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Taxing Clawbacks (PDF)

21 pages. Excerpt: This report explores the tax treatment of compensation clawbacks and addresses the tax treatment of clawbacks generally and the tax questions raised by the many special cases likely to arise.

409A Failures: Correcting With and Without Notice 2008-113 (PDF)

24 pages. Excerpt: Deferred compensation plans under section 409A are minefields of potential mistakes. Tax penalties for plan failures are harsh. This report explores how to correct failures in plan operation, both with and without the IRS program in Notice 2008-113. First, in Part One, we detail how to correct failures 'by the book' under the notice, and point out some tax surprises hidden within it. In Part Two, we explore how to correct failures when the notice's program is unavailable. We suspect these will be legion. The IRS might not think that correction outside the notice is permitted. If this is their view, we do not agree.

The Forgotten Promise: Why PBGC Retirement Benefit Guarantees Should Continue After Pension Risk Transfer Transactions (PDF)

17 pages. "[T]he PBGC's disavowal of federal protection for retirees after pension risk transfers was never authorized by Congress and conflicts with both the statute and the PBGC's own 1981 position. The authors trace the legal history, legislative intent, and policy implications demonstrating that the law already requires PBGC guarantees to continue even after pension benefits are annuitized. Their analysis calls on regulators and courts to restore this 'forgotten promise' to strengthen the integrity of the U.S. pension system."

Mandatory Roth 401(k) and 403(b) Catch-Up Contributions

"Key decision points for plan sponsors include ... [1] Type of catch-up contribution elections ... [2] Separate catch-up elections ... [3] Spillover catch-up contributions and when to 'deem' contributions as Roth ... [4] Pay tracking ... [5] Not required to offer Roth contributions ... [6] Coordination with non-discrimination testing."

Options for Asset Allocation Disclosure on a Defined Benefit Plan’s Annual Funding Notice

"Defined benefit plans are required to provide participants with an Annual Funding Notice, or 'AFN.' DOL regulations require that the AFN include the allocation of Plan investments, but do not dictate specific asset categories that must be listed for purposes of this disclosure. The AFN is usually prepared by the plan's actuary, then reviewed by the plan administrator. This Benefits Bullets is intended to assist the plan administrator's review. It provides background on the asset allocation disclosure requirement and presents several ways that defined benefit plans can meet it."

Selecting an Automatic Rollover Vendor for a Qualified Pension Plan

"[This article presents] key considerations for selecting an IRA vendor for automatic rollovers.... [P]lan administrators should be aware that the selection of a rollover IRA vendor is a fiduciary decision that requires appropriate deliberation."

Significant Expansion of Roth 401(k) and 403(b) Features Under the SECURE 2.0 Act (PDF)

"[1] Employees can elect to treat employer contributions as Roth.... [2] Mandatory Roth treatment of catch-up contributions for individuals who earned $145,000 in the prior year.... [3] Elimination of pre-death required minimum distributions (RMDs) for Roth 401(k) accounts.... [4] Roth treatment for SEP IRA and SIMPLE IRA contributions."

Fiduciary Considerations for an Expanding U.S. Pension Risk Transfer Market (PDF)

"The key is managing the natural conflict between a company's settlor role and the plan fiduciary's role. The business goal is for a cost-effective and swiftly executed annuity purchase, and the fiduciary's goal is to select a safe and secure annuity. To resolve the competing goals, the plan fiduciary must have a carefully crafted fiduciary process."

Tax-Free Employer Reimbursement of Student Loan Repayments (PDF)

"[T]he Consolidated Appropriations Act of 2021 ... extended through 2025 the ability to treat reimbursements of student loans as tax-free under IRC Section 127. Creating or expanding an [educational assistance plan] may be an attractive way to recruit and retain dedicated employees, particularly during difficult labor market conditions."

Abortion Coverage by ERISA Plans After Dobbs (PDF)

"Plan sponsors ... should consider: [1] Unpredictability and uncertainty of state laws.... [2] Plan sponsor reaction.... [3] ERISA preemption.... [4] Extra-territorial application of state law.... [5] Tax considerations.... [6] Federal response.... [7] Medication-based abortions.... [8] Other state business restrictions.... [9] Protection of plan actions."