under the Internal Revenue Code (Code) and the Employee Retirement Income Security Act of 1974 (ERISA) that were made by section 2003 of the Highway and Transportation Funding Act of 2014 (HATFA).

To read the entire notice, click here.

House Ways and Means announces hearing on private single-employer and multiemployer pension plans
The Committee on Ways and Means will be holding a hearing on defined benefit pension plans offered by private sector employers, including both multiemployer plans and single employer plans. The hearing will take place on Wednesday, September 17, at the 1100 Longworth House Office Building, beginning at 10:15 A.M.

For more information, click here.

Regulatory roundup

September 2nd, 2014 No comments

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

Treasury and IRS release priority guidance plan 2014-2015
The Department of the Treasury and the IRS recently released their annual Priority Guidance Plan for the July 2014 to July 2015 fiscal year. The plan lists 317 project priorities based on the suggestions of taxpayers, tax practitioners, and industry groups and is revised and republished throughout the fiscal year to reflect additional projects and guidance.

List focuses resources on guidance items that are most important to taxpayers and tax administration. Published guidance plays an important role in increasing voluntary compliance by helping to clarify ambiguous areas of the tax law.

To download the entire 2014-2015 Priority Guidance Plan, click here.

Census Bureau: Survey of public pensions: State-administered DB data
The Census Bureau has published its “2013 Annual survey of public pensions: State-administered defined benefit data.” The survey provides a comprehensive look at the financial activity of the nation’s state-administered defined benefit pension systems, including cash and investment holdings, receipts, payments, pension obligations, and membership information. Statistics are shown at the national level and for individual states. The total cash and investment holdings of the nation’s state-administered defined benefit pensions systems totaled $2.7 trillion in 2013. By comparison, total cash and investment holdings totaled $2.5 trillion in 2012, yielding a 7.8 percent increase from 2012 to 2013.

For more information, click here.

IRS issues draft Form 8955-SSA for 2014
The IRS has released a draft copy of Form 8955-SSA, Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits.

To download a copy of the form, click here.

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 Department of Labor’s (DOL) Employee Benefits Security Administration 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 the Employee Retirement Income Security Act of 1974 (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 Jan. 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 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.

Categories: Benefit News Tags: , , ,

Regulatory roundup

August 11th, 2014 No comments

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

Social Security published article on two benefits provisions
A new article published by the Social Security Administration (SSA) uses health and retirement study data to investigate the effects of the SSA’s Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) on Social Security benefits received by households. The provisions reduce benefits for individuals or the dependents of individuals whose work histories include jobs for which they were entitled to a pension and were not subject to Social Security payroll taxes (“noncovered” employment).

To read the entire article, click here.

IRS updates FAQ on 403(b) preapproved plan program remedial amendment period
The Internal Revenue Service (IRS) has updated a frequently asked question (FAQ) regarding the 403(b) preapproved plan program remedial amendment period. According to the IRS, by adopting a 403(b) preapproved plan by the deadline (to be established and announced by the IRS), the program allows an eligible employer to retroactively correct defects in the form of its written 403(b) plan back to the first day of the plan’s remedial amendment period, which is the later of: January 1, 2010, or the plan’s effective date.

The employer’s adoption of a preapproved 403(b) plan that has a favorable opinion of advisory letter automatically corrects any defects in its prior written 403(b) plan, but not defects in any documents incorporated by reference into the prior plan). Interim amendments are not required for a plan to be eligible for this remedial amendment period.

403(b) plans sponsors who didn’t adopt a written plan before December 31, 2009, can use the 403(b) Voluntary Program Submission Kit to correct this error.

The IRS also indicated that at this time it does not anticipate opening a determination letter program for individually designed 403(b) plans.

For more information, click here.

IRS updates guide to common qualified plan requirements
The IRS has recently updated its web page on common qualified retirement plan requirements. The list highlights some of the more important plan requirements to help employers in implementing practices, procedures, and internal controls to monitor plan operations.

For more information, click here.

JCT releases estimates of federal tax expenditures for fiscal years 2014-2018
The Joint Committee on Taxation (JCT) has released its latest summary of federal tax expenditures entitled “Estimates of federal tax expenditures for fiscal years 2014-2018” (JCX-97-14). The JCT says that the employer health exclusion will cost the government $785.1 billion in forgone revenue from 2014 to 2018 and that the next exclusion of defined contribution plans will cost $399 billion.

To download a copy of the report, click here.

IRS updates posting on Voluntary Correction Program fee schedule and Form 8951
The IRS has updated its web page in regards to the Voluntary Correction Program (VCP) fee schedule and Form 8951 (Compliance Fee for Application for Voluntary Correction Program [VCP]).

To access Form 8951, click here.
To view the updated VCP fee schedule page, click here.

Regulatory roundup

August 4th, 2014 No comments

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

IRS private letter ruling on lump sum window for those in pay status will not violate MDR
The Internal Revenue Service (IRS) recently released a private letter ruling (PLR 201431034) stating that a lump sum window for participants in pay status will not violate minimum distribution requirements (MDR).

According to the PLR:

Under the amendment, the Covered Individuals would have a specified limited window period of no more than 180 days during which they could elect to receive in lieu of their current annuity what Company A represents is the actuarial present value of their remaining benefits under the aforementioned Plans, in the form of a single lump sum payment. The window period may consist of multiple phases, such as an opt-in phase during which Covered Individuals would have the opportunity to proceed through the remainder of the window program and an election phase during which Covered Individuals could elect to receive, in lieu of their current annuity, the actuarial present value of their remaining annuity payments in the form of an immediate lump sum, and the extent the law requires, a qualified joint and survivor annuity (including a single annuity for retirees who are not married), or a qualified optional survivor annuity.

To read the entire private letter ruling, click here.

Social Security trustees retain projected year of trust fund reserve depletion
The Social Security Board of Trustees recently released its annual report on the long-term financial status of the Social Security Trust Funds. The combined asset reserves of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds are projected to become depleted in 2033, unchanged from last year, with 77% of benefits still payable at that time. The DI Trust Fund will become depleted in 2016, also unchanged from last year’s estimate, with 81% of benefits still payable.

To read the entire report, click here.

PBGC creates online resource guide on choosing between lump sum or annuity
The Pension Benefit Guaranty Corporation (PBGC) recently created an online resource that provides information to assist with “Making a choice: Lump sum or annuity?”

The new resource page allows the public to get some insight on key questions that should be answered when making this important decision and offers other hypothetical scenarios.

To read the entire guide, click here.

401(k) plans: Improvements can be made to better protect participants in managed accounts
The U.S. Government Accountability Office (GAO) has issued the report “401(k) plans: Improvements can be made to better protect participants in managed accounts.” The report reviews eight managed account providers that represented an estimated 95% of the industry involved in defined contribution plans in 2013, showing that the providers varied in how they structured managed accounts, including the services they offered and their reported fiduciary roles.

To read the entire report, click here.

IRS posts three FAQs regarding EGTRRA determination letter program for preapproved plans
The IRS has posted three new frequently asked questions (FAQs) regarding the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) determination letter program for preapproved plans.

Question #4: “If I file a determination letter application for my pre-approved defined benefit plan by April 30, 2012, and the Service determines that additional remedial amendments are needed, will I have time to adopt the amendments?”
Question #6: “I am an adopter of a volume submitter plan and I wish to make certain changes to the pre-approved document. When I file a determination letter application, must I incorporate these changes in the pre-approved plan document or may I make the changes as separate amendments to the plan?”
Question #8: “I am filing Form 5310 to terminate my EGTRRA-approved M&P or volume submitter plan. Must I include copies of interim amendments with my application?”

Regulatory roundup

July 28th, 2014 No comments

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

IRS updates FAQs on retirement plan terminations and plan participant rights and plan events
The Internal Revenue Service (IRS) has updated its frequently asked questions (FAQs) regarding retirement plan terminations. An employer can terminate a plan for various reasons including bankruptcy, merger, or voluntary termination. Questions and answers are provided on terminating a retirement plan and partial plan terminations.

The second updated posting provides an explanation of plan events that may trigger retirement plan participant rights, what notices retirement plan participants should receive based upon these plan events, and when these notices should be issued.

To read the updated web page about retirement plan terminations, click here.
To read the updated web page about retirement plan participant rights, click here.

Senate HELP Committee approves bill making ERISA clarifications
Senator Tom Harkin (D-IA), chairman of the U.S. Senate Health, Education, Labor, and Pensions (HELP) Committee, issued S.2511 after the committee approved the bill on July 23.

S.2511 will bring clarity to the pension downsizing liability rules and will ensure that there is a workable mechanism to protect pension benefits when employers show symptoms of financial distress. The bill will now be considered by the full Senate.

To read the entire provision, click here.

Regulatory roundup

July 7th, 2014 No comments

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

IRS issues final rules on the use of longevity annuity contracts
The Internal Revenue Service (IRS) issued a final rule relating to the use of longevity annuity contracts in tax-qualified defined contribution plans under section 401(a) of the Internal Revenue Code (Code), section 403(b) plans, individual retirement accounts and annuities (IRAs) under section 408, and eligible governmental plans under section 457(b).

These regulations will provide the public with guidance necessary to comply with the required minimum distribution rules under section 401(a)(9) applicable to an IRA or a plan that holds a longevity annuity contract. The regulations will affect individuals for whom a longevity annuity contract is purchased under these plans and IRAs (and their beneficiaries), sponsors and administrators of these plans, trustees and custodians of these plans and IRAs, and insurance companies that issue longevity annuity contracts under these plans and IRAs.

To read the entire final rule, click here. For the Treasury news release, click here.

PBGC report shows improvement in single-employer plans, but underscores increased risks to some multiemployer plans
Despite substantial economic and market gains, multiemployer pension plans covering about 1.5 million people are severely underfunded, threatening benefit cuts for current and future retirees, according to the FY 2013 Projections Report recently released by the Pension Benefit Guaranty Corporation (PBGC). By comparison, the financial situation for private single-employer plans, which cover about 30 million participants, is projected to improve.

To read the entire report, click here. To read the entire news release issued by the PBGC, click here.

IRS updates web page on top mistakes in VCP submissions
The IRS has updated its web page regarding the top mistakes made in voluntary correction program (VCP) submissions.

To view the updated web page, click here.

Categories: Benefit News Tags: , ,

Regulatory roundup

June 30th, 2014 No comments

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

Supreme Court rules in retirement plan fiduciary presumption of prudence in stock drop case
The U.S. Supreme Court has unanimously ruled that the fiduciaries of an ERISA-covered retirement plan that includes employer stock as an investment option are not entitled to any “presumption of prudence” in the investment decisions made by the plan administrator (Fifth Third Bancorp v. Dudenhoeffer (no. 12-751, 6/25/2014)). In overturning the 2012 ruling by the U.S. Court of Appeals for the Sixth Circuit, the high court said that the fiduciaries are subject to the same duty of prudence that generally applies to fiduciaries under ERISA.

The Supreme Court remanded the case, directing the Sixth Circuit to reconsider whether the participants stated a claim under precedents established by the high court. The Supreme Court said that a fiduciary’s conduct should be evaluated in the context of publicly available information and that fiduciaries cannot be found imprudent for failing to buy or sell stock in violation of insider-trading securities laws. In addition, the high court said that a complaint must plausibly allege an alternative action that the defendant could have taken when plaintiffs state a claim for fiduciary imprudence.

Retirement plan and other provisions moving in transportation/highway trust fund bill
Senate Finance Committee Chairman Ron Wyden (D-OR) has modified his proposed transportation/highway funding legislation, which now includes changes to the retirement plan required distribution (“stretch IRA”) provision. The revised bill alters the beginning date for employees who become 5% owners after age 70-1/2 and eliminates rules in the earlier proposal relating to rollovers of distributions from employer-sponsored plans with a delayed effective date, i.e., governmental plans and collectively bargained plans.

Currently, the Internal Revenue Service (IRS) has indicated that a plan under which a participant’s normal retirement age changes to an earlier date upon completion of a stated number of years of service typically will not satisfy vesting and accrual rules. According to the Joint Committee on Taxation’s description of this provision:

An applicable plan is a defined benefit plan that currently provides such a normal retirement age. A plan is generally an applicable plan only with respect to an individual who (1) is a participant in the plan on or before January 1, 2017, or (2) is an employee at any time on or before January 1, 2017, of any participating employer and who becomes a participant in the plan after January 1, 2017.

A plan does not fail to be an applicable plan solely because the normal retirement age described above currently applies only to certain plan participants or certain employers participating in the plan. In addition, subject to the limitation described above relating to participation or employment on or before January 1, 2017, if application of this normal retirement age is expanded to additional participants or participating employers, the plan will be treated as an applicable plan with respect to those participants and participating employers.

Finance Committee members have proposed dozens of amendments in advance of the markup. Among them are changes that would:

• Extend the parity for employer-provided transit benefit with parking benefits
• Allow for the continuation of a normal retirement age (NRA) of 30 years in service for currently existing defined benefit pension plans
• Require appropriate worker/independent contractor classifications in professional services organizations
• Temporarily repeal the Davis-Bacon “prevailing wage” rates for highway projects

Census Bureau: Summary of quarterly survey of public pensions for the first quarter 2014
This quarterly survey of public pensions provides national summary data on the revenues, expenditures, and composition of assets of the largest defined benefit public employee retirement systems for state and local governments. This survey currently consists of a panel of 100 retirement systems, which comprise 89.4% of financial activity among such entities, based on the 2007 Census of Governments.

To access the survey, click here.

Regulatory roundup

June 16th, 2014 No comments

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

IRS issues guidance on nonqualified deferred compensation from certain tax indifferent parties
The Internal Revenue Service (IRS) issued Revenue Ruling 2014-18, providing that a nonstatutory stock option or a stock appreciation right (each, a stock right) granted by a nonqualified entity for purposes of section 457A is treated as exempt from section 457A, provided that the stock right is exempt from section 409A, and further provided that the stock appreciation right at all times by its terms must be settled, and is settled, in service recipient stock for purposes of section 409A. Notice 2009-8 has been amplified.

Revenue Ruling 2014-18 will be published in Internal Revenue Bulletin 2014-26 on June 23, 2014. For more information, click here.

IRS publishes new edition of Retirement News for Employers
The IRS has released its latest edition of Retirement News for Employers, which offers guidance on the following topics:

• Penalty relief
• Safe harbor 401(k) and 401(m) plans
• Rollovers
• How to request a copy of a determination letter application file
• Avoiding mistakes
• Correcting mistakes
• Retirement plan deadlines
• Updates from the U.S. Department of Labor

To read the entire newsletter, click here.

Categories: Benefit News Tags: ,

Regulatory roundup

May 27th, 2014 No comments

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

IRS issues announcement that penalty relief for small plans begins in June
The Internal Revenue Service (IRS) will begin a one-year pilot program in June to help small businesses with retirement plans that owe penalties for not filing reporting documents. By filing current and prior year forms during this pilot program, they can avoid penalties. The IRS is reaching out to certain small businesses that maintain retirement plans and may have been unaware that they had a filing requirement.

To read the entire IRS news release, click here.

IRS issues private letter ruling on church plan
The IRS has released Private Letter Ruling (PLP) 201420028 regarding the church plan status of a retirement plan of an affiliated religious organization not under direct control of an identifiable church.

To read the entire PLP, click here.

2010 IRPAC reports make recommendations on Form W-2, health valuation reporting, and more
The Information Reporting Program Advisory Committee (IRPAC) of the IRS has provided recommendations to assist the agency in developing resolutions to issues related to the new Form W-2, Wage and Tax Statement, in health valuation reporting, and in communicating information to taxpayers.

To learn more about IRPAC’s recommendations, click here.

IRPAC also released a report titled “2010 IRPAC report: Ad hoc subgroup.” Recommendations by a subgroup of the IRPAC include:

• Electronic furnishing of Forms 1098, 1099, 5498, and W-2
• Form 5498 and fair market value reporting for deceased beneficiaries and successor beneficiaries
• Information regarding nonresident alien taxation and tax reporting
• Reporting guidelines for the return of mistaken health savings account (HSA) contributions to an employer
• Form 1099-R reporting under Employee Plans Compliance Resolution System (EPCRS) guidelines for simplified employee pension (SEP), salary reduction SEP (SARSEP), and Savings Incentive Match Plans for Employees (SIMPLE) excesses returned to employers
• Form 5498-SA, HSA, Archer medical savings account (MSA), or Medicare Advantage MSA information due date change

To read the entire IRPAC report, click here.

IRS updates posting regarding recent developments of governmental plans under Section 401(a)
The IRS has posted recent developments regarding governmental plans under Internal Revenue Code Section 401(a). The posting provides information under the following topics:

• Determination letters
• Group trusts
• Normal retirement age
• Vesting
• Possible approaches to governmental plan guidance
• Governmental plans updates

To read the updated webpage, click here.

IRS posts retirement plans FAQs regarding USERRA and SSCRA
The spring 2003 edition of Employee Plans News presented an article describing the Uniformed Services and Reemployment Rights Act (USERRA) and the Veterans and Sailors Civil Relief Act of 1940 (SSCRA). The article included several frequently asked questions concerning the reemployment of veterans and the restoration of retirement plan benefits. Because of the interest generated by the article, supplemental FAQs on this topic have been addressed by the IRS.

To read the entire list of FAQs, click here.

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