ERISA Rules and Regulations

EBSA issues additional guidance on 2009 Form 5500 Schedule C

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Fri, 23 Oct 2009 18:15:00 +0000

The DOL announced the issuance of additional guidance on Schedule C reporting for 2009 Form 5500:

Washington – The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) today released additional guidance to help plan administrators and service providers comply with the expanded requirements for reporting service provider fee and compensation information on the Form 5500 Annual Returns/Reports. The expanded requirements apply for plan years beginning on or after January 1, 2009.

The new guidance is provided in the form of 25 frequently asked questions (FAQs) on the new Schedule C requirements. Some of the issues covered in the new FAQs include reporting of:

Gifts, entertainment and other non-monetary compensation
Compensation to hedge fund investment managers
"Look-through" investment funds
Mutual fund redemption fees
ERISA fee recapture accounts

Today's FAQs also provide clarification regarding the 2009 plan year transition relief for service providers by explaining that the transition relief also covers plan administrators and Form 5500 preparers who rely on those service providers for information needed to complete the Schedule C. The details about the transition relief were explained in an earlier set of FAQs released in July 2008.

The new FAQs are available on EBSA's Web site at www.dol.gov/ebsa. Questions for the FAQs were developed based on feedback from the employee benefit community. The new FAQs supplement previous guidance FAQs on the Form 5500 Schedule C published in July 2008.

Supplemental FAQs About The 2009 Schedule C

What is the purpose of this FAQ guidance?
Are promotional gifts of little intrinsic value such as a coffee mug, calendar, greeting cards, plaques, certificates, trophies or similar items intended solely for the purpose of presentation and displaying a company logo, reportable Schedule C indirect compensation to the recipient?
Are all free business meals and entertainment received by persons who have business relationships with ERISA plans indirect compensation to the recipient for purposes of Schedule C?
An entity that provides services to employee benefit plans conducts educational conferences designed to educate and explain employee benefit issues and products at no cost to employee pension or welfare plan personnel (e.g., plan sponsor's human resources staff and finance personnel). In holding the conference, the entity provides conference rooms, speakers, audio-visual equipment, and refreshments during conference breaks, meals, travel, and lodging. Do all of those expenses have to be reported as non-monetary compensation?
In the context of a plan's investment in a "look-through" investment fund is Schedule C reporting required for fees received by persons at the lower tier funds?
For purposes of reporting indirect compensation on Schedule C, must a limited partnership hedge fund that is not holding plan assets pursuant to the "less than 25% benefit plan investor exception" under section 3(42) of ERISA be treated as an investment fund?
Can mutual fund 12b-1 fees, sub-transfer agent fees, and shareholder servicing fees received by a retirement plan record keeper be classified as eligible indirect compensation for purposes of the Schedule C alternative reporting option, regardless of whether such fees were received from a mutual fund agent or directly from a mutual fund?
Revenue sharing payments often travel through the hands of several different service providers before getting to their ultimate intended recipient in a "chain" of plan service providers. Does only the ultimate recipient of the compensation need to be identified as having received the compensation?
Are costs and expenses incurred by an insurance company in connection with a general account investment contract that promises a guaranteed rate of return reportable compensation for purposes of the Schedule C?
The July 2008 guidance in FAQ 40 provides limited transition relief where a service provider makes reasonable, good faith efforts to develop systems to track information regarding its reportable indirect compensation in a timely fashion but, despite such efforts, is unable to collect the necessary information for the 2009 plan year reports. Will the Department reject the Form 5500 or impose penalties if the Schedule C does not include information that was not provided to the plan administrator or the plan's Form 5500 preparer by a service provider that gives the plan administrator the statement described in Q40?
Are "contingent deferred sales charges," market value adjustments for annuity contracts, or surrender/termination charges reportable compensation and if so, are they to be reported as direct or indirect compensation?
Some mutual funds have imposed short-term trading fees as a result of SEC Rule 22c-2. These are commonly known in the industry as "redemption fees." Other investment products (collective trust funds, separate accounts, etc.) may impose similar fees to curb short-term trading. Such fees are generally assessed when a participant transfers out of an investment fund within a certain timeframe (often 30-60 days) after investment in the fund. The fees flow back into the fund, trust, or account through a reporting and remittance process developed between the record keeper or intermediary and the fund or investment company. Should these fees be reported as redemption fees using code 57 on Schedule C as direct compensation to the fund company?
Record keepers may receive revenue sharing payments from fund companies in the form of shareholder servicing fees. In some cases, the plan and the record keeper may agree to an "ERISA fee recapture account" where the revenue sharing exceeds a fee level negotiated between the record keeper and the plan sponsor. How are the following two common approaches treated for Schedule C purposes?
any recordkeeping service arrangements apply some portion of a shareholder servicing fee charged by an investment fund in which its client plans invest toward the payment of the record keeper's fees. In cases where such revenue sharing payments from the investment fund do not cover the full amount of the record keeper fee, an additional direct payment is made by the plan to the record keeper to cover the total recordkeeping fee. Under such circumstances, can part of the recordkeeping fee be reported as indirect compensation and part direct compensation for purposes of Schedule C reporting?
If plan service providers or plan administrators make a good faith attempt to classify their services and the fees they receive using the codes in the Schedule C instructions, will the Department reject Form 5500s in 2009 due to inadvertent misclassifications?
Provider A has an "alliance" with Provider B. Provider B has developed a program to assist participants in fund selection. Provider A pays Provider B a flat fee of $20,000 to have access to the Provider B program, regardless of whether any of Provider A's plan clients use it. Plan Z pays a direct fee to Provider A of $5,000 that allows Plan Z participants to access Provider B's service. Provider A shares $1,000 with Provider B.
By what date must the disclosure materials necessary to satisfy the "written disclosures" requirement for treating indirect compensation as eligible indirect compensation be presented to the plan administrator?
If it is difficult to ascertain the Employer Identification Number (EIN) for some service providers that are part of a group of affiliated companies, would it be sufficient to provide the EIN of a "parent" company?
May reporting of fees and expenses for plans with assets invested in a Master Trust Investment Account (MTIA) be reported on the Form 5500 filing for the MTIA rather than the Form 5500 filing for each plan involved?
If a trade confirm is sent to the plan or to the participant with each participant directed trade made through a 401(k) plan brokerage window, does that meet the requirements of the eligible indirect compensation rule that requires disclosure to the plan administrator?
If a broker identifies, for each plan with respect to which it receives 12b-1 fees, shareholder service fees, subtransfer agency fees charged against an investment fund and reflected in the value of the plan's investment, the name of each fund and range of payments it receives: (e.g. "from all these funds we get between 25 and 45 basis points and/or up to 15 dollars per position") will that satisfy the disclosure requirements for the eligible indirect compensation alternative reporting option?
If an investment advisor has a standard disclosure on soft dollar compensation that meets the requirements of the securities laws, but would not meet the requirements of the alternative reporting option for eligible indirect compensation because it does not provide estimates or descriptions of eligibility criteria or the names of the brokers paying the soft dollar compensation, do additional disclosures need to be provided?
Are group health plans and other welfare benefit plans that are required to file a Schedule C subject to the indirect compensation reporting requirements?
In the health plan context, and specifically with regard to health care claims, what fees will be considered as charged on a per transaction basis?
Assume that a plan sponsor pays all direct expenses relating to the administration and funding of benefits of an unfunded, self-insured welfare plan, such as the third-party claims administration expenses under an employer-pay-all disability plan. No plan assets are used to pay any direct expenses, nor are plan assets used to reimburse the plan sponsor for the payment of direct expenses. Would revenue sharing payments among the plan's service providers be required to be reported on a Schedule C?

Related Links:

Employee Plans News - Special Edition, October 2009

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Tue, 13 Oct 2009 21:13:00 +0000

The IRS published Employee Plans News - Special Edition, October 2009:

Final Funding Regulations and Benefit Restriction Notices for Single Employer Defined Benefit Plans; Phone Forum on Retirement Plan Distributions - October 28, 2009

This Special Edition covers the final regulations on the measurement of assets and liabilities for pension funding, benefit restrictions for underfunded pension plans, benefit restriction notices and more.

IRS Notice 2009-82 – Guidance on 2009 Required Minimum Distributions

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Tue, 13 Oct 2009 19:04:00 +0000

Part III --- Administrative, Miscellaneous, and Procedural

IRS Notice 2009-82 – Guidance on 2009 Required Minimum Distributions

Guidance on 2009 required minimum distributions. This notice provides guidance and transition relief relating to the waiver of 2009 required minimum distributions, described in section 401(a)(9) of the Code, from certain plans under the Worker, Retiree, and Employer Recovery Act of 2008 ("WRERA"), P.L. 110-458. The notice also provides two sample plan amendments that give recipients a choice as to whether to receive waived required minimum distributions and certain related payments and that specify the application of the direct rollover rules to the distributions. The sample amendments can be used by plan sponsors that are uncertain as to the treatment under plan terms of waived required minimum distributions and certain related payments or that otherwise desire to give recipients a choice as to whether to receive such distributions. Notice 2007-7 modified.

Notice 2009-82 explains that those who have received a 2009 required minimum distribution have until the later of Nov. 30 2009, or 60 days after the date the distribution was received to roll it over. The notice also provides guidance for retirement plan sponsors.

Waived Required Minimum Distributions for 2009
WASHINGTON ― The Internal Revenue Service today provided guidance for retirement plan administrators, plan participants and retirees regarding recent legislation affecting required minimum distributions. The Worker, Retiree, and Employer Recovery Act of 2008 waives required minimum distributions for 2009 from certain retirement plans.
Generally, a required minimum distribution is the smallest annual amount that must be withdrawn from an IRA or an employer’s plan beginning with the year the account owner reaches age 70½. The 2008 law waives required minimum distributions for 2009 for IRSs and defined contribution plans (such as 401(k)s) and allows certain amounts distributed as 2009 required minimum distributions to be rolled over into an IRA or another retirement plan.
Notice 2009-82 provides relief for people who have already received a 2009 required minimum distribution this year. Individuals generally have until the later of Nov. 30, 2009, or 60 days after the date the distribution was received, to roll over the distribution.
The notice also provides guidance for retirement plan sponsors. It contains two sample plan amendments that plan sponsors may adopt or use to amend their plans to either stop or continue 2009 required minimum distributions. Both sample amendments provide that participants and beneficiaries can choose to receive or not to receive 2009 required minimum distributions. Also, both sample amendments allow the employer to offer direct rollover options of certain 2009 required minimum distributions.
Plan sponsors may need to tailor the sample amendment to their plan’s particular terms and administration procedures and must adopt the amendment no later than the last day of the first plan year beginning on or after Jan. 1, 2011 (Jan. 1, 2012 for governmental plans).
IRS Provides 2009 RMD Guidance discusses how the Notice defined two new terms:
2009 RMDs. These are Required Minimum Distributions which a plan would have been required to distribute (or an IRA owner or beneficiary would have been required to take), if Congress had not adopted WRERA. It includes all RMDs for the 2009 distribution calendar year, including those which could otherwise be distributed as late as April 1, 2010.

Extended 2009 RMDs. These are one or more payments in a series of substantially equal distributions (that include the 2009 RMDs) made at least annually and expected to last for the life/life expectancy of the participant, or the joint lives/life expectancy of the participant and a designated beneficiary, or for a period of at least 10 years. This definition is significant because an individual cannot normally roll over one or more of a series of substantially equal distributions, as described in the previous sentence, whether or not those distributions are RMDs. For example, if a plan distributes a participant’s benefit in 15 equal annual installments, the distributions are not eligible rollover distributions (ERDs), without regard to the RMD rules.
RMD Guidance Issued by the IRS for 2009 highlights a Q&A section that addressed issues from the public:
The deadline for an employee or a beneficiary that had until the end of 2009 to choose between receiving distributions under the 5-year or the life expectancy rule is extended until the end of 2010.

In plans that permit a nonspouse designated beneficiary to directly roll over a deceased participant’s account balance, the special rule in Notice 2007-7 is modified so that, if the employee died in 2008, the nonspouse designated beneficiary has until the end of 2010 to make the direct rollover and use the life expectancy rule.

Only for 2009, if an individual receives a plan distribution that includes a 2009 RMD, the portion of the distribution that represents the 2009 waived RMD is subject to the optional 10% withholding rules under §3405(b) and any remaining portion is subject to the 20% mandatory withholding rule of §3405(c) (assuming the distribution otherwise qualifies as an ERD). Any distributions made in 2009 are deemed to consist first of any undistributed RMDs from prior years followed by 2009 RMDs.

Related Links:

DOL Notice of Proposed Individual Exemption Involving Chrysler LLC, Located in Auburn Hills, MI

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Mon, 05 Oct 2009 11:48:00 +0000

The DOL announced a proposed exemption to allow a Chrysler LLC health plan for retirees to acquire company securities:

Washington – The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) today announced a proposed exemption that, if granted, would allow the New Chrysler Corp. to transfer approximately $4.59 billion promissory note and company securities to a Voluntary Employees Benefit Association (VEBA) Plan established to provide health benefits for the company's retirees. The retiree health plan would cover about 120,000 retirees and dependents when it becomes effective on Jan. 1, 2010.

New Chrysler requested an exemption under the Employee Retirement Income Security Act (ERISA) to allow the VEBA plan to hold stock and debt of New Chrysler in order to facilitate the sale of the company to Fiat North America LLC. ERISA prohibits certain plans from holding large percentages of plan assets in the form of employer securities. The law gives the department authority, however, to grant exemptions that protect the interests of plan participants and beneficiaries.

On May 31, 2009, the bankruptcy court issued an opinion allowing old Chrysler to sell substantially all of its assets to New Chrysler. New Chrysler is headquartered in Auburn Hills, Mich., and employs 55,000 employees. New Chrysler is owned by the Canadian Government, the U.S. Treasury, Fiat and the VEBA plan.

The exemption would allow the securities transfer, permit New Chrysler and its health plans to reimburse each other for benefit payments mistakenly paid by the wrong entity during the transition to the new plan, and permit the automaker to recover mistaken deposits to the plan.

The assets of the VEBA plan will be held by the same trust that holds the assets of the plans established by Ford and General Motors for their respective retirees. There will be separate accounting for each plan maintained by the three companies that are now funded through a single trust.

The primary condition of the proposal is the appointment of an independent fiduciary to represent the plan with regard to New Chrysler securities transactions. The independent fiduciary will determine in advance of taking any action regarding the securities that the action is in the interests of the plan and its participants and beneficiaries. The proposed exemption also requires the review of benefit payments by an independent third party administrator and auditor for each of the plans and an objective dispute resolution process. In addition, the proposal sets time limits for the return of mistaken deposits and an objective dispute resolution process.

The proposed exemption is scheduled to be published in the Oct. 5, 2009, edition of the Federal Register. Comments on the proposal and any requests for a public hearing should be submitted to Chrysler@dol.gov or by fax to 202-219-0204. Paper-based comments should be sent to the Office of Exemption Determinations, Employee Benefits Security Administration, Room N-5700, U.S. Department of Labor, 200 Constitution Ave. N.W., Washington, D.C. 20210, Attention: Application Number L-11566.

Related Links:

IRS Notice 2009-68 – Safe Harbor Explanation — Eligible Rollover Distributions

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Mon, 28 Sep 2009 12:56:00 +0000

Part III --- Administrative, Miscellaneous, and Procedural

IRS Notice 2009-68 – Safe Harbor Explanation — Eligible Rollover Distributions

Safe harbor explanations — eligible rollover distributions. This notice contains two safe harbor explanations that may be provided to recipients of eligible rollover distributions from an employer plan in order to satisfy section 402(f) of the Code. The first safe harbor explanation applies to a distribution not from a designated Roth account, as described in section 402A. The second safe harbor explanation applies to a distribution from a designated Roth account. These safe harbor explanations update the safe harbor explanations that were published in Notice 2002-3, 2002-1 C.B. 289, to reflect changes in the law. This notice is part of the "Savings Initiative" guidance issued by the Service. Notice 2002-3 modified and superseded.

Related Links:

Employee Plans News - Special Edition, September 25, 2009

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Fri, 25 Sep 2009 21:00:00 +0000

The IRS published Employee Plans News - Special Edition, September 25, 2009:

Upcoming Funding Regulations; Additional Guidance on 2009 Waiver of Required Minimum Distributions

This Special Edition of Employee Plans News contains the following articles:

Upcoming Funding Regulations - states that the IRS and the Department of Treasury expect to issue final regulations in the near future that will cover measurement of assets and liabilities under §430, and the application of benefit restrictions of §436 for single-employer defined benefit plans. It also provides assistance to actuaries in issuing the adjusted funding target attainment percentage (AFTAP) for 2009.
Additional Guidance on 2009 Waiver of Required Minimum Distributions – explains key provisions of Notice 2009-82, issued on September 24, 2009, that provides guidance, transitional relief, sample plan amendments and answers to questions related to the waiver of 2009 required minimum distributions.

Employee Plans News - Fall 2009 Edition

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Wed, 23 Sep 2009 21:03:00 +0000

The IRS released Employee Plans News - Fall 2009 Edition. It contains the following articles:

Dos and Don'ts of Hardship Distributions;
IRS Retirement Plans Online;
When Limits Collide, Which One Wins?;
Tax Return Preparer Review Board; Critical Priorities…With Monika Templeman Today's Discussion: Loans and Hardships in 401(k) Plans;
A Message from the Advisory Committee on Tax Exempt and Government Entities: Stakeholders: please participate!;
Employee Plans Published Guidance;
401(k) Phone Forum Rescheduled to September 30, 2009;
We're Glad You Asked!;
Ways to Avoid Delays: Determination Letter Application Processing Procedures;
Retirement & Savings Initiatives: Helping Americans Save for the Future;
The EPCU Insider - Master & Prototype (M&P) Project;
Highlights of the Retirement News for Employers;
PBGC Insights;
DOL Corner;
Calendar of EP Benefits Conferences

DOL Notice of Proposed Individual Exemption Involving General Motors

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Fri, 18 Sep 2009 13:05:00 +0000

The DOL announced a proposed exemption to allow a General Motors health plan for retirees to acquire company securities:

WASHINGTON — The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) today announced a proposed exemption that, if granted, would allow the General Motors Co. (GM) to transfer company securities including common stock, preferred stock and a $2.5 billion promissory note, to a health plan established for the company's retirees. The retiree health plan will cover approximately 700,000 retirees and dependents when it becomes effective on Dec. 31, 2009.

GM is the successor company that purchased substantially all of the assets of General Motors Corp. (the old GM), which filed for bankruptcy on June 1, 2009. GM is headquartered in Detroit, Mich.

The large transfer of employer securities to the plan violates the Employee Retirement Income Security Act (ERISA). ERISA prohibits certain plans from holding large percentages of plan assets in the form of employer securities. The law gives the department authority, however, to grant exemptions that protect the interests of plan participants and beneficiaries.

The exemption would allow the securities transfer, permit GM and its health plans to reimburse each other for benefit payments mistakenly paid by the wrong entity during the transition to the new plan, and permit GM to recover mistaken deposits to the plan.

A major condition of the proposal is the appointment of an independent fiduciary to represent the plan with regard to GM securities transactions. The independent fiduciary will determine in advance of taking any action regarding the securities that the action is in the interests of the plan and its participants and beneficiaries. The proposed exemption also requires the review of benefit payments by an independent third party administrator and auditor for each of the plans and an objective dispute resolution process. In addition, the proposal set time limits for return of mistaken deposits and an objective dispute resolution process.

The proposed exemption is scheduled to be published in the Sept. 18, 2009, edition of the Federal Register. Comments on the proposal and any requests for a public hearing should be submitted to gm@dol.gov or by fax to 202-219-0204. Paper-based comments should be sent to the Office of Exemption Determinations, Employee Benefits Security Administration, Room N-5700, U.S. Department of Labor, 200 Constitution Ave. N.W., Washington, D.C. 20210, Attention: Application Number L-11568.

Related Links:

Retirement News for Employers - Special Edition, September 2009

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Wed, 09 Sep 2009 21:18:00 +0000

The IRS published Retirement News for Employers - Special Edition, September 2009:

This Special Edition discusses the release of Notice 2009-3 which extends the deadline for 403(b) plan sponsors to adopt new written plans or amend their existing written plans from January 1, 2009, to December 31, 2009.

This special edition discusses the Retirement & Savings Initiatives, Rollovers From Employer Plans to Roth IRAs, the IRS Retirement Plans Navigator and Life Events That Can Affect Retirement Savings.

Employee Plans News - Special Edition, September 2009

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Wed, 09 Sep 2009 20:59:00 +0000

The IRS published Employee Plans News - Special Edition, September 2009:

Retirement & Savings Initiatives: Helping Americans Save for the Future; Rollovers from Employer Plans to Roth IRAs; Now Online

Retirement News for Employers – Summer 2009 Edition

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Tue, 18 Aug 2009 00:54:00 +0000

The IRS released Retirement News for Employers – Summer 2009 Edition. It contains the following articles:

7 Steps to Making a Hardship Distribution
Know the Rules Before You Break Open Your Retirement Piggy Bank
Tax Return Preparer Review Held July 30, 2009
New on the Web
SIMPLE IRA Plans: The 2-Year Rule on Early Distributions
Fixing Common Plan Mistakes: Correcting a Failure to Implement the Plan's Automatic Enrollment Provisions
Employee Plans Published Guidance
Desk Side Chat...With Monika Templeman - ABCs of Loans and Hardship Distributions
We're Glad You Asked!
DOL Corner
2009 RMDs from Defined Benefit Plans?
Mark Your Calendar
Timing Is Everything Flyer.

Employee Plans News - Summer 2009 Edition

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Tue, 23 Jun 2009 20:48:00 +0000

The IRS released Employee Plans News - Summer 2009 Edition. It contains the following articles:

EP Connections:
Interview with Sarah Hall Ingram;
ACT Issues Eighth Annual Report and Welcomes Ten New Members;
Two-Year Adoption/Submission Period for DC Pre-Approved Plans Expires on April 30, 2010;
The EPCU Insider;
New Federal Income Tax Withholding for Pensions;
Free Phone Forums;
A New Look for EP Large Case Program Web Page;
Web Spins - The Retirement Plans Site;
We're Glad You Asked!;
PBGC Insights;
The Corner of Forms & Pubs;
Employee Plans Published Guidance;
Highlights of the Retirement News for Employers;
DOL Corner;
Calendar of EP Benefits Conferences

Retirement News for Employers – Spring 2009 Edition

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Wed, 20 May 2009 00:53:00 +0000

The IRS released Retirement News for Employers – Spring 2009 Edition. It contains the following articles:

Do You Have a Safe Harbor 401(k) Plan? Ahhh…Relief
New Federal Income Tax Withholding for Pensions
We're Glad You Asked!
Like What You are Reading?
Information Reporting Program Advisory Committee Is Looking for New Members
EPCRS Phone Forum – July 27, 2009
e-News for Small Businesses: A Time-Saver for You
Desk Side Chat…With Monika Templeman – Automatic Enrollment
Employee Plans Published Guidance
New on the Web
DOL News
Notice of Approval to Extend Form 5500 Filing
Mark Your Calendar
Timing Is Everything Flyer

Employee Plans News - Special Edition, May 2009

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Tue, 19 May 2009 20:46:00 +0000

The IRS published Employee Plans News - Special Edition, May 2009:

Do You Have a Safe Harbor 401(k) Plan? Ahhh…Relief; New Federal Income Tax Withholding for Pensions

This Special Edition discusses the IRS proposed amendments, Suspension or Reduction of Safe Harbor Nonelective Contributions, published on May 18, 2009 and the optional federal income tax withholding procedures that can be used for pension income.

Related Links:

Treasury Regulation [REG–115699–09] – Suspension or Reduction of Safe Harbor Nonelective Contributions
More Analysis of the Proposed Regulations to Suspend Safe Harbor Nonelective Contributions
Proposed Regulations Allow Suspension or Reduction of Safe Harbor Nonelective Contributions Mid-Year

Treasury Regulation [REG–115699–09] – Suspension or Reduction of Safe Harbor Nonelective Contributions

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Mon, 18 May 2009 14:04:00 +0000

26 CFR Part 1

[REG–115699–09]

RIN:1545–BI64

Treasury Regulation [REG–115699–09] – Suspension or Reduction of Safe Harbor Nonelective Contributions

SUMMARY: This document contains proposed amendments to the regulations relating to certain cash or deferred arrangements and matching contributions under section 401(k) plans and section 403(b) plans. These regulations affect administrators of, employers maintaining, participants in, and beneficiaries of certain section 401(k) plans and section 403(b) plans.

DATES: Written or electronic comments must be received by August 17, 2009. Outlines of the topics to be discussed at the public hearing scheduled for Wednesday, September 23, 2009, at 10 a.m. must be received by August 19, 2009.

Related Links:

IRS Proposes Rules Allowing Employers to Suspend or Reduce Safe Harbor Nonelective Contributions

Related Blog Posts:

IRS Notice 2009-31 – Election and Notice Procedures for Multiemployer Plans Under Sections 204 and 205 of WRERA

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Thu, 23 Apr 2009 15:15:00 +0000

Part III --- Administrative, Miscellaneous, and Procedural

IRS Notice 2009-31 – Election and Notice Procedures for Multiemployer Plans Under Sections 204 and 205 of WRERA

Election and notice procedures for multiemployer plans under sections 204 and 205 of WRERA. This notice provides guidance for sponsors of multiemployer defined benefit plans relating to the elections described in sections 204 and 205 of the Worker, Retiree, and Employer Recovery Act of 2008, P.L. 110-458 (WRERA), and on the notice required to be provided if a plan sponsor makes an election under section 204.

Related Links:

IRS Notice 2009-27 – Premium Assistance for COBRA Benefits

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Thu, 23 Apr 2009 15:12:00 +0000

Part III --- Administrative, Miscellaneous, and Procedural

IRS Notice 2009-27 – Premium Assistance for COBRA Benefits

This notice provides guidance under section 3001 of the American Recovery and Reinvestment Act of 2009 relating to the premium reduction for individuals who were involuntarily terminated and are electing COBRA continuation coverage under the group health plan of their former employer.

Related Links:

IRS Notice 2009-22 – Asset Valuation under Section 430(g)(3)(B) as amended by WRERA

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Thu, 23 Apr 2009 15:08:00 +0000

Part III --- Administrative, Miscellaneous, and Procedural

IRS Notice 2009-22 – Asset Valuation under Section 430(g)(3)(B) as amended by WRERA

Asset valuation under section 430(g)(3)(B) as amended by WRERA. This notice provides interim rules regarding asset valuation methods that are permitted to be used by single employer defined benefit pension plans for minimum funding purposes pursuant to changes made by the Worker, Retiree, and Employer Recovery Act of 2008, Public Law 110-458 (WRERA). This notice also provides automatic approval for a change in asset valuation method for plan years beginning during 2009 to adopt any permissible asset valuation method.

Related Links:

IRS Notice 2009-20 – Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Thu, 23 Apr 2009 15:07:00 +0000

Part III --- Administrative, Miscellaneous, and Procedural

IRS Notice 2009-20 – Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates

Weighted average interest rate update; corporate bond indices; 30-year Treasury securities; segment rates. This notice contains updates for the corporate bond weighted average interest rate for plan years beginning in March 2009; the 24-month average segment rates; the funding transitional segment rates applicable for March 2009; and the minimum present value transitional rates for February 2009.

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Employee Plans News - Special Edition, April 2009

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Wed, 15 Apr 2009 20:45:00 +0000

The IRS published Employee Plans News - Special Edition, April 2009:

Announcement 2009-34 - Request for Comments on Revenue Procedure for §403(b) Prototype Plans and Sample Plan Language

Employee Plans News - Special Edition, March 2009

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Tue, 31 Mar 2009 13:49:00 +0000

The IRS published Employee Plans News - Special Edition, March 2009:

This Special Edition states that defined benefit plans may use a reasonable interpretation in selecting a yield curve for determining a plan's liabilities for funding purposes.

Employee Plans News - Spring 2009 Edition

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Wed, 25 Mar 2009 13:24:00 +0000

The IRS released Employee Plans News - Spring 2009 Edition. It contains the following articles:

Know a Nonamender? Here's what you need to know NOW...
Final Regulations Issued for Automatic Contribution Arrangements
Sample Plan Language - Transfer of an ESOP's S Corporation Shares to Prevent a Nonallocation Year
The EPCU Insider -The Multiemployer Actuarial Certification Project – Defined Benefit Plan Actuarial Certification Errors
ERPA - CPE Sponsor Program
Web Spins - The Retirement Plans Site
Employee Plans Published Guidance
Critical Priorities…With Monika Templeman - Today's Discussion: Update on the Enrolled Retirement Plan Agent Program
Attention All 2009 Form 1099-R Issuers
Highlights of the Retirement News for Employers
The Corner of Forms & Pubs
We're Glad You Asked!
403(b) Phone Forum
DOL Corner
PBGC Insights
Calendar of EP Benefits Conferences

Treasury Regulation – [TD 9447] – Automatic Contribution Arrangements

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Wed, 25 Feb 2009 18:08:00 +0000

26 CFR Parts 1 and 54

[TD 9447]

RIN 1545-BG80

Treasury Regulation – [TD 9447] – Automatic Contribution Arrangements

TD 9447 contains final regulations relating to automatic contribution arrangements. These regulations affect administrators of, employers maintaining, participants in, and beneficiaries of section 401(k) plans and other eligible plans that include an automatic contribution arrangement.

SUMMARY: This document contains final regulations relating to automatic contribution arrangements. These regulations affect administrators of, employers maintaining, participants in, and beneficiaries of section 401(k) plans and other eligible plans that include an automatic contribution arrangement.

DATES: Effective date: These regulations are effective on February 24, 2009.   Applicability date: Except as provided in Sec. Sec.  1.401(k)-3(j)(1)(i) and 1.401(m)-2(a)(6)(ii), the final regulations relating to qualified automatic contribution arrangements (Sec. Sec.  1.401(k)-2, 1.401(k)-3, 1.401(m)-2, and 1.401(m)-3) apply to plan years beginning

on or after January 1, 2008. The regulations relating to eligible automatic contribution arrangements (Sec. Sec.  1.402(c)-2, 1.411(a)-4, 1.414(w)-1, and 54.4979-1) apply for plan years beginning on or after January 1, 2010.

Final regulations under section 401 and other sections of the Code provide guidance relating to certain automatic contribution arrangements, eligible rollover distributions, forfeitures, and excise tax on certain excess contributions and excess aggregate contributions.

Related Links:

IRS Notice 2009-16 – Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Tue, 24 Feb 2009 18:32:00 +0000

Part III --- Administrative, Miscellaneous, and Procedural

IRS Notice 2009-16 – Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates

Weighted average interest rate update; corporate bond indices; 30-year Treasury securities; segment rates. This notice contains updates for the corporate bond weighted average interest rate for plan years beginning in February 2009; the 24-month average segment rates; the funding transitional segment rates applicable for February 2009; and the minimum present value transitional rates for January 2009.

Related Links:

IRS Notice 2009-16, 2009-08 I.R.B. 572 (February 23, 2009) – Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates [PDF]
IRS Notice 2009-16, 2009-08 I.R.B. 572 (February 23, 2009) – Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates [HTML]
2009-08 I.R.B. 572 (February 23, 2009)

Retirement News for Employers – Winter 2009 Edition

ajuckett@esopinsourcing.com (Employee Stock Ownership Plan (ESOP) Consultant) — Wed, 18 Feb 2009 02:12:00 +0000

The IRS released Retirement News for Employers – Winter 2009 Edition. It contains the following articles:

Did You Amend Your SIMPLE IRA Plan for EGTRRA?
New Law Waives Required Minimum Distributions for 2009
We're Glad You Asked!
New on the Web
Automatic Enrollment 401(k) Plans for Small Businesses
Fixing Common Plan Mistakes: Failure to Limit Contributions for a Participant
Recent Guidance
New Form 990 Requirements
The Filing Cabinet
Desk Side Chat With Monika Templeman - The Biggest Mistake
DOL News
Mark Your Calendar
Timing Is Everything Flyer.