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403(b) Remedial Amendment Period – Long Awaited IRS Guidance is Here! March 31, 2020 will be the last day of the initial remedial amendment period (RAP) for 403(b) plans. The remedial amendment period is the time allowed for employers to correct […] Key words: ,,,,,,,

DLGF Reporting Requirement Since 2014, the Indiana Department of Local Government Finance (DLGF) has required political subdivisions to report by March 1st of each year their Other Post-Employment Benefits (OPEB) liabilities online through […] Key words: ,,,,

Parnership & C-Corporation Reminder: Tax Return Filing Date Changes Beginning with fiscal years ending after December 31, 2015 (the 2016 tax season), the filing deadlines have changed, which is good news. The changes are a result of years of […] Key words: ,,,,,,,,,

21st Century Cures Act – A Welcome Gift to Small Employers! On December 13, 2016, President Obama signed the 21st Century Cures Act (“Act”). Tucked deep away, towards the end of the law, is a welcome gift to small employers! The […] Key words: ,,,,,

2017 Cost of Living Adjustments The IRS has released the cost of living adjustments that affect the dollar limits for both retirement plans and health & welfare plans for the 2017 tax year. Most limits […] Key words:

IRS Announces Regulations For Lump Sum Distributions Some defined benefit plans offer no lump sum payment option. For the many that do, the choice is an “all or nothing” lump sum payment or annuity payments (fixed payments […] Key words: ,,

IRS Extends Temporary Nondiscrimination Relief Background Many employers have closed their defined benefit (DB) plans to new participants. This has been done to reduce costs and lower future funding duties. These closures are often called […] Key words: ,,,,,,,,,

IRS Updates Employee Plans Compliance Resolution System (EPCRS) We do not live in an error-free world. While it would be great if all retirement plans could be amended one time, and one time only, it is not reality. […] Key words: ,,,,

IRS Relief for Missed Rollover Deadline The IRS just made what many experts are calling a surprise move. Savers who miss a 60-day deadline for rolling over their IRA or workplace retirement savings plan, like a […] Key words: ,,,

Deadline for PPA Restatements The IRS requires all retirement plans to be restated to ensure compliance with current law and regulations in accordance with timing set by the IRS. The current round of restatements […]

Department of Labor Finalizes “Fiduciary Rule” On April 6, 2016, the Department of Labor (DOL) announced the final fiduciary rule which has meaningful implications for the definition of a fiduciary as it applies to investment advice. […]

Impact of Obergefell v. Hodges on Health and Welfare Plans The IRS recently issued Notice 2015-86, providing initial guidance on the impact of the U.S. Supreme Court’s decision in Obergefell v. Hodges on health and welfare plans, and further guidance […] Key words: ,,

Internal Revenue Service Issues New Guidance on Mid-Year Amendments to Safe Harbor Plans The Internal Revenue Service (IRS) has historically been very restrictive with respect to what changes could be made mid-year to a safe harbor plan.  See our previous article.   However, […] Key words: ,,,

Internal Revenue Service Announces Changes to Voluntary Correction Program Compliance Fees Internal Revenue Service Announces Changes to Voluntary Correction Program Compliance Fees When mistakes are made with respect to a qualified plan, one option that is available to a plan sponsor […] Key words: ,,,,

IRS gives guidance on how to apply retroactive transit benefits for 2015 The IRS issued Notice 2016-6 to provide procedures for employers on how to actually apply transit benefit adjustments for 2015 stemming from The Protecting Americans from Tax Hikes Act of […] Key words: ,,,

IRS Q&A on Health Reform Discusses HRAs and Health FSA Carryover On December 16, 2015, the Internal Revenue Service issued Notice 2015-87 containing guidance on a wide-range of topics under the Affordable Care Act (ACA).  The Notice reaffirms existing guidance on […] Key words: ,,

Transit Benefit Retroactive Extension for 2015 Earlier this year, the IRS extended retroactively for 2014 a measure that increases the maximum monthly exclusion amount for mass transit passes and van pool benefits from $130/month to $250/month. […] Key words: ,,

Impact of Obergefell v. Hodges on Employee Benefit Plans The United States Supreme Court (“Court”) ruled in Obergefell v. Hodges (“Obergefell”) that same-sex marriage bans are unconstitutional. The decision in Obergefell is a continuation of the Court’s expansion of […] Key words: ,,,

Bipartisan Budget Act of 2015 Increases PBGC Premiums The recently enacted Bipartisan Budget Act of 2015 will raise the per-participant flat premium rate for plan years 2017-2019. Beginning in 2020, PBGC premiums will be indexed for inflation. The […] Key words: ,

Affordable Care Act Cadillac Tax Delayed to 2020 On Friday, December 18, 2015, President Obama signed a $1.1 trillion omnibus spending bill, which included a provision to delay the Affordable Care Act’s (ACA) “Cadillac tax” on high-cost employer […] Key words: ,,,

2016 Cost of Living Adjustments Announced The IRS has released the cost of living adjustments that affect the dollar limits for both retirement plans and health & welfare plans for the 2016 tax year. Most limits […] Key words: ,,

PPA Restatements for Defined Contribution Plans The IRS requires all retirement plans to be restated periodically to ensure that a plan accurately reflects current regulations and legislation. The current round of restatements is referred to as […] Key words: ,

Revisions to the IRS Determination Letter Program Historically, a plan sponsor could get assurance that their retirement plan was in compliance with current laws and regulations by requesting a favorable determination letter from the IRS, which allowed […] Key words: ,,,

Significant Changes to GASB Reporting of OPEB Liabilities Other Post-Employment Benefit (OPEB) accounting standards are once again in the spot light. The Government Accounting Standards Board (GASB) issued two pronouncements (GASB statement numbers 74 and 75) in June […] Key words: ,

IRS Limits Lump Sum Distribution Options In Notice 2015-49 the IRS placed limits on the ability of a plan to offer lump sums to participants that are receiving annuity payments from a defined benefit plan.  The […] Key words: ,,,,

Monitoring Differing Terms in your SPD vs. the Plan Document A recent court case out of the Sixth Circuit (Pearce v. Chrysler Group LLC Pension Plan) reminds plan sponsors to carefully monitor the terms and provisions used in the retirement […] Key words: ,,

Understanding Participant Behavior in Lump Sum Cashout Windows In 2014 many plan sponsors offered their vested and terminated participants the option of electing a lump sum distribution instead of waiting until retirement to receive their benefits.   While this […] Key words: ,,

Why Does Moving From A Defined Benefit to Defined Contribution Often Result in Benefit Cuts? Let’s assume that a defined contribution (DC) plan has been designed with the same level of employer contribution as a defined benefit (DB) plan the employer previously sponsored.  A common […] Key words: ,

Plan Sponsors Must “Furnish” Summary Plan Descriptions (SPD) to Participants In today’s age, the push is being made by everyone to furnish communications electronically.  For retirement plans that are subject to ERISA, communications may be furnished electronically as long as […] Key words: ,,

Plan Sponsors Must Track Loans and Hardship Distributions The IRS has indicated in Employee Plans News 2015-4, that it is ultimately the plan sponsor’s responsibility to track loans and hardship distributions from their retirement plan(s). According to the […] Key words: ,

Supreme Court Strengthens Plan Sponsors’ Duty to Monitor Investments On May 18, 2015, the Supreme Court (“Court”) ruled in Tibble v. Edison International that ERISA’s 6-year statute of limitations period had not passed for plaintiffs that were pursuing a […] Key words: ,,,

IRS Updates Correction Program for Certain Failures Regarding Elective Deferrals The IRS has issued an update to the Employee Plans Compliance Resolution System (EPCRS), which is the IRS’ voluntary correction program.  Revenue Procedure 2015-28 changes the correction method for failure […] Key words: ,,

IRS Releases 2016 HSA Contribution Limits The IRS has released the 2016 cost-of-living increases for Health Savings Accounts (HSAs) and High Deductible Health Plans (HDHPs).  The 2016 HSA contribution limits are: Self-only coverage – $3,350 (no […] Key words: ,,,

DOL Changes Deadline for Participant Fee Disclosure Recently, the Department of Labor (“DOL”) announced a revision to the timing rule plan administrators must comply with when delivering annual participant disclosures under ERISA 404(a)(5). Under 404(a)(5), administrators of […] Key words: ,,

How are Low Rates Impacting Pension Buyouts? Corporate bond rates are at historic lows.  Pension plans apply these rates to discount future expected benefit payments.  Thus, in a low-interest rate environment, plans see their liabilities increase.  This […] Key words: ,,

Pension Plan De-Risking: Pension Settlements A pension settlement (also called a pension buyout) occurs when a plan sponsor transfers its liabilities to an insurance company through the purchase of a group annuity contract.  It allows […] Key words: ,,,

2015 Transit Benefit Update IRS Notice 2015-2 extends retroactively for 2014 a measure that increases the maximum monthly exclusion amount for mass transit passes and van pool benefits from $130/month to $250/month. This was […] Key words:

IRS Updates Employee Plans Compliance Resolution System The IRS has issued an update to its voluntary correction program for retirement plans, the Employee Plans Compliance Resolution System (EPCRS).  Revenue Procedure 2015-27 is meant to be a modification, […] Key words: ,,

IRS Extends Testing Relief for Closed Defined Benefit Plans Often, when a defined benefit (DB) plan excludes new employees, those new employees will participate in a defined contribution (DC) plan.  Over time, as the proportion of the DB plan […] Key words: ,

What information does a plan fiduciary have the duty to provide? There are a number of things that the fiduciary is required to disclose to participants and beneficiaries.  The disclosure of such items is governed by Title I of ERISA.  The […] Key words: ,,

What does it mean to De-Risk my Pension Plan? The term de-risking is used in the pension world to describe plan sponsor activities that reduce financial risks.  These risks could include interest rate changes, fluctuations in investment portfolios, increases in […] Key words: ,,,,

What happens if I don’t restate my retirement plan? The IRS requires the periodic restatement of a qualified retirement plan so the document will contain the latest required provisions.  Without these required provisions, the document could cause the plan […] Key words: ,,,

Transit Benefit 2015 Update IRS Notice 2015-2, issued in January 2015, extends retroactively for 2014 a measure that increases the maximum monthly exclusion amount for mass transit passes and van pool benefits from $130/month […] Key words: ,

IRS Releases 2015 COLA Adjustments for Health FSAs, Transportation Benefits and More The IRS has issued their annual limits for certain employee fringe benefits in Revenue Procedure 2014-61.  This includes an increase of the dollar amount employees may contribute to health FSAs, […] Key words: ,,,

New Cash Balance Regulations Background Cash balance plans are defined benefit plans in which a participant’s benefit is composed of an annual employer contribution and an interest credit (this credit is guaranteed and not […] Key words: ,,,

Two New Election Changes for Cafeteria Plans Beginning September 18, 2014, cafeteria plans were permitted to let employees prospectively revoke an election for coverage under a group health plan in two new situations.  These are in addition […] Key words: ,

HR Executives: Are You Ready For the Good Times Again? It should come as no surprise to Human Resource (HR) executives in most organizations that the last 6 years have been lean times for HR departments and initiatives.  When organizations […] Key words: ,,,

ERISA Fee Case Goes to Supreme Court The U.S. Supreme Court recently agreed to review Tibble v. Edison International, a case involving retirement fees alleged to be excessive.  The case arrives at the Court after two lower […] Key words: ,,,

2015 Cost-Of-Living Adjustments Announced  2015 Cost of Living Adjustments Announced  The IRS and Social Security Administration have released the cost of living adjustments that affect the dollar limits for retirement plans for the 2015 […] Key words: ,,

Pension Funding Relief: What’s In It for My Plan? On August 8, President Obama signed the Highway and Transportation Funding Act of 2014.  This new law provides defined benefit plan sponsors with extended relief from the low interest rate […] Key words: ,,,

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The Nyhart Knowledge Center is a free resource to CFOs and HR executives to help you resolve and understand the complex issues regarding your actuarial and employee benefit questions. The Knowledge Center is an archive of answers from our team of actuaries, administrators and retirement consultants and is intended to help provide you with the background you need.