More retirement-related regulatory news for plan sponsors, including links to detailed information.
Social Security Administration working on DOMA implications to Social Security benefits
The president has directed the attorney general to work with other members of his cabinet to review the recent Supreme Court decision on the Defense of Marriage Act (DOMA) and determine its impact on federal benefit programs—including benefits administered by Social Security—to ensure swift and smooth implementation.
To read the news release issued by the Social Security Administration, click here.
PBGC requests OMB approval of information collection of multiemployer plan data
The Pension Protection Act of 2006 (Pub. L. No. 109-280), or PPA, requires the actuary of a multiemployer plan in effect on July 16, 2006, to certify the plan’s status within certain zones established under PPA to the plan’s trustees and the Secretary of the Treasury within 90 days after the beginning of each plan year.
The certification must state whether or not the plan meets any of the tests to be considered in critical or endangered status, whether a plan already is in critical or endangered status, or whether the plan is progressing as scheduled toward the applicable statutory target for improved funding. Plans in endangered and critical status are restricted with respect to the types of actions they may take and the types of amendments they may adopt, as well as required to follow special rules during the adoption period of collective bargaining agreements.
The Pension Benefit Guaranty Corporation (PBGC) is researching the effects of potential changes to its multiemployer program. The PBGC’s objective is to quantify the effect of potential policy proposals on multiemployer plans that are or could enter critical status with respect to projected dates of insolvency, amount of financial assistance that PBGC would be required to provide, and the benefit changes plan participants would experience.
To assist in this research, PBGC is requesting that the Office of Management and Budget (OMB) approve an information collection request of multiemployer pension plans, their actuarial service providers, and their stakeholders, including unions and relevant professional and trade organizations.
Read the entire Request for OMB Approval at the Federal Register.
IRS Notices (CP216F, -G, or -H) – Application of Time Extension to File an Employee Plan Return
The Internal Revenue Service (IRS) has updated its posting on Notices (CP216F, -G, or -H) – Application of Extension of Time to File an Employee Plan Return. The web posting, in the form of questions and answers, provides guidance to:
• What is a CP216F, -G, or -H notice?
• Why are CP216F, -G, or -H notices generated?
• If customers receive a CP216G can they resubmit the EP Extension with the missing signature to get the extension approved?
• What should the customer do if a CP216H is received?
• Is there any recourse to being subject to the late filing penalties?
IRS posts sample automatic enrollment and default investment notice
Although this sample notice is designed for use in satisfying the qualified automatic contribution arrangement (QACA) and eligible automatic contribution arrangement (EACA) notice requirements, and the notice requirements under ERISA sections 404(c)(5) and 514(e)(3), plan sponsors may also find the sample notice to be helpful in drafting an employee explanation for an automatic contribution arrangement that is neither a QACA nor an EACA.
To read the entire notice, click here.
IRS answers: How much salary can be deferred by those eligible for more than one retirement plan?
The amount you can contribute to retirement plans is your individual limit each calendar year no matter how many plans in which you participate. This limit must be aggregated for these plan types:
• SIMPLE plans (SIMPLE IRA and SIMPLE 401[k] plans)
If you’re eligible to defer to a 457(b) plan, you have a separate limit that includes both employee and employer contributions.
Make sure you don’t exceed your individual limit. If you do and the excess isn’t returned by April 15 of the next year, you could be subject to double taxation:
• Once in the year you deferred your salary
• Again when you receive a distribution
For more information, click here.
IRS provides links to fixing common plan mistakes
The IRS has updated its website to provide links to information for fixing common plan mistakes. Links to more information include:
• 403(b) Plans with Operational Failures
Available correction methods may depend on when the failure occurred.
• Not Correcting ADP/ACP Mistakes Timely
How to fix a 401(k) plan’s failure to timely satisfy ADP or ACP tests.
• Failure to Timely Adopt Interim Amendments
How to fix a failure to adopt interim amendments on time.
• Help! I Missed the April 30 Deadline for Signing My Defined Contribution Plan
How to fix the failure to adopt an EGTRRA plan on time (for adopters of preapproved defined contribution plans).
• Help! I Missed the April 30 Deadline for Signing My Defined Benefit Plan
How to fix the failure to adopt an EGTRRA plan on time (for adopters of preapproved defined benefit plans)
• Nonamender Failures and the Voluntary Correction Program (VCP)
Overview of types of late amendment failures and relief available under the VCP.
IRS updates FAQs for enrolled actuaries
The IRS has updated its 11 frequently asked questions (FAQs) for enrolled actuaries. For example, one may find answers to the following questions:
• How do I update my address or other contact information?
• How can I find out whether a practitioner is an enrolled actuary in good standing with the Joint Board?
• How do I obtain my Joint Board examination answer sheet?
To access the FAQ, click here.
GAO report: Retirement security, challenges, and prospects for employees of small businesses
This testimony describes 1) the challenges small employers face in helping ensure that their workers secure retirement income, and 2) types of multiemployer plans (MEPs) and their potential to address these challenges. The Government Accountability Office (GAO) drew from its previous reports related to small employer challenges in establishing and maintaining a retirement plan and recent work on MEPs issued from March 2012 through September 2012.
To read the entire report, click here.