17 pages; for use in preparing 2024 returns. "What's new: [1] Standard mileage rate.... [2] Earnings subject to Social Security tax.... [3] Modified adjusted gross income (AGI) limit for deduction of traditional IRA contributions.... [4] Modified AGI limit for Roth IRA contributions increased.... [5] Earned income credit (EIC). "  MORE >>

"Unfortunately, Hacienda did not increase vis-à-vis 2024, the maximum amounts that Puerto Rico participants can contribute to their 401(k) plan accounts through pre-tax, catch-up, or after-tax contributions. And, because the Puerto Rico Internal Revenue Code of 2011 does not provide for Roth contributions, Puerto Rico participants remain ineligible to make Roth contributions to their 401(k) plan accounts."  MORE >>

"Plan sponsors that choose not to allow the super catch-up contributions may want to review the language in their plan documents related to catch-up contributions. If the plan document broadly allows catch-up eligible participants to defer the maximum permitted under Internal Revenue Code Section 414(v), the plan document may inadvertently allow super catch-up contributions, even if this is not the plan sponsor's intent."  MORE >>

"The proposed regulations make it clear that a participant is subject to the Roth Catch-Up Requirement only if he or she has FICA wages for the preceding calendar year in excess of $145,000. In other words, eligible participants working for a partnership who only have self-employment income would not be subject to the Roth Catch-Up Requirement.... [T]he term 'employer' refers only to the individual's common law employer who is participating under the plan. In other words, you do not aggregate wages paid by all employers across the controlled group of companies, even if there are multiple related or unrelated employers participating under the plan."  MORE >>

"The first new feature is for the failure to timely remit participant contributions and loan repayments -- the most frequently used correction under VFCP.... The second new self-correction feature under VFCP involves certain eligible inadvertent failures related to participant loans ... Other notable modifications ... include additional correction options: For prohibited loan transactions and prohibited purchase and sale transactions involving plans; For sale and leaseback transactions to affiliates of the plan sponsor; and Permitting service providers to submit a bulk application to address violations involving multiple plans."  MORE >>

"In his questioning, Justice Brett Kavanaugh commented that the plaintiff's argument 'does seem to close its eyes to the reality of what's going on,' noting that many excessive-fee cases are led against major retirement plans.... Other Supreme Court justices ... discussed potential guardrails that could be put in place to prevent the influx of 'bare bones' lawsuits that don't allege legitimate wrongdoing, while also ensuring that plan participants aren't inhibited by their 'asymmetry' from their plan's information." [Cunningham v. Cornell Univ., No. 21-0088 (2d Cir. Nov. 14, 2023; cert. pet. granted  No. 23-1007 Oct. 3, 2024; oral arg. Jan. 22, 2025, transcript and audio)]  MORE >>

"Although the case is a milestone and first of its kind in the ongoing political debate over ESG initiatives in retirement plan investments, plan sponsors and fiduciaries should take note of several other issues raised by the case that may significantly change the landscape for ERISA fiduciaries." [Spence v. Am. Airlines, Inc., No. 23-0552 (N.D. Tex. Jan. 10, 2025)]  MORE >>

"Multiemployer plan trustees have a fiduciary obligation to collect the contributions owed to the plans they oversee, and the Fourth Circuit's decision is a reminder that an employer's failure to maintain accurate records is not likely to deter plans from enforcing those obligations. In fact, such a failure may prevent the employer from setting forth the facts necessary to rebut determinations by the plan's auditor and expose the employer to interest, liquidated damages, and attorneys' fees and costs incurred by the plan to collect any delinquent contributions.' [Sheet Metal Workers" Health & Welfare Fund of N. Carolina v. Stromberg Metal Works, Inc., No. 21-2134 (4th Cir. Oct. 3, 2024)]  MORE >>

"[M]ake sure that the terms outlined in the prospective provider's contract align with your expectations and include clear termination clauses for your current provider.... When changing the service provider that sponsors your plan document, pay close attention to the plan provisions in the new document.... It is essential to thoroughly analyze the fees related to services offered by previous and current service providers ... Plan sponsors must prioritize the comprehensive and precise transfer of participant data[.]"  MORE >>

"Rep. Tim Walberg (R-MI), ... chairman of the Education and Workforce Committee, on Jan. 23 sent a letter to DOL Inspector General Larry Turner renewing the Committee's request that the [OIG] investigate [EBSA] for what he described as 'serious abuses of authority following reports that it shared confidential information with a plaintiff's attorney for use against employee benefits plan fiduciaries.' "  MORE >>

"One gets the sense that the justices have more faith in the current system of review and its ability to weed out insubstantial arguments than one might glean from the sheer volume of suits in recent months. And on that basis, one might well conclude that they would be inclined to see the dismissal of the suit by the Second Circuit as being premature. If so, that might well set aside the 'plausible' threshold adopted by a number of the federal court districts -- and that would likely encourage more litigation." [Cunningham v. Cornell Univ., No. 21-0088 (2d Cir. Nov. 14, 2023; cert. pet. granted No. 23-1007 Oct. 3, 2024; oral arg. Jan. 22, 2025, transcript and audio)]   MORE >>

"[ALM] asked two professors ... with opposing political viewpoints to share their opinions about the Texas court’s finding that a retirement plan’s sponsors violated their duty of loyalty by allowing firms with ESG objectives to manage the plan’s funds."  MORE >>

"Although the plan and/or the company may also be named as parties in this agreement (as reflecting their contractual responsibilities), identifying the committee as the responsible party for specific provisions, such as those relating to plan administration, monitoring, and compliance requirements, can help align the contract with the governance structure that is in place and may help prevent the company or individuals from being treated as fiduciaries to the plan."  MORE >>

"Generative AI, with its vast capabilities, offers an exciting frontier for transforming how we communicate complex benefits information. Understanding and applying these cutting-edge tools can significantly enhance the quality and efficiency of member communications. Integrating Generative AI into communications strategies not only modernizes the approach to communications but also helps meet members’ evolving needs and expectations."  MORE >>

"The proposed regulations define 'employee' using Section 3401(c), which includes both common-law employees and corporate officers.... The determination of which employees are among the five highest-compensated tracks tax principles, rather than SEC principles ... The proposed rules also apply the current Section 162(m) affiliated group rules to determinations of the five highest-compensated employees for each taxable year."  MORE >>