Pension & Benefits NetNews – February 4, 2020

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Featured This Week

Employee Benefits Management News

  • HSA balances continue to grow
  • Contraceptive care exemption, Notre Dame Settlement Agreement, violated APA
  • Less than half of employees say their company provides remote work options
  • ERIC says ERISA preempts Seattle’s new employer health care mandate

Pension Plan Guide News

  • IRS clarifies interim amendments for hardship distributions, extends deadline
  • IRS issues guidance on third six-year remedial amendment cycle for pre-approved DB plans
  • IRS issues interim guidance on 2020 withholding from retirement and annuity distributions

Employee Benefits Management News

HSA balances continue to grow

Average health savings account (HSA) balances increased from $1,990 in 2011 to $2,803 in 2018, according to recent research from the Employee Benefit Research Institute (EBRI). For more information, see ¶2130P.

        (Read Cheetah) »

Contraceptive care exemption, Notre Dame Settlement Agreement, violated APA

A federal district court in Indiana has denied the motions to dismiss filed by HHS and Notre Dame University in a case brought by an Indiana women’s health organization challenging both the 2018 Final rules governing the contraceptive care exemption under the Patient Protection and Affordable Care Act (ACA), and a previous 2017 Settlement Agreement entered into between HHS and Notre Dame to resolve prior litigation over the cost-sharing provisions of the ACA. For more information, see ¶2130R.

        (Read Cheetah) »

Less than half of employees say their company provides remote work options

Less than half of professionals (47 percent) said their company provides the option to work off-site, according to research from global staffing firm Robert Half. Of those, 70 percent take advantage of the perk and work from home; an additional 6 percent do their job from another location, such as a cafe; or shared office space. For more information, see ¶2130S.

        (Read Cheetah) »

ERIC says ERISA preempts Seattle’s new employer health care mandate

The ERISA Industry Committee (ERIC) has filed an amended complaint in the U.S. District Court for the Western District of Washington challenging Seattle’s Municipal Code (SMC) 14.28, on grounds that the new law is preempted by ERISA. For more information see ¶2130U.

        (Read Cheetah) »

Pension Plan Guide News

IRS clarifies interim amendments for hardship distributions, extends deadline

The IRS has clarified which amendments are integral to a plan provision that fails to satisfy the qualification requirements by reason of a change made by recently published final hardship distribution regulations. The deadline for pre-approved plans to adopt an interim amendment relating to those regulations is extended to December 31, 2021. The preamble for final regulations under Code Sec. 401(k) and Code Sec. 401(m) states that the IRS expects that many plans’ hardship distribution provisions will need to be amended to reflect the changes in the final regulations. Plan amendments required under the final regulations include: (1) an amendment to remove a plan provision suspending an employee’s contributions following a hardship distribution of elective deferrals; and (2) an amendment requiring an employee’s representation relating to his or her need for a hardship distribution, if the plan does not already provide for such a representation. These “required amendments” must be effective for hardship distributions made on or after January 1, 2020. However, a required amendment may be implemented as early as the first day of the plan year that begins after December 31, 2018. For more information, see ¶17299w29.

        (Read Cheetah) »

IRS issues guidance on third six-year remedial amendment cycle for pre-approved DB plans

The IRS has announced that the third six-year remedial amendment cycle for pre-approved defined benefit plans begins on May 1, 2020 and ends on January 31, 2025. The IRS further states that the on-cycle submission period for providers to submit applications for opinion letters for pre-approved defined benefit plans begins on August 1, 2020 and ends on July 31, 2021. When the IRS review process for pre-approved defined benefit plans for the third six-year remedial amendment cycle has neared completion, the IRS will announce the date by which adopting employers must adopt the newly approved plans and, if they are otherwise eligible, apply for an individual determination letter. Providers of pre-approved plans may apply for new opinion letters once every six years under Rev. Proc. 2017-41, which sets forth the procedures for obtaining opinion letters for qualified pre-approved plans submitted with respect to the third (and subsequent) six-year remedial amendment cycles. For more information, see ¶17299w30.

        (Read Cheetah) »

IRS issues interim guidance on 2020 withholding from retirement and annuity distributions

The IRS has provided interim guidance for the 2020 calendar year on income tax withholding from periodic payments for pensions, annuities, and certain other deferred income under Code Sec. 3405(a). Under the guidance: (1) information requested for periodic payments on the 2020 Form W-4P (Withholding Certificate for Pension or Annuity Payments) will generally continue to parallel the information requested on Form W-4 prior to 2020 (other than the no-withholding election on Line 1); (2) payees of periodic payments can use either the Form W-4P worksheets or the IRS Tax Withholding Estimator (www.irs.gov/W4App) to determine their entries on 2020 Form W-4P; and (3) certain withholding tables and computational procedures in the new 2020 Publication 15-T (Federal Income Tax Withholding Methods) that apply to a 2019 or earlier Form W-4 will also work with the 2020 Form W-4P. The guidance also includes the withholding rules for when the payee has not furnished a withholding certificate to the payor (i.e., the “default” rate of withholding). For more information, see ¶17168j.

        (Read Cheetah) »

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