Retirement Plans Newsletter

BULLETIN
August 6, 2020

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[Official Guidance]

Text of IRS Notice 2020-62: Safe Harbor Explanations -- Eligible Rollover Distributions (PDF)

29 pages. "This notice modifies the two safe harbor explanations in Notice 2018‑74, that may be used to satisfy the requirement under Section 402(f) of the Internal Revenue Code that certain information be provided to recipients of eligible rollover distributions. The safe harbor explanations as modified by this notice take into consideration certain legislative changes, including changes related to the [SECURE Act] ... [T]his notice includes an appendix with two model safe harbor explanations: one for distributions that are not from a designated Roth account, and the other for distributions from a designated Roth account."

Internal Revenue Service [IRS]


[Official Guidance]

Text of IRS Notice 2020-61: Special Funding and Benefit Limitation Rules for Single-Employer DB Plans Under the CARES Act (PDF)

18 pages. "[T]he provisions of this notice pertaining to Sections 430 and 436 of the Code also apply for purposes of Sections 303 and 206(g) of ERISA.... The following questions and answers provide guidance regarding Section 3608 of the CARES Act. To the extent the instructions for Schedule SB, 'Single-Employer Defined Benefit Plan Actuarial Information' of Form 5500, 'Annual Return/Report of Employee Benefit Plan' are inconsistent with this guidance, this guidance supersedes those instructions."

  1. To which plans does the extended contribution due date of January 1, 2021, under Section 3608(a)(1) of the CARES Act, apply? ...
  2. How is a contribution adjusted for interest between the valuation date and the payment date for the contribution, taking into account the interest adjustment rules of Section 3608(a)(2) of the CARES Act? ...
  3. What is the result if the contribution that the plan sponsor makes is less than the amount that was due on the original due date for the minimum required contribution, as increased with interest pursuant to Section 3608(a)(2) of the CARES Act? ...
  4. Does the extended due date under Section 3608(a) of the CARES Act apply to contributions in excess of the amount needed to satisfy the minimum required contribution? ...
  5. How is the amount of a quarterly installment determined, if the extended due date under Section 3608(a) of the CARES Act applies to the installment? ...
  6. For a quarterly installment originally due during 2020 for which the due date is extended under Section 3608(a) of the CARES Act to January 1, 2021, what is the result if a plan sponsor does not satisfy that installment? ...
  7. How are the interest adjustments determined if the plan's effective interest rate for the plan year in which the contribution is made has not been determined at the time the payment is made? ...
  8. If a plan sponsor makes a contribution for a plan year after the original due date for the plan year, but on or before the extended due date under Section 3608(a) of the CARES Act, how is it reported on Schedule SB of Form 5500? ...
  9. Is a contribution for a plan year that is made after the original due date for the plan year (but on or before the extended due date for the plan year under Section 3608(a) of the CARES Act) taken into account for purposes of determining the value of plan assets for a plan year following the plan year for which the contribution is made? ...
  10. Does the extended due date under Section 3608(a) of the CARES Act change the date by which a plan sponsor may make an election to increase a prefunding balance or to use a prefunding balance or a funding standard carryover balance to offset the minimum funding requirement for a plan year? ...
  11. Does the extended due date under Section 3608(a) of the CARES Act change the date by which a contribution must be made in order to be deducted for a taxable year under Section 404 of the Code? ...
  12. May a plan sponsor make an election under Section 3608(b) of the CARES Act (to apply the AFTAP for the last plan year ending before January 1, 2020) for a plan with a plan year that is not a calendar year? ...
  13. What procedures must a plan sponsor follow for making an election under Section 3608(b) of the CARES Act? ...
  14. If a plan's actuary has not certified the plan's AFTAP for a plan year before the plan sponsor makes an election under Section 3608(b) of the CARES Act, what is the effect of the election for purposes of the presumption rules of Section 436(h) of the Code? ...
  15. Is a plan's actuary required to certify the plan's AFTAP for a plan year for which the plan sponsor makes the election under Section 3608(b) of the CARES Act? ...
  16. If a plan's actuary certified the plan's AFTAP for a plan year for which the plan sponsor later makes the election under Section 3608(b) of the CARES Act, what is the effect of that certification? ...
  17. How does the restriction on plan amendments and unpredictable contingent event benefits apply if the AFTAP that applies is pursuant to a plan sponsor's election under Section 3608(b) of the CARES Act? ...
  18. Does the AFTAP that applies pursuant to a plan sponsor's election for a plan year apply for purposes of the presumptions under Section 436(h) used in a subsequent plan year?

Internal Revenue Service [IRS]

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Lois Baker, J.D., President  loisbaker@benefitslink.com
David Rhett Baker, J.D., Editor and Publisher  davebaker@benefitslink.com
Holly Horton, Business Manager  hollyhorton@benefitslink.com

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