Pension & Benefits NetNews – March 3, 2020

 

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Featured This Week

 

Employee Benefits Management News

 

  • SIFL rates issued for the first half of 2020
  • CMS proposes criteria, calculation for Medicare secondary payer reporting penalties
  • IRS not subject to any limitations period for assessing employer shared responsibility payments
  • Proposed regulations reflect TCJA changes to entertainment and meal deductions

Pension Plan Guide News

 

  • IRS issues relief for reporting required minimum distributions for IRAs in 2020
  • PBGC provides premium filing guidance for CSEC plans for 2019 and 2020 plan years
  • DOL adjusts ERISA civil monetary penalties for 2020 in final regs
  • PBGC final regs increase civil penalties for failure to provide certain notices for 2020

 

Employee Benefits Management News

 

SIFL rates issued for the first half of 2020

The Department of Transportation has released the applicable terminal charge and standard industry fare level (SIFL) mileage rates for January 1, 2020 through June 30, 2020. These rates will be used by the IRS to determine the value of noncommercial flights on employer-provided aircraft. For the rates, see ¶2131I.

        (Read Cheetah) »

CMS proposes criteria, calculation for Medicare secondary payer reporting penalties

The Centers for Medicare and Medicaid Services (CMS) has issued a proposed rule that would specify how and when CMS must calculate and impose civil money penalties when group health plan and non-group health plan responsible reporting entities (RREs) fail to meet their Medicare secondary payer (MSP) reporting obligations under certain circumstances. For more information, see ¶2131K.

        (Read Cheetah) »

IRS not subject to any limitations period for assessing employer shared responsibility payments

There is no applicable statute of limitations on assessable payments under Code Sec. 4980H because there is no tax return filed to report an employer’s liability for the employer shared responsibility payment (ESRP), according to a memo issued by the IRS’s Office of Chief Counsel. For details, see ¶2131N.

        (Read Cheetah) »

Proposed regulations reflect TCJA changes to entertainment and meal deductions

The IRS has issued proposed regulations that reflect the significant changes the Tax Cuts and Jobs Act made to the Code Sec. 274 deduction for travel and entertainment expenses. For more information see ¶2131O.

        (Read Cheetah) »

Pension Plan Guide News

 

IRS issues relief for reporting required minimum distributions for IRAs in 2020

The IRS has released guidance for financial institutions on reporting required minimum distributions (RMDs) for 2020 after the amendment of Code Sec. 401(a)(9) by the SECURE Act, enacted as part of the Further Consolidated Appropriations Act, 2020 (P.L. 116-94). The IRS explains that, if an IRA owner has an RMD due for 2020, the financial institution that is the trustee, custodian, or issuer maintaining the IRA must have furnished a RMD statement to the IRA owner by January 31, 2020 that informs the IRA owner of the date by which the RMD must be distributed, and either provides the amount of the RMD or offers to calculate that amount upon request. Also, that financial institution must file a 2019 Form 5498 (IRA Contribution Information) by June 1, 2020 and indicate by a check in Box 11 that an RMD is required for 2020. The financial institution may also choose to provide further information in Box 12a (RMD Date) and Box 12b (RMD Amount). The IRS states that the RMD statement should not be sent to IRA owners who will attain age 70½ in 2020. However, recognizing the short amount of time after the enactment of the SECURE Act that financial institutions have to change their systems for furnishing the RMD statement, the IRS is providing relief. Under this relief, if a financial institution provides an RMD statement to an IRA owner who will attain age 70½ in 2020 (including by providing a Form 5498), then the IRS will not consider such a statement to have been provided incorrectly, but only if the IRA owner is notified by the financial institution no later than April 15, 2020, that no RMD is required for 2020. For more information, see ¶17168m.

        (Read Cheetah) »

PBGC provides premium filing guidance for CSEC plans for 2019 and 2020 plan years

The Pension Benefit Guaranty Corporation (PBGC) has issued guidance for cooperative and small-employer charity (CSEC) plans (as defined in ERISA Sec. 210(f)(1)) on filing PBGC premiums for 2019 and 2020 plan years that reflect the premium changes provided by the SECURE Act, enacted as part of the Further Consolidated Appropriations Act, 2020 (P.L. 116-94). This guidance supersedes any inconsistent information with respect to CSEC plans in PBGC’s premium filing instructions. The PBGC states that it will amend its premium rates regulation (29 CFR part 4006) later in a rulemaking to incorporate the SECURE Act premium changes. Starting with plan years beginning in 2019, premiums for CSEC plans are determined differently than for other single-employer plans. Specifically: (1) The flat-rate premium is $19 per participant. (2) The variable-rate premium is $9 per $1,000 of unfunded vested benefits (UVBs). (3) The liability underlying the UVB calculation (i.e., the present value of vested benefits) is determined using the plan’s funding assumptions (e.g., the plan’s selected discount rate and mortality table). See ERISA Sec. 306(j)(5)(C). (4) Premium rates are not indexed after 2019. For more information, see ¶19975z38.

        (Read Cheetah) »

DOL adjusts ERISA civil monetary penalties for 2020 in final regs

The Department of Labor (DOL) has issued final regulations that adjust the amounts of ERISA civil monetary penalties assessed or enforced under its regulations for inflation by the Employee Benefits Security Administration (EBSA) for 2020. The adjustments are pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The increased penalty amounts apply to any penalties assessed after January 15, 2020. For more information, see ¶24811o.

        (Read Cheetah) »

 

PBGC final regs increase civil penalties for failure to provide certain notices for 2020

The Pension Benefit Guaranty Corporation (PBGC) has issued final regulations that adjust the civil monetary penalties provided in ERISA Secs. 4071 and 4302 for inflation. The maximum daily penalty for failing to provide notices or other material information under ERISA Sec. 4071 has increased from $2,194 to $2,233, and the maximum penalty for failure to provide certain multiemployer plan notices under ERISA Sec. 4302 has risen from $292 to $297. The increases apply to penalties assessed after January 15, 2020. The PBGC notes that, although the maximum penalties are increasing, it is uncommon for the PBGC to assess information penalties. The PBGC’s goal is to encourage compliance, not to penalize plans that inadvertently forget to file information. Generally, when the PBGC does assess an information penalty, the amount is significantly less than the maximum allowed. For more information, see ¶24811p.

        (Read Cheetah) »

 

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