More retirement-related regulatory news for plan sponsors, including links to detailed information.
IRS discuss current issues EP compliance unit is reviewing
The Internal Revenue Service (IRS) has posted a discussion with Monika Templeman, director of Employee Plans Examinations, regarding current issues that the Employee Plans Compliance Unit (EPCU) is reviewing. Topics discussed include:
• Confirming higher educational organizations’ compliance with the universal availability rule, which is one of the main errors found in 403(b) plan examinations.
• Form 5500 series returns that show no plan participants, yet the plan received employer contributions.
• Terminated plans that have assets remaining. This could be a violation of Revenue Ruling 89-87, which requires plan assets be distributed as soon as administratively feasible after the stated plan termination date.
• Form 5310 returns that had over a 20% drop in participants from one year to the next to determine if a partial termination occurred and, if so, whether affected plan participants were 100% vested. Because of this project, over 250 participants were 100% vested as required by Revenue Ruling 2007-43.
• Form 5500 Non-Filer Project. Plan sponsors are contacted if their latest Form 5500 returns were not marked ‘final’ and they have not filed a subsequent return. EPCU began by selecting returns that were due for the plan year ending January 31, 2010 (originally due August 31 if no extension was filed) and that have still not filed by February 2011.
• Qualifying Employer Securities Project contacted plan sponsors who reported over 10% of their plans’ net assets were invested in employer securities.
• Two projects focusing on improving international compliance.
To read the entire discussion, click here.
PBGC requests extension of collection of multiemployer plan information
The Pension Benefit Guaranty Corporation (PBGC) issued a notice asking the Office of Management and Budget (OMB) to extend approval of a collection of information under its regulations on multiemployer plans that expires March 31, 2014, April 30, 2014, or July 31, 2014. The collection of information for which PBGC is requesting approval includes various reporting requirements related to:
• Termination of multiemployer plans
• Extension of special withdrawal liability rules
• Variances for sale of assets
• Reduction or waiver of complete withdrawal liability
• Reduction or waiver of partial withdrawal liability
• Allocating unfunded vested benefits to withdrawing employers
• Notice, collection, and redetermination of withdrawal liability
• Procedures for PBGC approval of plan amendments
• Notice of insolvency
Comments should be submitted no later than 30 days after publication in the Federal Register. The notice was published on March 19, 2014. To read the entire notice, click here.
IRS posts guidance on withdrawal of Cycle C cash balance applications; provides FAQs on Cycle C
Cycle C determination letter applicants who intend to adopt a preapproved cash balance plan may withdraw their applications for individually designed cash balance plans by May 31, 2014, if they sign Form 8905, Certification of Intent to Adopt a Pre-approved Plan, by March 31, 2014.
Announcement 2014-4 extended the submission period for preapproved defined benefit (DB) pension plans from January 31, 2014, to February 2, 2015, to allow time for the IRS to expand the preapproved program to permit plans with cash balance features. The announcement also allowed Cycle C plan sponsors who want to adopt a preapproved cash balance plan to complete Form 8905 by March 31, 2014, instead of submitting determination letter applications for individually designed plans by the Cycle C deadline of January 31, 2014.
For more information, click here.
IRS updates posting on checking the status of determination, opinion, and advisory letters
The IRS has updated its posting titled “Determination, opinion, and advisory letter for retirement plans – check the status of your letter.” The posting provides a chart with information regarding receipt of an application and important links.
To view the updated posting, click here.