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Amendment Deadline Approaches for Code Section 457(b) Plans of Tax-Exempt Employers

"In 2022, employers were required to amend T-E 457(b) Plans to reflect changes to the required minimum distribution (RMD) rules made by the SECURE Act of 2019, known as SECURE 1.0, including the increase in a participant’s required beginning date (RBD) to age 72.... SECURE 2.0 made additional changes to the RMD rules[.]"

New IRS Form Simplifies Section 83(b) Elections

"This new form standardizes the election, reducing the likelihood of errors and making compliance easier for both taxpayers and employers. ... [T]axpayers are not required to use IRS Form 15620 to make a Section 83(b) election and may continue to use 'substitute' election forms that are often attached to equity incentive award agreements. Also, the introduction of the form does not change the 30-day deadline for filing an election from the date the 'property' is received."

Sixth Circuit Clarifies Notice Requirements for FMLA Intermittent Leave

"The court explained the unforeseeable leave regulation 'never mentions intermittent leave.' However, the foreseeable leave regulation includes specific procedures that apply to intermittent leave requests. Based on its interpretation of those two regulations, the court held intermittent leave is a type of foreseeable leave.... The court reiterated employers can establish call-in procedures and may deny FMLA leave if an employee fails to follow them. However, an employee cannot be faulted for failing to comply with such a policy if it is unclear or the employee lacked notice of it." [Render v. FCA US LLC, No. 21-2851 (6th Cir. Nov. 16, 2022)]

Employer's Change in Status Imperils Its Eligible 457(b) Plan

"If the employer-sponsor of an eligible 457(b) plan changes its status as a governmental or tax-exempt entity, the eligible 457(b) plan will become an ineligible 457(f) plan, with potentially drastic consequences for participants. An employer faced with a change in status must be alert to this problem and take action before the status change occurs."

HIPAA Final Rule Addressing Reproductive Health Requires Significant Compliance Measures by December 2024

"Changes to [HIPAA] will require stakeholders across the health care industry to update their internal policies and procedures -- and in some cases their business associate agreements -- relating to the use or disclosure of protected health information (PHI) for specific purposes connected to reproductive health. The compliance date for implementing these new requirements under the HIPAA Final Rule to Support Reproductive Health Care Privacy is December 23, 2024. Notices of Privacy Practices (NPPs) must also be revised, and that compliance date is February 16, 2026."

ESOPs Encouraged -- But Do It Right! SECURE 2.0 Provisions and Expanded IRS Focus

"SECURE 2.0 included a number of provisions specific to ESOPs ... [1] allow limited application of tax deferral on a sale of stock to S corporation ESOPs ... [2] change the definition of 'publicly traded' for diversification requirements; [3] directing the [DOL] to create an Employee Ownership Initiative; and [4] directing the DOL to release formal guidance on ESOP valuation standards.... [IR-2023-144] notes that [the IRS[ will undertake enforcement strategies to ensure compliance with tax law requirements, including valuation issues with employee stock, the prohibited allocation of shares to disqualified persons, and failures to follow requirements for ESOP loans[.]"

New Rules Require Plans to 'Chase Time': Coverage for Long-Term Part-Time Employees

"Plan sponsors should consider adopting an amendment to remove a 1,000-hour requirement and/or a part-time employee exclusion so that it is clear how the plan is in compliance. An amendment signed in 2023 to be effective for 2024 would be best and may be required for safe-harbor plans."

Construction Contractor Must Pay Subcontractors' Union Fringe Benefit Fund Contributions Due to Subcontract Language Deficiency

"The language in the Contractor's collective bargaining agreement with the union required the Contractor to assure that contributions for the Sub's employees be paid, but the language in the subcontractor agreement between the Contractor and Sub did not require the Sub to pay such contributions. The fringe benefit funds included pension/retirement and welfare funds." [Trustees of the Operating Engineers' Local 324 Pension Fund, v. Tri-City Groundbreakers, Inc., and Edw. C. Levy Co., No. 21-11080(E.D. Mich. Feb., 2023)]

Important Alert for 401(k) and 403(b) Plans That Do Not Allow Participants to Make Roth Contributions

"Plans that do not already offer Roth should contact their recordkeeper now and request Roth to be added to the plan effective January 1, 2024, if the plan wants to allow those earning more than $145,000 to make catch-up contributions. Some recordkeepers require months of advance notice for any amendment and/or limit the number of amendment requests they can accommodate based on available staff at the recordkeeper."

SECURE 2.0 Changes to Retirement Plan Corrections

"In SECURE 2.0, Congress has ... [tried] to resolve certain correction issues that bedevil plan administrators.... [1] Correction methods formerly approved either by the IRS or the DOL, but not both, have [now] been written into the IRC and ERISA ... [2] Overpayment errors made by the plan can be corrected without creating hardship for participants and also without exposing plan fiduciaries to a fiduciary violation. [3] The safe harbor correction method for certain automatic contribution and elective deferral failures ... has been made permanent. [4] Self-correction is given broader scope than the agencies apparently felt they had authority to provide."