"While many plans contract with TPAs to provide election notices to qualified beneficiaries, TPAs rarely agree to serve as the plan administrator, so the employer typically remains liable for any failure to provide timely notices. Plan administrators using a TPA to send election notices should verify that the TPA will maintain adequate documentation of what was mailed and when and will agree to indemnify the employer for any failure to properly provide required notice." [Casillas-Guardiola v. Bayer Puerto Rico, Inc., No. 22-1167 (D. P.R. Sep. 30, 2025)] MORE >>
"AD No. 25-03 provides that amendments for SECURE 2.0 provisions -- whether optional or mandatory -- do not constitute Qualification Amendments. This clarification is important because under long-standing PR Treasury guidance, a Qualification Amendment must be submitted to the PR Treasury for a new determination letter (even if the plan already has a recent determination letter)." MORE >>
"[T]he Department has determined that amendments adopted by qualified retirement plan sponsors in Puerto Rico to adopt the provisions of the SECURE Act 2.0, whether optional or mandatory ... will not be considered part of the definition of the term 'Qualification Amendments'. Therefore, if a qualified retirement plan in Puerto Rico is amended to adopt the provisions of the SECURE Act 2.0, the plan does not have to be resubmitted to the Department to request a new Letter of Qualification. Any amendments adopted by qualified retirement plan sponsors under the Code, in parallel with the approval of amendments to adopt the provisions of the SECURE Act 2.0, are outside the scope of this Determination; therefore, they must be analyzed in light of CC PC 16-08 to determine whether they should be submitted to the Department for plan qualification." MORE >>
"The PR Supreme Court determined that, even if a statute's language may be ambiguous, the final interpretation of such statute is ultimately under the courts' purview and not administrative agencies. Similar to U.S. law, Puerto Rico courts are no longer required to provide deference to administrative agencies." [Vázquez v. Consejo de Titulares y Junta de Directores del Condominio Los Corales, 2025 TSPR 56 (May 21, 2025)] MORE >>
"Against the backdrop of this massive discharge of debt, the accrued pension benefits of 167,000 government retirees are fully protected from any reductions. This result is particularly remarkable considering the Commonwealth's three retirement systems were essentially completely broke (average of 1.5% funding level) as of the commencement of the Title III case." MORE >>
"Puerto Rico's governor announced Tuesday that a federal control board reached a key deal that would reduce the U.S. territory's overall debt by nearly 80 percent, but that his administration is rejecting it because it would require cuts to the island's crumbling public pension system."
"On January 20, 2021, the Puerto Rico Department of the Treasury [Hacienda] issued Administrative Determination No. 21-01(AD 21-01), which provides that lump-sum distributions from the retirement plan for Puerto Rico government employees are eligible for direct and indirect rollovers into Puerto Rico-qualified retirement plans maintained by private-sector employers. In practice, however, this determination is unlikely to have much of an impact on the operation of private-sector employer plans." MORE >>
"Last year, in response to the COVID-19 pandemic, the United States Congress and the Puerto Rico Department of Treasury (Hacienda) granted favorable tax treatment to coronavirus-related distributions (CRDs) and participant loans from U.S.-qualified plans and Puerto Rico-qualified plans, respectively. Recently, both jurisdictions extended similar tax treatment to certain distributions, hardship withdrawals, and plan loans related to non-COVID-19 disasters."
"[T]he only feasible alternative for disposing of the accounts of missing participants in a terminating 401(k) or other defined contribution retirement plan qualified only in Puerto Rico is, after making reasonable efforts to locate the missing participants, depositing with the proper state unclaimed property fund(s) the retirement money of those participants who cannot be located. Sending the money to the [PBGC], completing direct rollovers into individual retirement accounts or annuities (IRA), and opening bank accounts for the missing participants generally are not viable options." MORE >>
"Victims of a severe storm and flooding on September 13, have until January 15, 2021, to file various individual and business tax returns and make tax payments ... Individuals and households who reside or have a business in Arecibo parish qualify for tax relief.... [C]ertain deadlines falling on or after September 13, 2020, and before January 15, 2021, are postponed through January 15, 2021. This includes individual and business tax filers that had a valid extension to file their 2019 return due to run out on October 15, 2020."
"[If] during 2020, a Puerto Rico-qualified plan allowed participants to receive in-service hardship withdrawals on account of either the COVID-19 pandemic or the earthquakes that affected the island at the beginning of the year (collectively, 'disaster-relief distributions' or 'DRDs'), the official plan document must be amended accordingly by December 31, 2020." MORE >>
"[Under] an amendment to the Puerto Rico Working Mothers Act ... adoption leave benefits were extended to female employees adopting minors 6 years old or older. Now, these adopting mothers will have a paid leave of 5 weeks.... This amendment does not alter the adoption leave that was already provided for in the Working Mothers Act providing 8 weeks of paid leave to mothers adopting a child 5 years old or younger, not enrolled in school."
"If approved, the measure would prohibit using money from Puerto Rico's crumbling public pension system to repay creditors -- challenging efforts by the federal control board overseeing the island's finances to make pensioners share the pain with investors in a restructuring of part of the island's more than $70 billion in public debt."
"[B]ecause Puerto Rico participants are generally subject to the payment of Puerto Rico income tax on the distribution of retirement benefits and RMDs are ineligible for tax-free rollovers under the Puerto Rico Internal Revenue Code, for local tax purposes a purported rollover of RMDs would be a taxable distribution. When implementing the recent [IRS] guidance allowing for rollovers of 2020 RMDs, sponsors and administrators of dual-qualified plans may want to consider informing Puerto Rico participants that in their cases such rollovers may have adverse tax consequences."
"The Hacienda rules on CRDs remain exactly as described in Circular Letter of Internal Revenue No. 20-23, except for the following two items: [1] Going forward, applications for CRDs are not required to be notarized.... [2] [P]lan administrators, recordkeepers, and trustees now have until December 31, 2020, to complete CRDs to participants (i.e., not just receive the application, but send the payment, either by mail or electronically).... Hacienda did not extend the amendment adoption due date."
"[T]he Department deems it necessary to extend the Eligible Period established in CC RI 20-09 to grant an additional period of time for individuals to access retirement funds and IRA accounts to the extent that their economic conditions so require.... Therefore, CC RI 20-09 and CC RI 20-23 are amended to establish that the Eligible Period to make Special Disaster Distributions will be in effect until Thursday, December 31, 2020." MORE >>
"While the restructuring process has not yet ended, barring unexpected developments within the next couple of years the plans are likely to be modified as follows: the accumulation of additional defined accruals will be permanently frozen; government employees in Puerto Rico will be covered solely under a defined contributions/savings plan; and previously accrued pension benefits will be reduced by up to 8.5 percent." [Financial Oversight and Management Board for Puerto Rico v. Aurelius Investment, LLC, No. 18-1334 (S. Ct. Jun. 1, 2020)] MORE >>
"Senate Bill 1524 seeks to revert to the law in effect before the enactment of the Employment Law Reform by lowering the accrual threshold from 130 hours per month to 115 hours per month. [The Bill] also would revert the minimum vacation leave accrual for all eligible employees to 1.25 days per month, for a total of 15 days per year ... Sick leave accrual would remain the same, at one day per month." MORE >>
"Special Disaster Distributions may now be requested by furnishing a statement signed by the participant under penalty of perjury, without requiring a Notary Public. Electronic means also can be implemented to apply for Special Disaster Distributions."
"This summary specifically addresses provisions under the PR Code related to Puerto Rico Retirement Plans, IRAs, individual retirement annuities and educational contribution accounts. Unless otherwise stated, the amendments become effective as of April 17, 2020, when Act 40 was approved.... Retirement plan distributions to Puerto Rico non-residents ... Withholding tax on retirement plan distributions and participant loan rules ... Filing deadline of informative returns regarding IRAs, individual retirement annuities, and educational contribution accounts." MORE >>
"[T]he Department issues this Circular Letter with the purpose of amending CC RI 20-09 to eliminate the requirement of signing before a notary public of the request for a Special Disaster Distribution and allow the requests to be processed. electronically without the need for the intervention of a notary public." MORE >>
"The purpose of Bill No. 2428 is to establish a special paid leave for non-exempt employees infected (or are suspected of being infected) by the illness or epidemic that triggers a state of emergency declared by either the Governor of Puerto Rico or the Secretary of the Puerto Rico Health Department."
"CC RI 20-22 extends the provisions of CC RI 20-08, which provides income tax exemptions for 'Qualified Payments Made for Disaster Assistance' made by employers to employees and independent contractors, to include certain payments made as a result of the COVID-19 emergency.... CC RI 20-23 amends CC RI 20-09, which provides rules applicable to 'Special Disaster Distributions' from qualified retirement plans and IRAs." MORE >>
"CL 20-09 will continue in full force and effect, except that it will also apply to Eligible Distributions made from Puerto Rico qualified retirement plans and individual retirement accounts during the Relief Period (February 20, 2020 through June 30, 2020) to cover Eligible Expenses incurred as a consequence of the public health emergency created by the COVID-19. These distributions will be subject to the same requirements imposed to Eligible Distributions resulting from the earthquakes." MORE >>
