On February 23, 2017, the Internal Revenue Service issued a “Memorandum for Employee Plans (EP) Examinations Employees,” outlining Substantiation Guidelines for safe harbor hardship distributions from 401(k) plans (“Memorandum”). The purpose of the Memorandum is to provide IRS field examiners with guidance when examining 401(k) plans, for compliance with the 401(k) hardship regulations. The IRS
Understanding Employee Benefits and key developments in the employee benefits field and items of interest to our clients. MORE
401(k) plans
DOL Gives Retirement Plan Sponsors of Participant Directed Retirement Plans Additional Time to Provide Employee Fee Disclosures
By Jeffrey Cairns on
U.S. Department of Labor (DOL) regulations require 401(k) plan fiduciaries to provide plan participants with a detailed disclosure statement about the plan’s designated investment alternatives, prior to initial enrollment and at least annually thereafter. The DOL’s Employee Benefits Security Administration (EBSA) has interpreted the “annual disclosure requirement” to mean that any subsequent disclosure had to…
Despite upholding a $13.4 million judgment against plan fiduciaries, the Eighth Circuit gives plan sponsors a lot to like in Tussey decision.
By Sam Butler on
On March 19, 2014, a three judge panel of the United States Court of Appeals for the Eighth Circuit issued its decision in Tussey v. ABB, Inc., No. 12-2056 (8th Cir. Mar. 19, 2014). The case came to the Eighth Circuit on an appeal of a decision by the United States District Court for…
IRS Issues Final Regulations on Permitted Mid-Year Reductions or Suspensions of Safe Harbor Contributions
By Jeffrey Cairns on
In Final Regulations issued under Internal Revenue Code Section 401(k) in 2004, the IRS outlined procedures for revoking a safe harbor matching contribution formula after the beginning of a safe harbor plan year. Under those Final Regulations a safe harbor matching formula can be suspended during a plan year if advance notice is given and…
Are your 401(k) participant plan loans in compliance with the tax and ERISA rules?
By Jeffrey Cairns on
According to the Tax Exempt and Government Entities Division of the Internal Revenue Service (IRS), one out of every four (25%) of 401(k) plans surveyed in a recent study had engaged in prohibited transactions as a result of non-compliant participant plan loans and/or real estate investments that were not valued properly. http://www.irs.gov/pub/irs-tege/epn_2012_1.pdf
The problems …
Deficit Reduction, Tax Expenditures and Retirement Plans
By Stinson LLP on
There has been a lot of talk in Washington about deficit reduction, tax expenditures and tax reform. One of the largest identified tax expenditures is the exclusion for employer provided retirement plans, both defined contribution and defined benefit. I was at a seminar recently where the reported number for 2011 was $112 billion for fiscal…