Pension & Benefits NetNews – July 28, 2020

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Featured This Week

Employee Benefits Management News

  • Proposed regulations would allow grandfathered plans to make some cost-sharing changes without losing status
  • IRS releases guidance on reporting qualified sick and family leave wages
  • DOL soliciting information on paid family and medical leave
  • DOL looking for information on FMLA guidance, announces revised forms

Pension Plan Guide News

  • IRS temporarily allows certain retirement plan participants to sign elections remotely
  • IRS provides COVID-19 relief, clarifying mid-year safe harbor plan amendments
  • DOL releases RFI on PT issues involving pooled employer plans under SECURE Act and other multiple employer plans

Employee Benefits Management News

Proposed regulations would allow grandfathered plans to make some cost-sharing changes without losing status

The Departments of the Treasury, Labor, and Health and Human Services have jointly issued proposed amendments to the grandfathered plan status regulations under the Patient Protection and Affordable Care Act (ACA). The changes are designed to provide greater flexibility for grandfathered health plans to make changes to certain types of cost-sharing requirements without causing a loss of grandfather status. For more information, see ¶2135B.

        (Read Cheetah) »

IRS releases guidance on reporting qualified sick and family leave wages

The IRS has released guidance to employers in connection with the requirement to report the amount of qualified sick and family leave wages paid to employees under the Families First Coronavirus Response Act (Families First Act) (P.L. 116-127). Employers are required to report these amounts either on Form W-2, Box 14, or on a separate statement. For more information, see ¶2135C.

        (Read Cheetah) »

DOL soliciting information on paid family and medical leave

The Department of Labor is seeking information on paid leave—specifically, paid family and medical leave to care for a family member, or for one’s own health. For details, see ¶2135F.

        (Read Cheetah) »

DOL looking for information on FMLA guidance, announces revised forms

The Labor Department is seeking information about its regulations implementing the Family and Medical Leave Act of 1993 in order “to gather information concerning the effectiveness of the current regulations and to aid the Department in its administration of the FMLA,” according to a notice published in the Federal Register on July 17, 2020. For more information see ¶2135G.

        (Read Cheetah) »

Pension Plan Guide News

IRS temporarily allows certain retirement plan participants to sign elections remotely

The IRS has released guidance that provides temporary administrative relief to help certain retirement plan participants or beneficiaries who need to make participant elections by allowing flexibility for remote signatures. Specifically, the guidance provides participants, beneficiaries, and administrators of qualified retirement plans and other tax-favored retirement arrangements with temporary relief from the physical presence requirement in IRS Reg. §1.401(a)-21(d)(6) for any participant election, including a spousal consent required under Code Sec. 417 that is: (1) witnessed by a notary public in a state that permits remote notarization, or (2) witnessed by a plan representative using certain safeguards. The guidance accommodates local shutdowns and social distancing practices and is intended to facilitate the payment of coronavirus-related distributions and plan loans to qualified individuals, as permitted by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (P.L. 116-136). For more information, see ¶17169o.

        (Read Cheetah) »

IRS provides COVID-19 relief, clarifying mid-year safe harbor plan amendments

The IRS has clarified and provided relief for mid-year amendments reducing safe harbor contributions for a Code Sec. 401(k) or Code Sec. 401(m) plan that decreases only contributions made on behalf of highly compensated employees (HCEs). The IRS also provides temporary relief in connection with the ongoing Coronavirus Disease 2019 (COVID-19) pandemic from certain requirements that would otherwise apply to a mid-year amendment to a safe harbor Code Sec. 401(k) or Code Sec. 401(m) plan adopted between March 13, 2020, and August 31, 2020, that reduces or suspends safe harbor contributions. An updated safe harbor notice and an election opportunity must be provided even if the change is only for highly compensated employees. Coronavirus COVID-19 relief applies if a plan amendment is adopted between March 13, 2020, and August 31, 2020. For nonelective contribution plans, the supplemental notice requirement is satisfied if provided no later than August 31, 2020, and the amendment that reduces or suspends contributions is adopted no later than the effective date of the reduction or suspension. For more information, see ¶17169y.

        (Read Cheetah) »

DOL releases RFI on PT issues involving pooled employer plans under SECURE Act and other multiple employer plans

The U.S. Department of Labor (DOL) has issued a Request for Information (RFI) on prohibited transactions involving pooled employer plans (PEPs) under the Setting Every Community Up for Retirement Enhancement (SECURE) Act and other multiple employer plans. The DOL is considering whether to propose a class exemption on its own motion to cover prohibited transactions (PTs) involving PEPs and MEPs. The RFI is an opportunity for the public to provide data and information that may be used to evaluate whether the Department’s Employee Benefits Security Administration (EBSA) should propose a new prohibited transaction class exemption. The RFI seeks information on the possible parties, business models, and conflicts of interest that respondents anticipate will be involved in the formation and ongoing operation of PEPs. As a result of the SECURE Act amendments to ERISA and the Code, a variety of service providers may decide to become pooled plan providers, such as banks, insurance companies, broker-dealers, and similar financial services firms (including pension recordkeepers and third-party administrators). The RFI seeks information regarding the possible parties, business models, conflicts of interest, plan investments, number and type of employers likely to join a PEP or MEP, and prohibited transactions that might exist in connection with PEPs, for the purpose of assessing the need for new prohibited transaction exemptions or amendments to existing exemptions. The DOL is also requesting information on similar issues involving multiple employer plans (MEPs) sponsored by employer groups or associations or professional employer organizations. For more information, see ¶172n.

        (Read Cheetah) »

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