Benefits Blast

Since late 2023, there has been a surge in litigation challenging the use of forfeitures in retirement plans.

Last week, the IRS released Notice 2022-55 to announce cost-of-living adjustments to the indexed dollar limits applicable to retirement plans. For the second year in a row, the contribution and benefit limits will increase significantly. The chart below shows how the new limits compare to those of the previous two years.

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

Under current law, certain participant elections must be witnessed in the physical presence of a plan representative or notary public. However, local shutdowns and social distancing practices in response to the Coronavirus (COVID-19) pandemic have made compliance challenging.

On May 21, 2020, the Department of Labor (the DOL) issued final regulations allowing plan sponsors of retirement plans covered by the Employee Retirement Income Security Act of 1974 (ERISA) to post plan disclosures online or deliver them to participants, spouses, and beneficiaries by email, as a default.

Section 2202 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), enacted on March 27, 2020, provides for special distribution options and rollover rules for retirement plans and IRAs, and expands permissible loans from certain retirement plans. We have previously written on the impact of the CARES Act on retirement plans.

Most retirement plans calculate benefits on the basis of a participant’s pay or compensation. For example, in a profit-sharing plan, an employer typically contributes a percentage of the employee’s pay each year, or, in a defined benefit pension plan, the employee’s benefit will be based on his or her final average pay or career average pay.

The Setting Every Community Up for Retirement Enhancement Act (the “SECURE Act”) is one of the most significant pieces of retirement plan legislation to be enacted in many years. The SECURE Act brings some long-awaited gifts for 2020, but includes a few lumps of coal for plan sponsors as well. We highlight in this blog post some of the provisions of the SECURE Act that are most likely to affect large, single-employer retirement plans. 

On November 6, 2019, the Internal Revenue Service (IRS) released Notice 2019-59, which states the 2020 dollar limitations on benefits and contributions under qualified retirement plans. The Internal Revenue Code (the “Code”) permits employers that sponsor qualified retirement plans and employees who participate in such plans tax benefits up to the stated dollar limits.

What is an in-plan Roth 401(k) conversion and why is it relevant today? During this episode of Winston & Strawn’s Benefits Blast Podcast, Employee Benefits & Executive Compensation Attorney Nancy Gerrie discuss Roth conversions inside a 401(k) plan and provide key takeaways for employers who are considering adopting this feature in their 401(k) plan.

What is the definition of compensation in a retirement plan used for and why does it matter? In this episode of Winston & Strawn’s Benefits Blast Podcast, Employee Benefits & Executive Compensation Partners Steve Flores and Nancy Gerrie discuss the different definitions of compensation used in retirement plans, including safe harbor and non-safe harbor and the complications that can arise if plan administrators use the wrong one.  

Winston & Strawn is pleased to announce the launch of the Benefits Blast Podcast. During each episode, our attorneys will provide a brief update on innovations, trends, and developments in executive compensation and employee benefits law. Whether you’re a human resource professional, fiduciary, administrator, or on a board of directors, learn everything you need to know about health savings accounts, retirement plans, fringe benefits, telemedicine, and more. Our episodes will be brief, digestible, and published biweekly.

On February 19, 2019, the Supreme Court of the United States denied certiorari in Munro v. University of Southern California, a closely watched ERISA case in the Ninth Circuit. 

The Internal Revenue Service (IRS) issued Revenue Procedure 2018-52 on September 28, 2018, which updates the Employee Plans Compliance Resolution System (EPCRS). Revenue Procedure 2018-52 significantly changes how Voluntary Correction Program (VCP) applications are filed with the IRS.

The U.S. Department of Labor (DOL) recently made available an information letter that confirms general preemption under the Employee Retirement Income Security Act of 1974, as amended (ERISA), of state civil laws that require employers to obtain written consent before withholding amounts from employees’ wages for contribution to a benefit plan subject to ERISA. 

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.

As the end of the calendar year approaches, sponsors of tax-qualified retirement plans need to consider whether their plan documents require updates to meet legal compliance deadlines. Below is a list summarizing the important legal changes that may impact tax-qualified defined contribution (DC) and defined benefit (DB) retirement plans.

Year-end plan amendment reviews are an important part of satisfying ERISA’s fiduciary standards and maintaining tax-qualified status. The fundamental purpose is to determine whether the plan document requires modification to align with administrative practice and the law. Failing to follow the plan document can prove costly.

For most plan sponsors, October 15 is the extended deadline for filing the Form 5500 with the U.S. Department of Labor (DOL). As the deadline approaches, plan sponsors often spend considerable time working with the auditor to obtain the final audit report.

The Internal Revenue Service issued an update to its correction program for qualified retirement plans which, while limited, takes the step of taking the program into the digital age. The IRS maintains the Employee Plans Compliance Resolution System which permits a plan sponsor to correct plan failures while retaining the plan’s tax-qualified status.