Retirement Plans

IRS Issues Final Regulations under Code Section 436

On October 15, 2009, the Internal Revenue Service published final regulations construing the new funding and benefit restriction requirements applicable to single employer defined benefit plans for plan years beginning after December 31, 2009, under Internal Revenue Code (“Code”) sections 430 and 436. Code sections 430 and 436 were added by the Pension Protection Act […]

Recent IRS Guidance Addresses Contribution of Unused Paid Time Off, Automatic Enrollment and Tax Notices

During his weekly address over this past Labor Day weekend, President Obama announced several new initiatives with the goal of providing American workers additional avenues to save for retirement. The details of those initiatives were subsequently published in several Internal Revenue Service (“IRS”) rulings and notices, which are summarized below. Contribution of Unused Paid Time […]

Supreme Court Holds that Pension Plan May Apply a Benefit Formula That Treats Pre-Pregnancy Disability Act Pregnancy Leave Less Favorably Than Other Medical Leave

Over thirty years ago, Congress passed the Pregnancy Discrimination Act (“PDA”), providing that differential treatment of pregnancy leave constitutes sex-based discrimination. It would be illegal now under the PDA to deny service credits for pension plan purposes for pregnancy leave, while granting such credits for other types of medical leave. The Supreme Court recently held, […]

IRS Issues Guidance on Suspension of Safe Harbor Nonelective Contributions

On May 18, 2009, the Internal Revenue Service issued proposed Treasury regulations that permit employers who sponsor a safe harbor 401(k) or 403(b) plan to reduce or suspend nonelective contributions in the event that the employer incurs a “substantial business hardship.” The proposed regulations are generally consistent with final regulations that permit an employer to […]

Treasury Department Issues Final Regulations on Automatic Enrollment Plans

Introduction The Pension Protection Act of 2006 (the “PPA”) added automatic contribution arrangements to the Internal Revenue Code (the “Code”) for use in Code section 401(k), 457(b) and 403(b) plans. On November 8, 2007, the Internal Revenue Service (“IRS”) issued proposed regulations relating to the automatic contribution arrangement provisions of the PPA (see our December […]

Kennedy v. DuPont: The Supreme Court Makes Life a Little Easier for Plan Administrators

In a victory for plan sponsors and administrators, the Supreme Court ruled recently in Kennedy v. Plan Administrator for DuPont Savings and Investment Plan, 129 S.Ct. 865 (2009), that retirement plans may rely on the plan terms and beneficiary designation forms in determining the proper recipient of survivor benefits. The ruling resolves a split among […]

IRS Issues 2008 Cumulative List

The Internal Revenue Service (the “IRS”) has released the 2008 Cumulative List of Changes in Plan Qualification Requirements (the “2008 Cumulative List”). In general, the Cumulative List identifies the changes in qualification requirements that must be taken into account when an application for an opinion, advisory or determination letter is submitted and reviewed by the […]

Pension Plan Limitations for 2009

The Internal Revenue Service has announced the annual cost-of-living adjustments applicable to dollar limitations for pension plans and other items for Tax Year 2009. With only one exception, the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment: The limitation on annual benefits under a defined benefit plan is increased from […]

Heroes Earning Assistance and Relief Tax Act Adds Benefits for Those in Military Service

On June 17, 2008, the Heroes Earning Assistance and Relief Tax Act of 2008 (HEART) (Pub. L. 110-245) was signed into law by the President. The HEART Act deals principally with the tax treatment of military personnel, with provisions applying to a wide range of Internal Revenue Code (“Code”) provisions. This article will deal primarily […]

Benefits Quiz

The following questions are designed to refresh, and to fine tune, your benefits expertise. Some of the answers (which are found below) may surprise you. 1. Failed QACA. Assume that a 401(k) plan is perfectly designed to implement a Qualified Automatic Contribution Arrangement (QACA) within the meaning of Internal Revenue Code (“Code”) section 401(k)(13). A […]

IRS Issues Guidance for New Distribution Requirements that Become Effective in 2008

The Internal Revenue Service (“IRS”) has issued Notice 2008–30, which provides guidance regarding distribution- related provisions of the Pension Protection Act of 2006 (“PPA”) that become effective in 2008. In question and answer format, Notice 2008–30 addresses the following: rollovers from eligible retirement plans to Roth IRAs; additional survivor annuity options; interest rate and mortality […]

Supreme Court Rules Defined Contribution Plan Participants Can Sue for Losses to Their Individual Accounts

The United States Supreme Court, in LaRue v. DeWolff, Boberg & Associates, Inc. (“LaRue”), has confirmed the right of a participant in a defined contribution plan to bring a claim for fiduciary breach under ERISA for losses to his or her individual plan account. In so ruling, the court overturned a decision by the Fourth […]

New Multiemployer Plan Disclosure Requirements — ERISA Section 101(k)

If they haven’t done so already, multiemployer pension plan administrators should start gathering actuarial and financial reports prepared for their plans in prior years so they can respond quickly to requests for such information pursuant to a new provision that became effective on January 1, 2008 for calendar year plans. The new provision, Section 101(k)(1) […]

IRS Proposes Regulations Regarding Automatic Contribution Arrangements

The Pension Protection Act of 2006 (the “PPA”) added automatic contribution arrangements to the Internal Revenue Code (the “Code”) for use in Code section 401(k), 457 and 403(b) plans. The Internal Revenue Service (the “IRS”) recently issued proposed regulations regarding certain aspects of these automatic contribution arrangements. The proposed regulations are effective for plan years […]

IRS Issues 2007 Cumulative List

The Internal Revenue Service (the “IRS”) has released the 2007 Cumulative List of Changes in Plan Qualification Requirements (the “2007 Cumulative List”). In general, the Cumulative List identifies the changes in qualification requirements that must be taken into account and that are required to be incorporated into the plan document when an application for an […]

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