EBSA provides compliance guidance for employee benefit plans adversely affected by Oklahoma tornado

The Employee Benefits Security Administration (EBSA) has issued guidance for parties connected to ERISA-covered employee benefit plans that have been adversely affected by the Moore, Oklahoma tornado. The Department of Labor states that it understands that plan fiduciaries, employers, labor organizations, service providers, participants, and beneficiaries may have plan compliance-related problems over the next few months.

The relief provided in this guidance applies to employee benefit plans, plan sponsors, and plan service providers that were located in one of the counties that have been identified as covered disaster areas because of the damage caused by the Oklahoma tornado that occurred on May 20, 2013, and is in addition to the Form 5500 relief furnished by the IRS in News Release IR-2013-53, May 21, 2013.

Participant contributions and loan repayments

Participant contributions and loan repayments become plan assets when they are paid to employers or withheld from participants’ wages by employers and are required to be forwarded to the pension plans on the earliest date they can be reasonably segregated from the employers’ general assets. In any event, these contributions and loan repayments must be forwarded to the plans no later than the fifteenth business day of the month following the month in which the amounts were paid to or withheld by the employer.

The DOL recognizes that some employers and service providers located in the covered disaster areas will not be able to forward participant contributions and loan repayments within the required deadline. The DOL will not, solely because of a failure attributable to the Oklahoma tornado, enforce ERISA Title I provisions because of a temporary delay in forwarding these contributions or payments to the extent that these parties act reasonably, prudently, and in the interest of employees to comply as soon as it is practical to do so. If these conditions are met, the IRS has informed the DOL that the IRS will not seek to assess an excise tax for a prohibited transaction under Code Sec. 4975 resulting solely from such a temporary delay.

ERISA disclosures

Title I of ERISA requires employee benefit plan administrators, fiduciaries, and others to deliver various disclosures and notices to participants and beneficiaries, including, for example, blackout notices, participant-level fee disclosures, pension benefit statements, annual funding notices, and summary annual reports. The DOL recognizes that the due dates for the various disclosures and notices might fall within the timeframe covered by the IRS relief (that is, May 18-September 30, 2013). The DOL will not seek to enforce disclosure deadline requirements when a failure is due to events beyond the control of the plan administrators or fiduciaries, such as natural disasters, if they act prudently under the circumstances and comply as soon as is practical.

Contact information

The DOL states that it will continue to monitor the situation and that further guidance will be forthcoming. For more information on the Oklahoma tornado relief under ERISA, contact EBSA at www.askebsa.dol.gov or call 1-866-444-3272. Direct questions about IRS guidance to the IRS at 1-877-829-5500.

Source: EBSA News Release, June 13, 2013.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer’s Benefits Reports.

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