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By Heather Mehta on April 23, 2019 at 9:40 AM

Pencil draws a straight line on paper and pencil eraser removing the lineThe Internal Revenue Service has updated the Employee Plans Compliance Resolution System (EPCRS) to allow for the self-correction of more failures. EPCRS is a program that allows plan sponsors to correct errors involving qualified plans (such as 401(k) plans, profit sharing plans, defined benefit pension plans, etc.) and certain other types of plans that, if left uncorrected, could jeopardize the tax-favored status of the plan. Revenue Procedure 2019-19 expands the self-correction program to include correction of certain loan failures and more corrections via retroactive amendment.

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By Kara Krawzik on April 10, 2019 at 11:20 AM

The word "penalty" spelled out with wooden blocksRecently, the IRS has been issuing 226J letters for the 2016 tax year. IRS Letter 226J is the penalty letter sent to employers who did not comply with the employer mandate under the Patient Protection and Affordable Care Act (ACA) in their offers of health coverage to employees. Frequently these penalties can be in the hundreds of thousands to millions of dollars. However, with the advice of counsel, you may be able to reduce, if not eliminate, the penalties, and changes can be made to avoid penalties in future years. It is important to note that while the individual mandate has been eliminated effective Jan. 1, 2019, by the current administration, the employer mandate still applies.

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By Jeffrey Herman on April 2, 2019 at 2:20 PM

Group of figures surrounded by a stethoscopeThe battle over health benefits rages on. In the latest salvo, a group of states scored a major court victory against the Trump administration’s new “Association Health Plan” Final Rule, which was finalized in 2018. While this decision will have major ramifications, it is important to remember that association health plans may still be established under old rules that existed long before the final rule.

The case is styled New York v. United States Dep’t of Labor, No. CV 18-1747 (JDB), 2019 WL 1410370 (D.D.C. Mar. 28, 2019).

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By Douglas Neville on March 26, 2019 at 1:20 PM

Words "Go Paperless" written on a key on a computer keyboardIn October 2018, the IRS updated the Employee Compliance Plans Resolution System (EPCRS) by issuing Rev. Proc. 2018-52. EPCRS is a program that allows plan sponsors to correct errors involving qualified plans (such as 401(k) plans, profit sharing plans, defined benefit pension plans, etc.) and certain other types of plans that, if left uncorrected, could jeopardize the tax-favored status of the plan. Among other changes to EPCRS, Rev. Proc. 2018-52 provides that, beginning Jan. 1, 2019, Voluntary Correction Program (VCP) submissions may be made electronically via www.pay.gov. Beginning April 1, 2019, the electronic filing requirement becomes mandatory.

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By Jeffrey Herman on January 30, 2019 at 1:40 PM

Image showing a wave of money with dollar bills and coinsConstruction companies with union employees often must make contributions to a defined benefit pension plan sponsored by the union. These plans are called “multiemployer” pension plans.

As a general rule, multiemployer plans are not well-funded. In 2015, for example, a federal study showed that 98.3 percent of multiemployer plans were underfunded. Collectively, that underfunding surpassed $560 billion. And nearly 40 percent of multiemployer plans are in the construction industry.

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By Heather Mehta on August 2, 2018 at 11:50 AM

Businessperson holding a white piece of paper that says "Lessons Learned."In April 2018, New York University was the first university to take to trial a case claiming it violated its ERISA fiduciary duties. And on July 31, 2018, it became the first university to win. Sacerdote v. New York Univ., No. 16-CV-6284 (KBF), 2018 WL 3629598 (S.D.N.Y. July 31, 2018).

More than a dozen lawsuits have been filed against prestigious colleges and universities claiming that they violated the Employee Retirement Income Security Act of 1974 (ERISA) in the operation of their Code Section 403(b) plans. Within the last year, University of Pennsylvania and Northwestern each won dismissal of their cases, and the University of Chicago settled its claims for $6.5 million. But NYU’s victory was the first to come after a trial, and the court’s finding of facts and conclusions of law provide lessons for ERISA fiduciaries — and not just those embroiled in their own fee cases.

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By Heather Mehta on July 26, 2018 at 2:50 PM

"Denied" spelled out with wooden blocksOn the same day the Ninth Circuit denied arbitration in Munro v. University of Southern California, a district also denied a motion to compel arbitration of a former employee’s ERISA breach of fiduciary duty and prohibited transaction claims in Brown v. Wilmington Trust, N.A., No. 3:17-cv-250 (S.D. OH July 24, 2018).

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By Heather Mehta on July 25, 2018 at 9:40 AM

Blank arbitration agreement with a red pen on topThe U.S. Court of Appeals for the Ninth Circuit affirmed a district court’s opinion that the University of Southern California could not compel arbitration of ERISA claims brought by its employees despite the fact that the parties entered into a broad arbitration agreement. Munro v. University of Southern California, No. 17-55550 (July 24, 2018). The reason? The agreement did not extend to claims brought on behalf of the employees’ retirement plan.

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By Daniel Schwartz on July 10, 2018 at 11:42 AM

"Pensions" written on a file tabAs discussed below, even though a church plan was operated in accordance with ERISA and the plan sponsor may have thought it was required to do so, as long as no 410(d) election was made, it is “no harm, no foul” for the plan’s status as a church plan.

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By Jeffrey Herman on July 9, 2018 at 9:45 AM

Businesspeople assembling papers to show a colorful umbrellaI previously examined the proposed rule by the U.S. Department of Labor (DOL) to expand so-called Association Health Plans, or AHPs, under the Employee Retirement Income Security Act of 1974 (ERISA). In a nutshell, the proposed rule was designed to make it easier for employers to form a group in order to provide health benefits to their employees through an AHP. These new AHPs would have more freedom to restrict benefits in order to provide more affordable coverage.

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