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Participant X left his job at Company M during 2020. He received a distribution of his remaining 401(k) account balance of $6,000. If X claims the distribution as a Coronavirus-Related Distribution taxable over 3 consecutive years, $2,000 would be taxable during 2020. However, if X contributes $2,000 to an IRA, he has repaid the distribution, resulting in $0 tax for that year. Assuming that X is over 50 years old. How much may X contribute to a traditional IRA during 2020: $7,000 or $5,000 ($7,000 - $2,000 recontribution)?

Peter, I appreciate your response, especially your good faith effort in attempting to answer my question. The curious thing about this statute is that it makes a lot of minor surgical changes to several labor law statutes because it is slapped onto the end of a statute amending the CETA Act. There is a Section 5 (which is presumably a section of the Labor-Management Cooperation Act), but subsection (b) does not appear to contain anything resembling proper purposes for trust funds, let alone committees advancing labor-management cooperation.

I represent a labor-management relations fund which is intended to comply with Section 302(c)(9) of the Labor-Management Relations Act, under an amendment adopted by the Labor-Management Cooperation Act of 1978. The DOL has consistently taken the position that since such funds provide neither a pension benefit nor a welfare benefit that they are not subject to ERISA. Ironically, there are a number of court cases in which such funds sue to recover delinquent contributions under ERISA Section 515 which have been accepted by the courts (presumably because the opposing party never raised the ERISA issue as a defense). Does anyone have a sample or specimen trust agreement that can be used for such an arrangement to the extent it is funded by employer contributions?

Participant A retired from Company X nearly 10 years ago. He participated in X's defined benefit plan (from which he is currently receiving a pension under a joint and 100% survivor annuity) and 401(k) plan. The pension is equal to $36,000 per year, payable in monthly installments. During 2020, Participant A also received distributions of his remaining account under X's 401(k) plan (which had both Roth and non-Roth portions), rolled over the vast majority of it into traditional and Roth IRAs and later received distributions of the balance from both IRAs. During 2020, A was also laid off by Company G, which is unrelated to Company X. A would like to treat the portion of the 401(k) plan distribution which was not rolled over but otherwise subject to tax as well as the taxable portion of the traditional IRA distribution as a Coronavirus-related distribution and pay the resulting tax over the next 3 years. A would like the pension amount received to be subject to the regular tax rules, which would subject the entire $36,000 to tax during 2020 (otherwise, A would be subject to tax on the pension during 2020 on $12,000, but would have to pay tax on $48,000 ($36,000 + $12,000) in each of 2021 and 2022). However, "If more than one distribution was made during the year, you must treat all distributions for that year the same way." Form 8915-E Instructions, page 1; IRS Notice 2020-50, Section 1. IRS Notice 2020-50, Section 4.B. ("All coronavirus-related distributions received in a taxable year must be treated consistently (either all distributions must be included in income over a 3-year period or all distributions must be included in income in the current year)." Seemingly inconsistent with the preceding paragraph are the following: Instructions to Form 8915-E, page 2, "Types of Qualified 2020 Disaster Distributions," "Coronavirus-related Distributions," "you can generally designate any distribution (including periodic payments and required minimum distributions) from an eligible retirement plan as a coronavirus-related distribution, regardless of why the distribution was made," provided that the aggregated distributions so designated do not exceed $100,000. Coronavirus-related distributions are permitted without regard to your need;" IRS Notice 2020-50, Section 1.C ("In general, a qualified individual is permitted to designate a distribution described in the preceding paragraph as a coronavirus-related distribution.") Reviewing the foregoing, I am inclined to conclude that the requirement of consistency referenced in the second paragraph applies solely to determination of whether all Coronavirus-related distributions (as designated by the individual) are taxed ratably over 3-years or taxed in full in the year of distribution. Therefore, A would be permitted to designate only the portion of the 401(k) account that would have been taxable but was not rolled over as well as the taxable IRA distributions as coronavirus-related distributions and not the periodic payments A was receiving from the defined benefit plan. Does anyone have a contrary position on this?

Allow me to interject here. If the doc wants to invest directly in bitcoin or gold, I am assuming that this is a participant-directed defined contribution plan, Code Section 408(m) subjects the investment in collectibles by an IRA or participant-directed defined contribution plan to treatment as a potentially taxable distribution (which is the treatment given to any prohibited transaction entered into by an IRA). The definition of collectible specifically includes an investment in metal or a coin (other than certain gold coins referenced in Section 408(m)(3)(A) or gold bullion described in Section 408(m)(3)(B)). Although bitcoin was not even contemplated at the time of the section's enactment back in 1981, the definition of collectible is sufficiently broad as to encompass bitcoin, subject to any determination made by the Treasury Department. The best alternative for the other doc is to have the self-directed brokerage account invest in a mutual fund or ETF investing in such assets.

The only comment I wanted to make was that the answer could be "It depends on how the spouse was designated." if the participant named a specific individual, such as "Mary Moss, my wife" as sole primary beneficiary and "Peter Moss, our son" as contingent beneficiary and the plan does not contain a clause that spousal beneficiary designations are automatically revoked upon divorce, then it would seem that Peter should get at least one-half and Spouse 2 the other half. If the designation merely stated that "my spouse" was the primary beneficiary and that Peter Moss was contingent beneficiary, I would tend to think Spouse 2 would be entitled to the entire account, assuming that there either was no one-year of marriage requirement or that the requirement was met at the participant's death.

Since the President went to Georgia to campaign for the Republican candidates, I feel that his desire to not adversely affect the outcome of the runoff elections may well have motivated him to sign the bill into law. For once, it appears that he followed the advice of his advisers rather than follow a gut instinct.

Another factor that might play into all of this political drama is the outcome of the Georgia Senate runoff elections. If Congress adjourns early or if Trump pocket vetoes the legislation, those Georgia residents who had hoped for relief from the legislation may well be numerous enough (assuming they vote) to result in both Democratic candidates taking the two Senate seats. Perhaps Trump does not care and considers it another one of his sore loser tactics. The Congressional Republicans would very likely care because it appears Trump holds enough power over the party in the Biden era that they fear to confront him (or attempt to influence him to sign the bill). Stay tuned, everyone. What will the next stirring chapter in this political intrigue bring us?

Under the SECURE Act's changes to post-death required minimum distributions, the legislation considers a child to be the participant's eligible designated beneficiary (and thus not subject to the 10-year payout rule) until the child attains majority (whatever that means). However, another category of eligible designated beneficiary considers an individual (regardless of relationship to the participant) to be an eligible designated participant if s/he is at least 10 years younger than the participant. Going back to the child, would the child remain the participant's eligible designated beneficiary because s/he is at least 10 years younger than the participant once the child attains majority? I know of no individual having a child (unless s/he adopted an adult) who is fewer than 10 years younger than the participant. Or is the child, at the point at which s/he attains majority forced onto a 10-year payout from that point? Let's say participant dies at the age of 60 and designates a child who is then age 15 as his/her beneficiary. Once the child attains majority, does the child remain an eligible designated beneficiary because s/he is at least 10 years younger? Or does the child lose his/her status as an eligible designated beneficiary and become merely a designated beneficiary, in which case, remaining amounts payable to such beneficiary must be paid out withint 10 years of the date the child attains majority?

I have been searching for the latest bipartisan agreement on the Coronavirus Relief bill in legislative language format. Has anyone been able to access a copy? If so, could you please attach a link to it? Thank you.

The Social Security Administration has just announced that the COLA for 2021 is 1.3%. From that, the IRS can calculate what, if any, limits are increased for the 2021 plan year.

I participate as a retiree in my former employer's retiree medical plan, which is a Medicare Advantage PPO. As such, it includes Part D for prescription drugs, including the doughnut hole. I know that the ACA had provisions designed to ameliorate the doughnut hole. I was informed that I could not enroll in any other medicare supplement plan (including for prescription drugs) or I would lose my coverage. I therefore have the following questions: (1) were the ACA provisions which were intended to lessen the impact of the doughnut hole ever implemented or put into effect? (2) if (1) is yes, are they still in effect? (3) If (1) or (2) is No, can my former employer design the prescription drug portion so as to lessen the severity of the doughnut hole provision? Thank you!

Another point worth mentioning regarding Section 125 is that, among other requirements, it is necessary for the employer in such situation to timely adopt a Section 125 plan. Otherwise, the constructive receipt exception is not there, This may mean that even those employees opting for group health coverage would have to be taxed on the $500 opt-out amount.

Another term that I have heard bandied about is "recordkeeper." That may be a bit underinclusive, especially considering the "legal" work some of you do.

No but if the fund still pushes back, initiate arbitration and cite the case to the arbitrator.

Please be very careful here not to run afoul of Section 401(k)(4)(A) which prohibits any benefit which is contingent upon an employees deciding whether or not to make elective deferrals to a 401(k) plan, other than a matching contribution.

A client maintains a self-funded group health plan for its employees. There is a proposal to amend the plan to subject reimbursement for infertility services to a lifetime maximum of $25,000 per family for in-network and out-of-network care. Are infertility services considered an essential health benefit which would make the proposed lifetime limit illegal?

If anyone were interested in saving these Augean stables (one of Hercules' 12 labors), they should demand a hefty retainer up front. Once the clientvrealizes the magniyude of the monster they have vcreated, I am sure that the owners will develop a convenient memory and forget that you are trying to save them from plan disqualification. At some point. their lack of memory will be converted to blame cast upon you. the retainer will help protect you from loss of interest when their memory conveniently forgets your role in this and from the indignities you will be sure to endure during the blame phase.

Because there is a higher incidence of COVID-19 positive test results for residents of a long-term care facility (i.e., a nursing home), State X mandates that all residents and staff at the facility be tested for COVID-19 by a specified date. Those individuals who test negative are required to be retested within one week to rule out a false negative on the first test. There will only be a second retest if and to the extent that the Centers for Disease Control and Prevention mandate it. My question is, in light of the no cost-sharing of COVID-19 testing imposed by the Families First Coronavirus Response Act, as applied to a self-funded plan, does this mean that the plan (or employer) is saddled with the cost of conducting the testing? Can the plan deny coverage for the retest as not medically necessary?

I went to an NCEO srminar when I was in-house counsel to a Fortune 50 company that is publicly traded. I found it to be highly informative.

I represent an apprentice fund that was originally organized as a 501(c)(5) labor organization. It decided during 2019 to apply for recognition as a 501(c)(3) because it qualifies as a school. In preparing the Form 1023, there are a lot of questions about relationships and the instructions to the 1023 do not address how to respond to these types of questions. For example, Part V. line 2a asks if any of the officers, directors, or trustees are related to each other through family or business relationships. It is not clear how far family relationships extend, such as whether in-laws would be included and it is not clear from the list of trustees whether any of them are in-laws to any other trustee or officer or director. As far as business relationship, is a union trustee who is also an officer of the local union in a business relationship with him or herself or with other trustees who are similarly situated? Part V, line 1c asks whether any of the officers, directors or trustees are related to the highest compensated employees or highest compensated independent contractors who are listed in 1b or 1c above. Again they are asking about a family or business relationship. Part V, line 3b introduces a new term. It asks whether each of the officers, directors, trustees, highest compensated employees and highest compensated independent contractors receive compensation through any other organizations related to the organization through common control. I noticed that the IRS Regs at Section 1.414(c)-5 contain regulations for determining whether tax-exempts are under common control. There is not an overlap of employer trustees among any of the funds established by the local union but there is overlap on the union trustee side. In fact, one or two of the trustees of some of the funds are either also trustees of some or all of the other funds as well as officers of the local union. Given that the union local is very small in membership, it is likely that the officers ol the local, who appoint the union-side trustees would appoint themselves as trustees to one or more of their funds. Is this sufficient to give rise to common control? Next, in Part VIII, line 15, another new concept is introduced. There, the question is whether the organization has a close connection with any organizations. What is a close connection? Is it overlapping union trustees of a small local union? Does it mean that two or more funds sometimes, often or seldom work together to accompish the same or similar goals? Since the instructions are silent, is there some guide book toward preparation of a 1023 that explains these concepts in greater detail?

I was drafting a Coronavirus-related distribution application form, which included the certification that the applicant is an eligible individual. The question I have is since the employee has to represent that s/he has been diagnosed with Coronavirus, that a spouse or dependent child has or that s/he has experienced adverse financial consequences, the first two trad awfully close to HIPAA protected health information. Fortunately, this client has a TPA that will be administering this provision (as well as other facets of the plan). The question that I have is does the possible application of the first two grounds of qualifying for a coronavirus-related distribution subject the plan to all the HIPAA privacy requirements? I would like to hear your thoughts on this.

I looked at the DOL FAQs regarding the Coronavirus and Employers obligated to contribute to a multiemployer welfare fund. I note that the FAQs, especially Q&As 35 - 37 permit the payment of Emergency Family and Medical Leave benefits and Emergency Paid Sick Leave benefits to be provided "by other means, provided they are consistent with your bargaining obligations and collective bargaining agreement." I can foresee that most funds would want to negotiate the bargaining agreement so that they provide the expanded paid leave benefits from the fund and that the existing paid leave provisions may not be sufficiently broad to apply to these expanded paid leave rights. Assuming that is satisfied, would the employer be precluded from providing such paid leave benefits from its own funds and applying for and retaining the IRS payroll tax credits? Would that be consistent with the employer's bargaining obligations and the collective bargaining agreement? Or would there be an obligation? If it would, would the employer be obligated to either have the fund apply for and retain the tax credits or would the employer be obligated to pay the credits obtained over to the funds?

Granted. Perhaps that is why those with weak stomachs should not watch sausage manufacturing nor the path of proposed lehislation through Congress.

Thank you, Peter! Now I see that there is a dispute over the unemployment provisionsl