ERISA Rules and Regulations

Retirement News for Employers – February 24, 2014 Edition

noreply@blogger.com (Aaron Juckett, ESOP Consultant) — Tue, 25 Feb 2014 21:20:00 +0000

The IRS released Retirement News for Employers – February 24, 2014 Edition. It contains the following articles:

· Retirement plans for your small business – Links to types of plans, a publication with a comparison chart, a webcast and an interactive website to help you choose

SEP Plans

You can still set up a SEP by the due date (including extensions) of your 2013 business income tax return
Employees for SEP plans includes those of all related employers – SEP Fix-It Guide

SIMPLE IRA Plans

Tips for the sole proprietor – where to deduct, when to contribute and how to calculate the owner's contributions
3% matching contribution is based on unlimited compensation but 2% nonelective is limited to annual amount

Saver’s Credit – You may qualify for the Saver’s Credit of up to $2,000 for contributing to an IRA or company retirement plan, and you have until April 15, 2014, to make 2013 IRA contributions

Safe-harbor 401(k) notice – How to correct if you've either failed to give participants the annual notice or didn’t give it to them on time

Mark your calendar – retirement plan deadlines

Roth account in your retirement plan – if you participate in a 401(k), 403(b) or governmental 457(b) plan, consider your Roth options

Employee Plans News - Issue Number: 2012-1 – March 20, 2012

noreply@blogger.com (Aaron Juckett, ESOP Consultant) — Fri, 23 Mar 2012 12:31:00 +0000

The IRS released Employee Plans News - Issue Number: 2012-1 – March 20, 2012. It contains the following articles:

· Lifetime income options;

· Next Year’s Guidance Plan;

· EP Published Guidance;

· Time to Adopt a New Defined Benefit Plan;

· Check the Status of Your Letter;

· New (Cycle A) Alert Guidelines;

· EP Determination Letter Program Update phone forum;

· Exam Priorities…With Monika Templeman - 401(k) Plans - What Else is Going On?;

· Follow-up on Learn, Educate, Self-Correct and Enforce Projects;

· EPCU Project on Domestic Trusts Maintained By Foreign Employers;

· We’re Glad You Asked;

· How to report 2010 Roth Rollovers and Conversions;

· Governmental Plans;

· PBGC publication;

· Tax Effect of Plan Disqualification;

· New on the Web;

· Register for IRS Nationwide Tax;

· Calendar of EP Benefits Conferences;

· DOL Corner;

· PBGC Insights

Retirement News for Employers – Winter 2012 Edition

noreply@blogger.com (Aaron Juckett, ESOP Consultant) — Wed, 15 Feb 2012 13:11:00 +0000

The IRS released Retirement News for Employers – Winter 2012 Edition. It contains the following articles:

· 401(k) Questionnaire Interim Report

· Use an employee’s entire calendar-year compensation for determining employer contributions to SIMPLE IRA plans

· April 30 deadline for employers to adopt and submit determination letter applications for pre-approved defined benefit plans

· What’s a reasonable interest rate for participant loans?

· Before you take a loan from your retirement plan, there are a few rules you need to know

· Tips for Form 5558

· Using old forms may cause errors

· IRA required minimum distribution rules

· RMD rules for non-IRA plans for retiring participants over age 70½

· Saver’s Credit for 2011

· How to report 2010 Roth rollovers and conversions on your 2011 return

· EP Phone Forums

· New on the Web

· Enrolled Agent Special Enrollment Examination fee

· Renew your Preparer Tax Identification Number for 2012

· Retirement Plans News widget

· Employee Plans videos

· IRS social media tools

· Mark Your Calendar

· DOL News

Retirement News for Employers – Fall 2011 Edition

noreply@blogger.com (Aaron Juckett, ESOP Consultant) — Mon, 28 Nov 2011 11:47:00 +0000

The IRS released Retirement News for Employers – Fall 2011 Edition. It contains the following articles:

Paying Retirement Plan Benefits
Maximize your Retirement Savings in 2012
SEPs and SIMPLEs
Disaster Relief for Retirement Plans and IRAs
Exam Director discusses priorities for the current fiscal year
EPCRS Phone Forum
Join the ACT!
Forms (Revised Form 5300, Form 5558 Reminders, Form 8955-SSA FAQ)
Mark Your Calendar
DOL News

DOL Announces it will Re-Propose Rule on Definition of Fiduciary

noreply@blogger.com (Aaron Juckett, ESOP Consultant) — Wed, 21 Sep 2011 10:59:00 +0000

The DOL announced that it will re-propose its rule on the DOL Proposed Regulation – Definition of the Term "Fiduciary":

WASHINGTON – The U.S. Department of Labor's Employee Benefits Security Administration will re-propose its rule on the definition of a fiduciary. Consistent with the president's January executive order on regulation, the re-proposal is designed to inform judgments, ensure an open exchange of views and protect consumers while avoiding unjustified costs and burdens. When finalized, this important consumer protection initiative will safeguard workers who are saving for retirement as well as the businesses that provide retirement plans to America's working men and women. The decision to re-propose is in part a response to requests from the public, including members of Congress, that the agency allow an opportunity for more input on the rule.

"We have said all along that we will take the time to get this right to ensure that we provide the strongest possible protections to business owners and retirement savers in plans and IRAs," said EBSA Assistant Secretary Phyllis C. Borzi. "Investment advisers shouldn't be able to steer retirees, workers, small businesses and others into investments that benefit the advisers at the expense of their clients. The consumer's retirement security must come first."

Today's decision to re-propose means that this important consumer protection initiative will benefit from additional input, review and consideration. The agency agrees with stakeholders and lawmakers that more public input and greater research will strengthen the rule. This extended input will supplement more than 260 written public comments already received, as well as two days of open hearings and more than three dozen individual meetings with interested parties held by the agency.

Consistent with the president's executive order, the extended rulemaking process also will ensure that the public receives a full opportunity to review the agency's updated economic analysis and revisions of the rule. EBSA will continue to coordinate closely with the Securities and Exchange Commission and the Commodities Futures Trading Commission to ensure that this effort is harmonized with other ongoing rulemakings.

Specifically, the agency anticipates revising provisions of the rule including, but not restricted to, clarifying that fiduciary advice is limited to individualized advice directed to specific parties, responding to concerns about the application of the regulation to routine appraisals and clarifying the limits of the rule's application to arm's length commercial transactions, such as swap transactions.

Also anticipated are exemptions addressing concerns about the impact of the new regulation on the current fee practices of brokers and advisers, and clarifying the continued applicability of exemptions that have long been in existence that allow brokers to receive commissions in connection with mutual funds, stocks and insurance products. The agency will carefully craft new or amended exemptions that can best preserve beneficial fee practices, while at the same time protecting plan participants and individual retirement account owners from abusive practices and conflicted advice.

The agency is seeking to amend a 1975 regulation, which defines when a person providing investment advice becomes a fiduciary under the Employee Retirement Income Security Act, in order to adapt the rule to the current retirement marketplace. The proposal's goal is to ensure that potential conflicts of interest among advisers are not allowed to compromise the quality of investment advice that millions of American workers rely on, so they can retire with the dignity that they have worked hard to achieve.

The new proposed rule is expected to be issued in early 2012. Learn more about the importance of providing protections for retirement savers by visiting EBSA's website at http://www.dol.gov/ebsa/regs/cmt-1210-AB32.html.

Related Links:

IRS Announcement 2011-59 - Nonbank trustees; section 1.408-2(e) of the regulations.

noreply@blogger.com (Unknown) — Mon, 12 Sep 2011 17:30:00 +0000

This announcement contains a list of entities approved to act as nonbank trustees and nonbank custodians within the meaning of section 1.408-2(e) of the regulations. In addition, the announcement contains instructions on how errors in the list may be corrected. Announcement 2007-47 updated and superseded.

Related Links:

Announcement 2011-59

Announcement 2011-59, 2011-37 I.R.B. 335

IRS Notice 2011-67 - Weighted average interest rate update; corporate bond indices; 30-year Treasury securities; segment rates.

noreply@blogger.com (Unknown) — Mon, 22 Aug 2011 17:22:00 +0000

This notice contains updates for the corporate bond weighted average interest rate for plan years beginning in August 2011; the 24-month average segment rates; the funding transitional segment rates applicable for August 2011; and the minimum present value transitional rates for July 2011.

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IRS Notice 2011-49 - Weighted average interest rate update; corporate bond indices; 30-year Treasury securities; segment rates.

noreply@blogger.com (Unknown) — Mon, 27 Jun 2011 19:25:00 +0000

This notice contains updates for the corporate bond weighted average interest rate for plan years beginning in June 2011; the 24-month average segment rates; the funding transitional segment rates applicable for June 2011; and the minimum present value transitional rates for May 2011.

Related Links:

Employee Plans News - Issue Number: 2011-5 – June 22, 2011

noreply@blogger.com (Aaron Juckett, ESOP Consultant) — Thu, 23 Jun 2011 13:05:00 +0000

The IRS released Employee Plans News - Issue Number: 2011-5 – June 22, 2011. It contains the following articles:

2009 Form 8955-SSA and 2010 Form 5500-EZ Released

Form 5500 – Special Extensions of Time to File

Employee Plans Rulings & Agreements Priority Items

Are SEP IRA Contributions Deductible if a Return is Filed Late?

How Do You Calculate a Participant's Required Minimum Distribution from a Defined Contribution Plan?

Form 5300 Applications for Employee Stock Ownership Plans

Completing a Power of Attorney Form for Form 5330

Employee Plans Compliance Unit's New Projects

What's on the Employee Plans Compliance Unit's Radar Screen

Ethics Phone Forum for Employee Plans Practitioners

Tax Relief in Disaster Situations Advisory Committee on TE/GE

Visit the IRS Video Portal for Archived Presentations

Share this Newsletter

New and Updated Forms and Publications

DOL Corner

PBGC Insights

EP Published Guidance

Calendar of EP Benefits Conferences

IRS Notice 2011-33 - Weighted average interest rate update; corporate bond indices; 30-year Treasury securities; segment rates.

noreply@blogger.com (Unknown) — Mon, 09 May 2011 19:14:00 +0000

This notice contains updates for the corporate bond weighted average interest rate for plan years beginning in April 2011; the 24-month average segment rates; the funding transitional segment rates applicable for April 2011; and the minimum present value transitional rates for March 2011.

Related Links:

IRS Notice 2011-22 - Weighted average interest rate update; corporate bond indices; 30-year Treasury securities; segment rates.

noreply@blogger.com (Unknown) — Mon, 28 Mar 2011 15:21:00 +0000

This notice contains updates for the corporate bond weighted average interest rate for plan years beginning in March 2011; the 24-month average segment rates; the funding transitional segment rates applicable for March 2011; and the minimum present value transitional rates for February 2011.

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IRS Announcement 2011-21 - Replacement of Schedule SSA (Form 5500) with Form 8955-SSA

noreply@blogger.com (Unknown) — Mon, 21 Mar 2011 15:14:00 +0000

This announcement designates Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits, as the form to be used to satisfy the reporting requirements of section 6057(a) of the Code for plan years beginning on or after January 1, 2009, and sets forth the due dates for filing the Form 8955-SSA for the 2009 plan year and subsequent plan years.

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IRS Revenue Ruling 2011-7 - Section 403(b) plan termination

noreply@blogger.com (Unknown) — Mon, 07 Mar 2011 16:02:00 +0000

Final regulations under section 403(b) of the Code were published in 2007. Under the regulations a section 403(b) plan is permitted to contain provisions that provide for plan termination and that allow accumulated benefits to be distributed on termination. This ruling provides guidance clarifying how the section 403(b) plan termination provisions apply.

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IRS Notice 2011-19 - Definition of Readily Tradable On An Established Securities Market.

noreply@blogger.com (Aaron Juckett, ESOP Consultant) — Mon, 28 Feb 2011 20:38:00 +0000

This notice provides guidance regarding when securities of the employer are readily tradable on an established securities market or readily tradable on an established market for purposes of certain provisions of the Internal Revenue Code relating to employer securities held by certain qualified retirement plans.

Related Links:

IRS Notice 2011-19
IRS Notice 2011-19, 2011- I.R.B.

Part III –Administrative, Procedural and Miscellaneous

Definition of Readily Tradable On An Established Securities Market

Notice 2011-19

Purpose

Background

Section 4975(e)(7) defines an employee stock ownership plan (ESOP) as a defined contribution plan (1) which is a stock bonus plan which is qualified under § 401(a), or a stock bonus and a money purchase plan both of which are qualified under § 401(a), and which are designed to invest primarily in qualifying employer securities as defined in §4975(e)(8), and (2) which is otherwise defined in regulations prescribed by the Secretary. Section 4975(e)(7) also states that an employee stock ownership plan must satisfy certain requirements in §409, including the requirements of § 409(h). In addition, §401(a)(23) generally provides that a stock bonus plan is not a qualified plan under §401(a) unless the plan meets certain requirements, including the requirements of §409(h).

Section 401(a)(22) generally provides that a defined contribution plan (other than a profit sharing plan) must meet the requirements of §409(e) (which relates to passthrough of voting rights) if it is established by an employer whose stock is not readily tradable on an established market, and after acquiring securities of the employer, more than 10 percent of the total assets of the plan are securities of the employer.

Section 409(h) provides generally that a plan satisfies the requirements of §409(h) if the plan offers a participant who is entitled to a distribution the right to demand payment in the form of employer securities and, if the employer securities are not readily tradable on an established market, the participant must also have the right to require that the employer repurchase the employer securities under a fair valuation formula (put option).

Section 401(a)(35)(A) provides that a trust which is part of an applicable defined contribution plan is not a qualified trust under §401(a) unless the plan satisfies certain diversification requirements set forth in §401(a)(35)(B), (C), and (D). Subject to certain exceptions, an applicable defined contribution plan under §401(a)(35) is a defined contribution plan that holds any publicly traded employer securities. A publicly traded employer security is defined in §401(a)(35)(G)(v) as an employer security under section 407(d)(1) of ERISA which is readily tradable on an established securities market.

Section 401(a)(28) provides that an ESOP, and a tax credit employee stock ownership plan under §409(a), is not a qualified plan under §401(a) unless the plan meets the requirements of §401(a)(28)(B) and (C). Section 401(a)(28)(B) imposes certain diversification requirements with respect to certain participants. Section 401(a)(28)(B) was amended by the Pension Protection Act of 2006, Pub. L. 109-280, 120 Stat. 780 (PPA '06) to not apply to a plan to which §401(a)(35) applies. For employer securities that are not readily tradable on an established securities market, §401(a)(28)(C) requires all valuations with respect to activities carried on by the plan to be made by an independent appraiser that meets requirements similar to the requirements of regulations under §170(a)(1).

Section 404(k) generally permits an income tax deduction for the amount of any applicable dividend paid in cash by a C corporation with respect to applicable employer securities. For this purpose, applicable employer securities are generally defined to mean employer securities as defined in §409(l) held by an ESOP.

Section 4975(e)(8), as amended by the Technical Corrections Act of 1979, P.L. 96-22 (1980), provides that qualifying employer securities must meet the definition set forth in §409(l). Section 409(l)(1) defines employer securities as common stock issued by the employer (or by a corporation that is a member of the same controlled group) which is readily tradable on an established securities market and provides special rules for an employer that has no class of stock which is readily tradable on an established securities market. In the absence of any guidance of general applicability, some plans may have applied the definition of "publicly traded" at §54.4975-7(b)(1)(iv) of the Excise Tax Regulations (issued before enactment of the Technical Corrections Act of 1979) to determine whether employer securities are readily tradable on an established securities market within the meaning of §409(l)(1).

Section 1042 generally provides that, if the taxpayer or executor so elects, gain on the sale of qualified employer securities which would be recognized as long-term capital gain is recognized only to the extent the gain exceeds the cost of qualified replacement property acquired within the replacement period. This treatment applies only if the sale is to an ESOP or eligible worker-owned cooperative that holds at least 30 percent of the corporation's stock after the sale, and various other conditions in §1042(b) are satisfied. In addition, under §1042(c), the only securities eligible for this treatment are employer securities defined under §409(l) and issued by a domestic C corporation that has no stock outstanding that is readily tradable on an established securities market.

Final regulations under §401(a)(35) were issued on May 18, 2010 (75 FR 27927). Under §1.401(a)(35)-1(f)(5), a security is readily tradable on an established securities market if the security is traded on a national securities exchange that is registered under section 6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f). The regulations also treat a security as readily tradable on an established securities market if the security is traded on a foreign national securities exchange that is officially recognized, sanctioned, or supervised by a governmental authority and where the security is deemed by the Securities and Exchange Commission (SEC) as having a ready market under SEC Rule 15c3-1 (17 CFR 240.15c3-1). Under the current SEC rules, a security that is included on the FTSE Group (FTSE) All-World Index is deemed to have a ready market. Section 1.401(a)(35)-1 is effective for plan years beginning on or after January 1, 2011.

Readily tradable on an established securities market or established market

Under this notice, the terms readily tradable on an established securities market and readily tradable on an established market, with respect to employer securities, each mean employer securities that are readily tradable on an established securities market within the meaning of §1.401(a)(35)-1(f)(5) for purposes of the following provisions: (1) §401(a)(22); (2) §401(a)(28)(C); (3) §409(h)(1)(B); (4) §409(l); and (5) § 1042(c)(1)(A).

Effective Date

This notice is effective for plan years beginning on or after January 1, 2012. However, this notice is not effective until plan years beginning on or after January 1, 2013 for any plan that is sponsored by an employer with respect to which, on March 14, 2011, neither the employer nor any member of its controlled group (within the meaning of § 409(l)) has any common stock that is readily tradable on an established securities market within the meaning of §1.401(a)(35)-(1)(f)(5)(A) (relating to securities that are traded on a national securities exchange that is registered under section 6 of the Securities Exchange Act of 1934), but the employer or a member of its controlled group has common stock that is readily tradable on an established securities market within the meaning of §1.401(a)(35)-(1)(f)(5)(B) (relating to securities that are traded on a foreign national securities exchange that is officially recognized, sanctioned, or supervised by a governmental authority
and is deemed by the SEC as having a "ready market" under SEC Rule 15c3-1, within the meaning of §1.401(a)(35)-(1)(f)(5)(B)). Taxpayers (including any employer sponsoring a plan described in the preceding sentence) can rely on this notice for periods after March 14, 2011.

Drafting Information:

The principal author of this notice is Robert Gertner of the Employee Plans, Tax Exempt and Government Entities Division. For further information regarding this notice, please contact the Employee Plans taxpayer assistance answering service at 1-877-829-5500 (a toll-free number) or e-mail Mr. Gertner at RetirementPlanQuestions@irs.gov.

IRS Notice 2011-13 - Weighted average interest rate update; corporate bond indices; 30-year Treasury securities; segment rates.

noreply@blogger.com (Unknown) — Mon, 28 Feb 2011 15:13:00 +0000

This notice contains updates for the corporate bond weighted average interest rate for plan years beginning in February 2011; the 24-month average segment rates; the funding transitional segment rates applicable for February 2011; and the minimum present value transitional rates for January 2011.

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Announcement 2011-16 - Correction to Revenue Ruling 2011-3 — 2011 covered compensation tables; permitted disparity

noreply@blogger.com (Unknown) — Mon, 14 Feb 2011 16:12:00 +0000

Revenue Ruling 2011-3 as it appears in the Internal Revenue Bulletin (IRB) that was published on January 24, 2011 (2011-4 I.R.B. 326) contains a typographical error in Attachment I. Revenue Ruling 2011-3 as it appears in the IRB has been corrected.

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Electronic Payment of Retirement Plan Withholding through EFTPS

noreply@blogger.com (Unknown) — Fri, 11 Feb 2011 17:54:00 +0000

Beginning in 2011, the Financial Management Service (FMS), a Bureau of the Treasury Department, is eliminating the system that enabled the processing of Federal Tax Deposit Coupons (Form 8109). Accordingly, beginning January 1, 2011, all deposits must be made using the Electronic Federal Tax Payment System (EFTPS). This includes federal tax withholding on retirement plan distributions.The Electronic Federal Tax Payment System (EFTPS) is a free service from the U.S. Department of the Treasury. This system allows the taxpayer to schedule payments over the Internet or by phone. Plans with less than $2,500 of federal tax withholding on an annual basis can continue to make their payment to the IRS when filing the Form 945, but penalties may be assessed if the withholding amounts exceeds the $2,500 limit.

The time for depositing the withheld taxes has not changed. Monthly depositors have 15 days after the close of the calendar month in which the tax was withheld. If the deposit will be made with Form 945, the form and payment are due January 31st.

Plan sponsors may receive a letter from the IRS regarding the EFTPS process and provides them the PIN needed to activate the plan's enrollment in EFTPS. Plan sponsors can also apply for EFTPS by calling 800-555-4477 or enrolling online at www.eftps.gov.

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Announcement 2011-8

noreply@blogger.com (Unknown) — Mon, 31 Jan 2011 16:02:00 +0000

This announcement contains a correction to Revenue Procedure 2011-8, 2011-1 I.R.B. 237, which contains an error in the user fee schedule that applies to a non-mass submitter of a master or prototype (M&P) plan. Rev. Proc. 2011-8 corrected.

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Notice 2011-7 - Weighted average interest rate update; corporate bond indices; 30-year Treasury securities; segment rates

noreply@blogger.com (Unknown) — Mon, 31 Jan 2011 15:55:00 +0000

This notice contains updates for the corporate bond weighted average interest rate for plan years beginning in January 2011; the 24-month average segment rates; the funding transitional segment rates applicable for January 2011; and the minimum present value transitional rates for December 2010.

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Rev. Rul. 2011-3 - 2011 covered compensation tables; permitted disparity

noreply@blogger.com (Unknown) — Mon, 24 Jan 2011 15:47:00 +0000

The covered compensation tables under section 401 of the Code for the year 2011 are provided for use in determining contributions to defined benefit plans and permitted disparity.

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Retirement News for Employers – January 12, 2011 Special Edition

noreply@blogger.com (Aaron Juckett, ESOP Consultant) — Mon, 17 Jan 2011 14:12:00 +0000

The IRS released Retirement News for Employers – January 12, 2011 Special Edition. It contains the following articles:

Qualified Charitable Distributions for 2010 and 2011
New Requirements for Tax Return Preparers

Employee Plans News - Issue Number: 2011-1 – January 12, 2011

noreply@blogger.com (Aaron Juckett, ESOP Consultant) — Mon, 17 Jan 2011 14:10:00 +0000

The IRS released Employee Plans News - Issue Number: 2011-1 – November 26, 2010. It contains the following articles:

Qualified Charitable Distributions for 2010 and 2011
New Requirements for Tax Return Preparers
Exclusive Benefit Rule for Governmental Plans Participating in Group Trusts
Upcoming Correction on User Fees

Notice 2011-3 - Funding Relief for Single-Employer Pension Plans under PRA 2010

noreply@blogger.com (Unknown) — Mon, 10 Jan 2011 17:13:00 +0000

Special rules relating to funding relief for single-employer pension plans under PRA 2010. This notice provides guidance on the special rules relating to funding relief for single-employer defined benefit pension plans (including multiple employer defined benefit pension plans) under the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (PRA 2010).

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Notice 2011-2 - Guidance on the Application of Section 162(m)(6)

noreply@blogger.com (Unknown) — Mon, 10 Jan 2011 17:08:00 +0000

This notice provides guidance on the application of section 162(m)(6) of the Code. Section 162(m)(6) limits the allowable deduction for remuneration for services provided by individuals to certain health insurance providers. Section 162(m)(6) was enacted as part of the Patient Protection and Affordable Care Act (2010).

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Notice 2011-1 - Affordable Care Act Nondiscrimination Provisions Applicable to Insured Group Health Plans

noreply@blogger.com (Unknown) — Mon, 10 Jan 2011 16:56:00 +0000

This notice addresses the timing of the application of the Affordable Care Act provisions prohibiting insured group health plans from discriminating in favor of highly compensated individuals. It states that the Treasury Department and the IRS, as well as the Departments of Labor and Health and Human Services, have determined that compliance with these requirements should not be required (and thus, any sanctions for failure to comply do not apply) until after regulations or other administrative guidance of general applicability has been issued. The notice includes a request for public comments.

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