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Form 5500 Season Is in Full Swing: Are Wheels Turning (or are they Spinning)?

"Some reminders and considerations to assist in decreasing your chances of winning the DOL or IRS 'audit lottery' include ... [1] For preapproved 401(k) plans, ensure the correct opinion letter serial number is entered on Schedule R.... [2] Late deposits -- make sure they're late before you report them as such.... [3] There are a few versions of the Form 5500. Be sure to use the right version ... [4] Report plan name or plan sponsor name changes.... [5] Double check participant counts, and look for anomalies.... [6] Confirm your plan year end dates relative to plan mergers and terminations. "

SECURE 2.0: Plan Sponsor Administrative Pandemonium

"plan sponsors should be making SECURE 2.0 decisions with eyes open and with due consideration, those decisions should be tracked, and the provisions implemented in a legally compliant manner. It is important to avoid knee jerk reactions and to work with benefits counsel and other professional advisors to shore up processes and avoid future headaches. There are outstanding questions and pros and cons relative to all of these decisions that should not be taken lightly."

IRS Form 5500 Reminders for Employer Plan Sponsors

"The July 31, 2024 un-extended Form 5500 due date for calendar year employee benefit plans is fast approaching. Careful review of the Form 5500 with your professional advisors prior to signing under penalty of perjury and filing is advised. [This article provides] some reminders and observations relative to those reviews."

SECURE 2.0 Update

"[E]mployers should be engaged with their recordkeepers, advisors, and qualified counsel to ensure they are taking appropriate steps to implement the required SECURE 2.0 provisions, and make decisions regarding the optional provisions. While additional guidance from the government is eagerly awaited, some has recently been issued."

Form 5500 Reminders for Plan Sponsors

"The due date may be extended if Form 5558 is properly filed with the IRS by the due date.... The information entered onto a Form 5558 should match the Form 5500 and the plan ... [R]ecognize it is your filing made under penalty of perjury; not that of a service provider who may have populated the form ... An auditor might sample some compliance issues and/or instances of late deposits; however, the process is not a comprehensive analysis of a plan's legal compliance."

IRS Form 5500 Reminders for Employers Maintaining Employee Benefit Plans

"[This article describes] a few common issues to keep in mind and tips that are aimed at lessening the chances of examination and/or the imposition of penalties.... Do not blindly rely on the individual who may have entered the data onto the form. Understand it is your filing under penalty of perjury, and that it should be complete and accurate."

IRS and DOL Jointly Issue Final Rule Extending Time Frames for Plans, Participants and Beneficiaries

"[S]elf-insured plan sponsors will have to adjust their internal administration processes or coordinate with their third party administrator with respect to claims processes so that participants receive correct information regarding the claims and appeals deadlines ... HIPAA special enrollment rights will need to be administered carefully.... COBRA presents special issues for compliance with the final rule."

Current Issues Companies With 401(k) Plans Must Have On Their Radar

"Most plans must file Form 5500 by July 31 (or October 15 if an extension is properly obtained).... Failures happen. Find them and correct them consistent with the IRS's correction program.... Understand how your plan is handling hardship distributions in response to recent changes in the law."

Getting the Most Bang for Your Buck Out of a Severance Release

"In a recent Iowa case, an employee who signed a release in connection with a severance agreement later attempted to bring an ERISA claim for breach of fiduciary duty against the employer's ESOP plan.... Because the employee's acceptance of the release was knowing and voluntary, and because it was broad enough to cover the trustee as a fiduciary of the ESOP and to cover ERISA claims for breach of fiduciary duty, the court granted summary judgment in favor of the trustee." [Innis v. Bankers Trust Co. of South Dakota, No. 16-650, (S.D. Ia. Apr. 30, 2019)]

Executive Compensation: Section 162(m) and the Grandfather Rule

"If the company retains the right to unilaterally amend the plan to reduce or eliminate deferrals and/or accruals ... only the amounts deferred prior to January 1, 2018, would be excluded [from the $1,000,000 deduction limitation]. This becomes important because of the change under TCJA to the definition of 'covered employee,' from those employed in certain positions during the year to a 'once covered always covered' approach."