Pension & Benefits NetNews – December 17, 2019

 

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Featured This Week

 

Employee Benefits Management News

 

  • IRS updates rules on using per diem rates to substantiate expenses incurred away from home
  • IRS extends filing deadlines, penalty relief for health coverage reporting forms
  • Employees owning health savings accounts grew balances regardless of most taking distributions: EBRI
  • Now is the time to repeal the Cadillac tax, organizations tell Congress

Pension Plan Guide News

 

  • IRS provides additional temporary nondiscrimination relief for closed defined benefit plan
  • PBGC Annual Report shows serious deterioration of multiemployer program’s financial condition
  • EBSA highlights results of enforcement and compliance activity in FY 2019

 

Employee Benefits Management News

 

IRS updates rules on using per diem rates to substantiate expenses incurred away from home

The IRS has updated Rev. Proc. 2011-47 to reflect changes made by the Tax Cuts and Jobs Act (TCJA) (P.L. 115-97). The guidance provides the rules for determining the amount of an employee’s ordinary and necessary business expenses for lodging, meals, and incidental expenses while traveling away from home. For details, see ¶2129Q.

        (Read Cheetah) »

IRS extends filing deadlines, penalty relief for health coverage reporting forms

In Notice 2019-63, the IRS automatically extends the due date for furnishing individuals with the 2019 Form 1095-B, Health Coverage, and the 2019 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, to March 2, 2020 from January 31, 2020. For more information, see ¶2129T.

        (Read Cheetah) »

Employees owning health savings accounts grew balances regardless of most taking distributions: EBRI

The average health savings account (HSA) balance in 2018 grew to $2,803 from $2,071 in the beginning of the year, even with distributions being taken and most funds being left in cash, rather than invested. That’s according to a study conducted by the Employee Benefit Research Institute (EBRI) exploring the savings, spending and investment behavior of employees owning HSAs. For more information see ¶2129V.

        (Read Cheetah) »

Now is the time to repeal the Cadillac tax, organizations tell Congress

More than 1,000 organizations including public and private sector employers, nonprofits, chambers of commerce, patient advocacy groups, insurers, brokers, unions, and multinational companies have signed a letter urging Senate Majority Leader Mitch McConnell (R-KY) and Senate Minority Leader Charles Schumer (D-NY) to include full repeal of the 40 percent Cadillac tax on employer-provided health care coverage in an end-of-year legislative package. For more information, see ¶2129W.

        (Read Cheetah) »

Pension Plan Guide News

 

IRS provides additional temporary nondiscrimination relief for closed defined benefit plan

The IRS has provided additional temporary nondiscrimination relief for certain closed defined benefit plans concerning benefits, rights, or features. Closed defined benefit plans are plans that are closed to new entrants as of a specified date, but continue to provide ongoing accruals for existing participants. The temporary relief applies for plan years ending after November 13, 2019, and beginning before January 1, 2021. The new temporary relief applies to a plan if it is a defined benefit plan providing ongoing accruals that was amended, by an amendment adopted before December 13, 2013, to provide that only employees who participated in the defined benefit plan on a specified date continue to accrue benefits under the plan. The temporary relief applies for plan years ending after November 13, 2019, and beginning before January 1, 2021. Note that the last plan year for which the new temporary relief applies is the same as the last plan year for which the relief under Notice 2014-5 (as extended) applies. Also, unlike Notice 2014-5, eligibility for the new temporary relief does not depend on the method used to satisfy the nondiscrimination requirements for the plan year beginning in 2013. For more information, see ¶17167w.

        (Read Cheetah) »

PBGC Annual Report shows serious deterioration of multiemployer program’s financial condition

The Pension Benefit Guaranty Corporation (PBGC) has released its Fiscal Year (FY) 2019 Annual Report, showing that the multiemployer insurance program has a record deficit of $65.2 billion at the end of FY 2019. The growth in the deficit for the PBGC’s multiemployer plan program from $53.9 billion at the end of FY 2018 was mostly due to lower interest rate factors, which increased the value of the PBGC’s benefit liabilities. The PBGC explains that the multiemployer insurance program is highly likely to become insolvent during FY 2025. “The multiemployer pension system faces a crisis that threatens the retirement security of millions of American workers, retirees, and their families. Without reforms, PBGC’s Multiemployer Insurance Program will run out of money. That will leave about 1.5 million participants and beneficiaries in already-failing plans with much less than the PBGC’s guaranteed level of benefits. The alarm bells are ringing, and legislative changes are necessary,” said PBGC Director Gordon Hartogensis. “The Administration stands ready to work with Congress to protect retirees in multiemployer plans, prevent the collapse of the multiemployer pension system, save the PBGC backstop, and prevent this crisis from recurring in the future.” However, there is good news about the PBGC single-employer insurance program. The financial condition of the program continues to improve, with a positive net position of $8.7 billion as of September 30, 2019. This increase from $2.4 billion at the end of FY 2018 is primarily due to premium and investment income, and a continued low level of losses from plan terminations. For more information, see ¶168L.

        (Read Cheetah) »

EBSA highlights results of enforcement and compliance activity in FY 2019

The Employee Benefits Security Administration (EBSA) has issued the results of its enforcement and compliance activity for employee benefit plans and participants in fiscal year (FY) 2019. EBSA’s oversight authority extends to nearly 694,000 retirement plans, approximately 2.2 million health plans, and a similar number of other welfare benefit plans, such as those providing life or disability insurance. These plans cover about 143 million workers and their dependents and include assets of over $9.8 trillion. In fiscal year (FY) 2019, EBSA recovered $2.5 billion for direct payment to plans, participants, and beneficiaries. These recoveries resulted from enforcement actions and voluntary fiduciary corrections, as well as amounts recovered through the abandoned plan program and informal complaint resolution. The largest recoveries came from enforcement actions and informal complaint resolutions—$2.02 billion and $510.0 million, respectively. For more information, see ¶168p.

        (Read Cheetah) »

 

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