Benefits Blast

The IRS recently released Rev. Proc. 2024-25, which provides the inflation-adjusted limits related to health savings accounts (HSAs), high deductible health plans (HDHPs), and excepted benefit health reimbursement arrangements (HRAs) for the 2025 calendar year.

The global economy is beset by challenges that will continue to affect companies throughout 2023. Growth has slowed, high inflation is widespread, and increasing interest rates are likely to worsen financial vulnerabilities. Companies reckoning with this difficult business environment are seeking to reduce costs, including through layoffs, such as those implemented throughout the financial and technology industries.

On October 26, 2022, the Securities and Exchange Commission (“SEC”) adopted the long-awaited new Rule 10D-1 (the “Final Rule”), implementing the incentive-compensation clawback rules mandated by Section 10D of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), originally added to the Exchange Act by Section 954 of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd–Frank Act”). The Final Rule is separate and distinct from the clawback mandates set forth in the Sarbanes–Oxley Act.

The Benefits Bulletin provides timely and consistent updates on industry hot topics

Questions constantly arise as to whether certain expenses incurred by an employee benefit plan can be paid from the assets of the plan or by the plan sponsor. Expenses incurred by an employee benefit plan fall into two broad categories: settlor expenses and fiduciary expenses. Fiduciary expenses can be paid from plan assets; however, settlor expenses cannot be paid from plan assets. Improperly paying expenses with plan assets could constitute a breach of fiduciary duty. It is, therefore, important for plan sponsors to correctly identify which expenses can be charged to the plan and which cannot.

On November 1, 2018, the Internal Revenue Service announced cost-of-living adjustments that affect dollar limitations for qualified retirement plans under the Internal Revenue Code (the “Code”). The increases take effect for tax year 2019. Employers who sponsor retirement plans should take note of the adjustments.

Yesterday, in Field Assistance Bulletin No. 2018-02, the Department of Labor’s Employee Benefit Security Administration  issued a temporary non-enforcement policy with regard to the ERISA Fiduciary Rule.

The U.S. Department of Labor’s Employee Benefits Security Administration recently issued Field Assistance Bulletin No. 2018-01, in part intended to provide guidance to EBSA national and regional offices on prior DOL Interpretive Bulletins that addressed the appropriate role of environmental, social and governance factors when making plan investment decisions.

The IRS recently updated its retirement plan correction guidance, commonly known as the Employee Plans Compliance Resolution System (EPCRS). Many of the changes to EPCRS are conforming changes that reflect the IRS’s recent suspension of the determination letter application process for individually designed plans. In addition, penalties and sanctions imposed under EPCRS are being modified and may, in some cases, make correcting plan failures costlier. 

A recent federal court case considered an issue that arises from time to time when employers want to terminate their non-qualified plans: Can the employer terminate the plan and pay out all benefits in a lump sum despite participants’ elections of other forms of benefit?