More retirement-related regulatory news for plan sponsors, including links to detailed information.
IRS issues new process for information document requests regarding retirement plan audits
The Commissioner for the Tax Exempt and Government Entities (TE/GE) of the Internal Revenue Service (IRS) issued a memorandum containing new procedures for all TE/GE examiners on Information Document Requests (IDR). The IRS in the past had been flexible with the extension of response deadlines for document requests as long as the examiner views the sponsor as acting in good faith, especially once a professional becomes involved in the process.
This new memorandum takes flexibility out of the manner in which the IRS collects plan and employer information to conduct an audit. These new rules center on the timing of the IDRs, which are central to an audit.
To learn more, click here.
GAO publishes survey on 401(k) plans
The Government Accountability Office (GAO) issued “401(K) plans – effects of eligibility and vesting policies on workers’ retirement savings” (GAO-17-69). The publication is a non-generalizable survey of 80 401(k) plans ranging in size from fewer than 100 participants to more than 5,000. The GAO found that many plans have policies that affect workers’ ability to (1) save in plans (eligibility policies), (2) receive employer contributions, and (3) keep those employer contributions if they leave their job (vesting policies).
To download a copy of the entire publication, click here.
Proposed rule issued regarding minimum present value requirements for DB plan distributions
The IRS filed a proposed rule providing guidance on changes made by the Pension Protection Act of 2006 (PPA) relating to the minimum present value requirements applicable to certain defined benefit (DB) pension plans. These proposed regulations would amend the current final regulations under section 417(e) regarding the minimum present value requirements of section 417(e)(3) in several areas. Specifically, the proposed regulations would update the regulations for changes made by PPA and eliminate certain obsolete provisions. The proposed regulations also contain a few other clarifying changes.
To read the entire proposed rule, click here.