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week ending May 8th, 2020
The Coronavirus Aid, Relief and Economic Security (CARES) Act, enacted on March 27, provides for special distribution options and rollover rules for retirement plans and individual retirement accounts (IRAs) and expands permissible loans from certain retirement plans. The legislation also allows retirement plan and IRA participants to waive required minimum distributions (RMDs). The Department of Labor (DOL) has also relaxed certain deadlines because of the COVID-19 pandemic. PLANSPONSOR has received questions from readers indicating that clarification was needed for certain provisions of the CARES Act. The IRS recently published a Q&A offering some clarification. In addition, PLANSPONSOR is pleased to announce a new weekly series, COVID-19 Compliance Corner, in which a prominent Employee Retirement Income Security Act (ERISA) attorney will explain legislative provisions and agency guidance. Look for that starting Monday. Meanwhile, we hope you find this edition of PLANSPONSOR Weekend helpful.
Editor's Choice
Compliance
DOL Provides Relief for Certain Retirement Plan Requirements
Relief is provided for verification requirements for loans and distributions and timing for forwarding contributions and loan repayments, among other things.
Compliance
Electronic Letter Ruling Requests Permitted by IRS
Instituted in response to the coronavirus pandemic, the dual paper and electronic filing policy will remain in effect until the revenue procedure is modified or superseded.
Compliance
Regulators Extend Time Frames for Special and COBRA Health Plan Enrollment
Extended time limits disregard the period from March 1 until 60 days after the announced end of the national emergency or such other date announced by the agencies in a future notice.
Compliance
PBGC Extends Certain Premium Payment and Filing Deadlines
The action is in response to an IRS extension of some retirement plans’ Form 5500 filing deadlines.
Compliance
DB Plan Relief Included in the CARES Act
The bill provides a delay for minimum annual required contributions and relief for plans that may have benefit restrictions triggered due to a drop in funding levels.
Popular Reads
Administration
Consider Who Is Paying When Benchmarking Retirement Plan Fees
There is less risk when a plan sponsor pays retirement plan fees, but that doesn’t necessarily mean the benchmarking should be different than if participants pay.
Compliance
Social Security Announces COLA for 2021
In addition, the maximum amount of earnings subject to Social Security tax—used to determine the taxable wage base for permitted disparity in DC plan contributions—will increase.
Compliance
Lessons From a Rare ERISA Excessive Fee Suit Dismissal
The complexity of retirement plan lawsuits often makes district court judges reluctant to approve early dismissal motions plaintiffs, but Salesforce has succeeded in defeating a complaint alleging it committed various fiduciary breaches.
Rules/Regs
Sponsors Can Hack-Proof Their Plan
Organizations should have some defensive elements in place.
Administration
Repositioning Financial Wellness and Retirement Benefits for 2021
Plan sponsors can take steps now to make sure their plans are ready to meet fiduciary obligations and participants’ needs in the new year.
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