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Compliance and Non-Discrimination in Exec Medical Reimbursement
January 26, 2021 WEBCAST
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[Guidance Overview]

IRS Extends Temporary Relief from the Physical Presence Requirement for Spousal Consents Through June 2021

"Retirement plan elections that must be witnessed by a notary or plan representative during the first six months of 2021 may be witnessed remotely using live audio-video technology, if certain requirements are met." 

Thomson Reuters Practical Law

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[Guidance Overview]

IRS and PBGC Provide Clarification on Contribution Deadline for Defined Benefit Plans

"[IRS Notice 2020-82 extends] the deadline for required minimum contributions for single-employer defined benefit pension plans that would otherwise be due during the 2020 calendar year, from January 1, 2021, to January 4, 2021. On the same day, the PBGC issued complementary guidance, in Technical Update 20-2, to reflect the January 4, 2021, deadline established by the IRS in the Notice when calculating variable-rate premiums." 

Faegre Drinker

[Guidance Overview]

Partial Termination Relief for Retirement Plans Included in New Stimulus Bill

"The IRS previously issued guidance under the [CARES Act] clarifying that employees furloughed or laid off due to COVID-19 but rehired by the end of 2020 would not be counted in determining whether a retirement plan incurred a partial plan termination for the plan year.... Under this new law, a retirement plan will not have a partial termination for a plan year if: [1] any portion of the plan year includes the period beginning March 13, 2020, and ending March 31, 2021; and [2] the number of active participants covered by the plan on March 31, 2021, is at least 80% of the number of active participants covered by the plan on March 13, 2020." 

Warner Norcross & Judd LLP

[Guidance Overview]

DOL Issues Final Rule on Proxy Voting

"The most significant departure from the highly prescriptive Proposed Rule is an emphasis on a more principles-based design that eliminates the potentially burdensome cost-benefits analysis and documentation requirements for proxy voting. The Final Rule requires, among other things, that plan fiduciaries act solely with the economic interest of the plan and its participants and beneficiaries in mind when managing plan assets." 

Ice Miller LLP

[Guidance Overview]

DOL’s Fiduciary Rule 3.0: Exemption and Investment Advice Fiduciary Definition (PDF)

22 pages. "While the final guidance broadly retains the structure and approach of Proposal 3.0, DOL incorporated the following important changes ... [1] DOL further explicated and tightened its discussion of the circumstances in which it will consider rollover advice to be fiduciary 'investment advice,' under a new interpretation of the 1975 5-part test. [2] Where rollover advice is conflicted fiduciary advice that requires the relief of the new PTE, DOL added as a condition written disclosure to Retirement Investors of the reasons that a rollover recommendation is in their best interest.... DOL announced [a February 16, 2021 effective date] for the new PTE and sunset date for reliance on DOL's prior guidance on rollover advice ... and a December 20, 2021, sunset date for its temporary enforcement policy adopted after vacatur of Final Rule 2.0." 

Eversheds Sutherland

Innovative Funding Strategies from the Public Sector (PDF)

20 pages. "[T]his report examines several innovative and often lesser-known pension funding strategies that have been utilized in the public sector to address legacy pension costs and to create more stable costs over time.... Each of these efforts changes the nature of plan funding in different ways, and these case studies can be a useful reference guide for those who are concerned about a well-functioning public finance system and honoring benefits earned by state and local government employees." 

National Institute on Retirement Security [NIRS]

[Opinion]

Automatic State-Sponsored IRAs Provide Subpar Solutions for Retirement Savings

"These flawed state plans are well-intentioned but may likely be subpar solutions to a national problem we can't solve with 50 or less individual and different state plans.... State plans may create more financial predation ... Ireland personal accounts shows voluntary doesn't work ... A good plan has an employer or government match ... A good plan has low expense ratios ... A good plan has autoenrollment, the best plans have mandatory participation." 

Prof. Teresa Ghilarducci, in Forbes

[Guidance Overview]

Spending Bill Includes Coronavirus Relief for Employee Benefit Plans

"[1] Paycheck Protection Program relief ... [2] Medical expense deduction floor reduced ... [3] Disaster relief: distributions and loans ... [4] Money purchase plans may offer coronavirus-related distributions ... [5] Partial plan termination relief ... [6] Qualified future transfer elections ... [7] Healthcare provisions ... [8] Education-related provisions." 

Ascensus

[Guidance Overview]

End-of-Year Omnibus Bill Includes COVID-19, Health and Retirement Plan Provisions

"[The bill] includes a large surprise medical billing package, a health transparency and patients' rights package, various tax extenders and other tax and health provisions, and a few miscellaneous retirement provisions. This is the largest health care legislative package since the [ACA] and includes more than 10 new patient protections with rapid effective dates, suggesting a very busy health regulatory year in 2021 ... The package does not include relief for multiemployer pension plans facing insolvency or the single-employer defined benefit plan funding relief provisions previously included in the House-passed HEROES Act." 

Groom Law Group

[Guidance Overview]

Final Section 162(m) Rules Clarify Limits on Companies’ Ability to Deduct Executive Pay

"The final regulations largely follow the proposed regulations, but further clarify or refine certain provisions.... [1] Post-IPO transition relief for newly public corporations has been eliminated.... [2] 'Predecessor' rules are further refined.... [3] The partnership 'distributive share' rules are clarified.... [4] Grandfathering rules further clarified." 

Ropes & Gray LLP

[Guidance Overview]

IRS Finalizes Regs Under Section 162(m) (PDF)

"The application of Section 162(m) to a corporation's distributive share of a subsidiary partnership's deduction for compensation expenses ... is effective with respect to any compensation paid after December 18, 2020, unless such compensation is paid pursuant to a written, binding contract in effect on (and not materially modified after) December 20, 2019. The definition of 'covered employee' applies to all taxable years ending on or after September 10, 2018, unless the publicly held corporation's fiscal year and tax year do not end on the same date, in which case it applies to all tax years ending on or after December 20, 2019." 

Fried Frank

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Employer in Controlled Group Never Adopted the Plan, But Participated

"Controlled group with 4 companies. Only 3 of them adopted the plan, but all four companies are participating. Can we do a retroactive amendment having the missing company adopt the plan back to 2013?" 

BenefitsLink Message Boards

Which Is Better: A State-Run IRA Program or a 401(k) Plan?

"Consider this not-entirely-imaginary scenario: An employer has no retirement plan, and no payroll practice for retirement contributions. The employer wants to allow its employees to save for retirement, but will provide no nonelective or matching contribution. None of the employees, including the deemed-employee business owner, wants to save (and none can afford to save) more than an amount within the IRA contribution limit. The employer will not consider an employer-sponsored retirement plan unless the employer can arrange the maximum delegation of fiduciary responsibilities. All employees live and work in a State that offers a State-run payroll-deduction program for IRA contributions. This employer asks for your unbiased advice about whether it should arrange a 401(k) plan, or join the State-run IRA program." 

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Most Popular Items in the Previous Issue

Year-End COVID-19 Stimulus Legislation Becomes Law, Includes Numerous Employee Benefit and Executive Compensation Provisions
Thomson Reuters Practical Law

New Law Includes Retirement Plan Relief
Graydon

Consolidated Appropriations Act, 2021: Effects on Employer-Sponsored Retirement Plans
Jackson Lewis P.C.