Pension & Benefits NetNews – September 22, 2020

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Featured This Week

Employee Benefits Management News

  • San Francisco issues 2021 employer health care spending rates
  • ERIC appeals Seattle employer health care mandate decision
  • U.S. employers explore overhauls to employee benefits to preserve jobs, budgets in 2021
  • After federal court partly invalidates FFCRA rules, DOL makes regulatory changes

Pension Plan Guide News

  • PBGC final regs modify assumptions PBGC uses to determine de minimis lump-sum benefits
  • IRS issues proposed regs on plan loan offset rollovers
  • PBGC releases final regs on procedures for issuing guidance

Employee Benefits Management News

San Francisco issues 2021 employer health care spending rates

The City of San Francisco has announced the 2021 rates for its employer health care spending law, whereby employers must either contribute a specified amount toward their employees’ health care costs on a regular basis or pay into a city health care fund for San Francisco residents. For more information, see ¶2136N.

        (Read Cheetah) »

ERIC appeals Seattle employer health care mandate decision

The ERISA Industry Committee (ERIC) has filed an appeal to the Ninth Circuit to overturn a lower court’s dismissal of its challenge to Seattle’s health care mandate. For more information, see ¶2136P.

        (Read Cheetah) »

U.S. employers explore overhauls to employee benefits to preserve jobs, budgets in 2021

COVID-19 and the economic downturn have forced U.S. employers to examine cuts that were considered unthinkable at the beginning of the year, according to Gallagher’s 2020 Benefits Strategy & Benchmarking Survey. For details, see ¶2136Q.

        (Read Cheetah) »

After federal court partly invalidates FFCRA rules, DOL makes regulatory changes

In the aftermath of a New York federal district court’s August 3, 2020, ruling invalidating certain aspects of the temporary rule on Families First Coronavirus Response Act requirements, the Labor Department has issued “revisions and clarifications to the temporary rule.” For details, see ¶2136T.

        (Read Cheetah) »

Pension Plan Guide News

PBGC final regs modify assumptions PBGC uses to determine de minimis lump-sum benefits

The Pension Benefit Guaranty Corporation (PBGC) has issued final regulations that modify the assumptions it uses to determine de minimis lump-sum benefits in PBGC-trusteed terminated single-employer defined benefit plans. The PBGC states that the changes are intended to modernize the methodology used to determine de minimis lump-sums in terminated underfunded single-employer plans. Specifically, under the final regulations, the PBGC adopts the interest and mortality assumptions from Code Sec. 417(e)(3) (and ERISA Sec. 205(g)(3)) for this purpose and discontinues monthly calculation and publication of the PBGC’s lump-sum interest rate assumption. The PBGC is providing a delayed effective date of January 1, 2021. The amendments to the regulations that affect the PBGC’s calculation and payment of lump-sum benefits apply to trusteed plans with termination dates on or after January 1, 2021. Thus, this means that the PBGC will continue to publish monthly legacy interest rates for both appendix B and appendix C through December 2020. For more information, see ¶174L

        (Read Cheetah) »

IRS issues proposed regs on plan loan offset rollovers

The IRS has issued proposed regulations relating to amendments made by the Tax Cuts and Jobs Act (TCJA, P.L. 115-97) that extend the rollover period for a qualified plan loan offset. The regulations are proposed to apply when finalized but can be relied upon until then. Written or electronic comments and requests for a public hearing must be received by October 5, 2020. The proposed regulations provide that a taxpayer (or spousal distributee) with an eligible rollover distribution that is a qualified plan loan offset (QPLO) amount may roll over any portion of the distribution to an eligible retirement plan, including another qualified retirement plan (if that plan permits it) or an IRA, by the taxpayer’s deadline for filing income taxes for the year of the distribution, including extensions. In addition, the taxpayer may qualify for an extended period past his or her tax filing due date in which to complete a rollover even if the taxpayer does not request a filing extension. The proposed regulations define a QPLO amount as a plan loan offset amount that satisfies two requirements. First, the plan loan offset amount must be treated as distributed from a qualified employer plan to an employee or beneficiary solely by reason of the termination of the qualified employer plan, or the failure to meet the repayment terms of the loan from the plan because of the severance from employment of the employee. Second, the plan loan offset amount must relate to a plan loan that met the plan loan requirements immediately prior to the termination of the qualified employer plan or the severance from employment of the employee, as applicable. For more information, see ¶20265i.

        (Read Cheetah) »

PBGC releases final regs on procedures for issuing guidance

The Pension Benefit Guaranty Corporation (PBGC) has issued final regulations, which implement the requirements of Executive Order (EO) 13891, “Promoting the Rule of Law Through Improved Agency Guidance Documents.” EO 13891 requires agencies to set forth processes and procedures for issuing guidance documents. The final regulations add a new 29 CFR part 4908 to the Code of Federal Regulations and provide the following procedures: (1) Guidance documents will include specified information, including a statement that a guidance document does not bind the public, and will be posted at www.pbgc.gov/guidance; (2) Significant guidance documents will have a 30-day public notice and comment period, be reviewed by the Office of Management and Budget (OMB), and meet other requirements; and (3) Public access to guidance and ability to request withdrawal or modification of a guidance document. For more information, see ¶174b.

        (Read Cheetah) »

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