Pension & Benefits NetNews – April 14, 2020

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Featured This Week

Employee Benefits Management News

  • CARES Act expands definition of qualified medical expenses, provides safe harbor for pre-deductible coverage of telehealth services
  • More updated questions and answers from DOL on COVID-19 and documentation, telework, intermittent leave
  • IRS sets start date for tax credits under Family First Coronavirus Response Act
  • CARES Act provides major relief for companies of all sizes
  • Temporary rule fleshes out FFCRA leave requirements

Pension Plan Guide News

  • Trump signs bipartisan CARES bill that includes retirement plan provisions
  • IRS FAQs clarify filing and payment extension to July 15 due to COVID-19 for plans
  • DOL announces that Tennessee company will pay more than $3.8 million in restitution to ESOP plan

Employee Benefits Management News

CARES Act expands definition of qualified medical expenses, provides safe harbor for pre-deductible coverage of telehealth services

President Trump on March 27 signed the $2 trillion bipartisan Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136). Included in the voluminous law are provisions that affect high-deductible health plans (HDHP), HSAs and FSAs. For more information, see ¶2132L

        (Read Cheetah) »

More updated questions and answers from DOL on COVID-19 and documentation, telework, intermittent leave

As provided under the FFCRA, the DOL will be issuing implementing regulations, but in the interim, the DOL said it will continue to provide compliance assistance to employers and employees on their responsibilities and rights under the FFCRA. Some of the agency’s more recent updates are highlighted below, in whole or in part. For more information, see ¶2132M.

        (Read Cheetah) »

IRS sets start date for tax credits under Family First Coronavirus Response Act

The IRS has announced that the employment tax credits for paid qualified sick leave and family leave wages required by the Families First Coronavirus Response Act (P.L. 116-127) (Act) will apply to wages and compensation paid for periods beginning on April 1, 2020, and ending on December 31, 2020. For details, see ¶2132N.

        (Read Cheetah) »

CARES Act provides major relief for companies of all sizes

After passing the Families First Coronavirus Response Act on March 18, 2020, which attempts to limit the spread of the COVID-19 pandemic and support relief efforts, Congress turned toward stabilizing the economy. To that end, the Senate cleared the bipartisan Coronavirus Aid, Relief, and Economic Security (CARES) Act, by a unanimous vote on March 25. The House of Representatives then voted to pass the massive $2 trillion tax and spending COVID-19 emergency relief package on March 27. President Trump signed the bill into law later that day. For a special briefing, see ¶2132Q.

        (Read Cheetah) »

Temporary rule fleshes out FFCRA leave requirements

The Department of Labor’s Wage and Hour Division has released a temporary rule implementing the newly available public health emergency leave under Title I of the Family and Medical Leave Act (FMLA), and the similarly new emergency paid sick leave available to assist working families facing public health emergencies arising out of the COVID-19 global pandemic. For more information see ¶2132R.

        (Read Cheetah) »

Pension Plan Guide News

Trump signs bipartisan CARES bill that includes retirement plan provisions

The Senate cleared the bipartisan Coronavirus Aid, Relief, and Economic Security (CARES) Act by a 96-to-0 vote late on March 25, 2020. The House voted also to pass the massive, $2 trillion tax and spending “phase three” COVID-19 emergency relief package on March 27, 2020. President Trump signed the measure (P.L. 116-136), which includes retirement plan provisions, on March 27, 2020. Consistent with previous disaster-related relief, a provision waives the 10-percent early withdrawal penalty for distributions up to $100,000 from qualified retirement accounts for coronavirus-related purposes made on or after January 1, 2020 and before December 31, 2020. In addition, income attributable to such distributions is subject to tax over three years, and the taxpayer may recontribute the funds to an eligible retirement plan within three years without regard to that year’s cap on contributions. Furthermore, a provision provides flexibility for loans from certain retirement plans for coronavirus-related relief. The relief applies to loans to a qualified individual made during the 180-day period beginning on the date of the enactment of the legislation for amounts up to $100,000. If the due date under paragraph (B) or (C) of Code Sec. 72(p)(2) for any repayment for the loan occurs during the period beginning on the date of the enactment of the bill and ending on December 31, 2020, the due date is delayed for one year. A qualified individual is defined above for coronavirus-related plan distributions. A provision waives the minimum required distribution rules for certain defined contribution plans and IRAs for calendar year 2020. This provision provides relief to individuals who would otherwise be required to withdraw funds from such retirement accounts during the economic slowdown due to COVID-19. For more information, see 170O.

        (Read Cheetah) »

IRS FAQs clarify filing and payment extension to July 15 due to COVID-19 for plans

The IRS has released frequently asked questions FAQs on the extension of the due date for filing income tax returns and payments to July 15, 2020 provided in IRS Notice 2020-18, I.R.B. 2020-15, April 6, 2020. The FAQs clarify the due date for contributions to IRAs and workplace-based retirement plans, as well as other issues. The extension of the filing deadline also extends the deadline for making contributions to individual retirement accounts (IRAs), as well as health savings accounts (HSAs) and Archer medical savings accounts (MSAs). Because the due date for filing Federal income tax returns is now July 15, 2020, taxpayers may make contributions to IRAs, HSAs, and Archer MSAs for 2019 at any time up to July 15, 2020. Because the 10% additional tax on amounts includible in gross income from distributions taken from IRAs or workplace-based retirement plans in 2019 is calculated, reported, and paid at the same time as the income tax owed on the amounts includible in gross income on the distribution, the reporting and payment of the 10% additional tax also has been extended to July 15, 2020 as a result of this relief. For more information, see 170n.

        (Read Cheetah) »

DOL announces that Tennessee company will pay more than $3.8 million in restitution to ESOP plan

The U.S. District Court for the Middle District of Tennessee, Nashville Division, has approved a settlement between the U.S. Department of Labor, Zander Group Holdings Inc., Stephen Thompson and Jeffrey Zander involving the company’s Employee Stock Ownership Plan (ESOP). An investigation by the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) found in September 2011, the Zander Group Holdings Inc. ESOP paid more than fair market value when it purchased a 49 percent interest in Zander Insurance in violation of the Employee Retirement Income Security Act (ERISA). In keeping with the parties’ settlement agreement, defendants will pay $3,818,181 in restitution to the ESOP. The department also assessed a civil penalty of $381,818 against the defendants. “Individuals and companies acting on behalf of retirement plan participants must act in good faith and in their workers’ best interests,” said EBSA Regional Director Isabel Culver, in Atlanta, Georgia. “The U.S. Department of Labor will continue to work to protect the retirement plans of hardworking Americans.” For more information, see ¶170j.

        (Read Cheetah) »

For more information, visit http://www.wolterskluwerlb.com/rbcs.