Legislative & Regulatory Updates

IRS: Forfeitures can fund QNECs and QMACs

On January 18, 2017, the Internal Revenue Service ("IRS") issued proposed regulations that amend the definitions of qualified matching contributions ("QMACs") and qualified nonelective contributions ("QNECs") so that they can be funded with plan forfeitures.

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Proposed New Funding Mortality Rates

On December 28, 2016, the IRS issued proposed regulations with new required mortality rates for defined benefit pension plans for funding purposes, effective starting in 2018. The proposed regulations don't address the mortality required for minimum lump sum calculations, but it is expected that the IRS will propose a unisex version of the new rates that will be effective in 2018 as well.

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What's New in Claims Procedures for Disability Benefits

The Department of Labor issued a final rule on December 16, 2016 that amends the claims procedure regulation for disability benefits claims. The aim of the new rule is to give disability benefit claimants the same level of procedural protections that group health benefit claimants have after the enactment of the Affordable Care Act.

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2016 Required Amendments List is a List of One

On December 13, 2016, the Internal Revenue Service ("IRS") issued the 2016 list of required amendments. This list is the first of the promised annual required amendment lists ("RA List") pursuant to Revenue Procedure 2016-37, which ended the cyclical determination letter program for individually designed plans.

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Temporary Halt to Overtime Rule Regulations

On November 22, 2016, a federal judge issued a preliminary injunction that temporarily blocks the new overtime regulations on a national basis that were scheduled to take effect on December 1, 2016.

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Good News! – But Stay the Course – IRS Notice 2016-70 Provides Reporting Extension Under Codes 6055 of the Internal Revenue Code

The Department of Treasury and IRS have extended, by 30 days, the due date to furnish the 2016 Form 1095-B and the 2016 Form 1095-C, to March 2, 2017.

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Patient-Centered Outcomes Research Institute (PCORI) Fees Update

The IRS has published the new fee that will be applicable for policy years and plan years that end on or after October 1, 2016 and before October 1, 2017. That new fee, which is assessed and calculated using the average number of lives (includes spouses and dependents) covered under the policy, is $2.26 per covered life.

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Reminder to Pay Transitional Reinsurance Program Fees

If you paid the 2015 Transitional Reinsurance Fee of $44 per member (applies to both employee and covered dependents) in installments, the 2nd installment of $11 per member is due November 15, 2016.

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Hurricane Matthew Victims Get a Helping Hand from the IRS

The Internal Revenue Service (IRS) announced on October 21, 2016 that participants in 401(k) plans, 403(b) tax-sheltered annuities and 457(b) deferred compensation plans may be able to use newly announced streamlined rules to alleviate the financial hardships caused by Hurricane Matthew with loans and hardship distributions.

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Correction Program No Longer A Puzzle in Pieces for Retirement Plan Sponsors

The new procedure for the Employee Plans Compliance Resolution System (EPCRS) will make it easier and clearer for retirement plan sponsors to correct plan failures so that the plans can continue on a tax-favored basis.  Parts of EPCRS had been in three separate revenue procedures, and the new Determination Letter program had confused other portions of EPCRS.  Now, there is more clarity, and it's in one place.

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PBGC Issues Final Regulations on Section 4010 Filings for Unfunded Plans

The PBGC has issued an updated set of rules regarding ERISA 4010 reporting.

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