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FLASHPOINT: DOL NEW PROPOSED ESG REGULATIONS (AND OTHER UPDATES)

By: Alison J. Cohen, Esq., APR Without question, we heard from Third Party Administrators (TPAs), Certified Public Accountants (CPAs), and Institutional Pension Workers, that this year was one of the most challenging October 15th deadlines. The fallout from the 2020 census hokey-pokey, and ongoing personnel shortage with Plan Sponsors, added massive challenges to an already […]

FLASHPOINT: FORM 5500 CLARIFICATION … BETTER LATE THAN NEVER

Form 5500 Clarification … Better Late than Never One of the highly useful provisions from the Setting Every Community Up for Retirement Enhancement Act of 2019 (“SECURE Act”) is the ability to adopt a new plan after the end of the plan year, as late as the filing deadline for the employer’s tax return.  This […]

FLASHPOINT: THE NEWEST EPCRS: ALL GOOD NEWS (EXCEPT WHEN IT’S NOT)

The IRS issued the long-awaited update of its Employee Plans Compliance Resolution System (EPCRS) on Thursday, July 15, 2021.  Revenue Procedure 2021-30 (“Rev. Proc. 2021-30”), which supersedes the previous EPCRS procedure, Rev. Proc. 2019-19: maintains the now familiar structure of the IRS’s correction procedures; lengthens the time for self-correcting significant operational failures and document failures; […]

FLASHPOINT: Department of Labor Issues Cybersecurity Guidance (Not to say we told you so, but…..)

By: Alison J. Cohen, Esq., APR Back in 2019, FBLC published our first Solution regarding the rising threat of identity theft.  As we kept hearing of events happening to our clients, and seeing more lawsuits hitting the news, we published a second Solution in late 2020, regarding the dangers of lax cybersecurity procedures.  Earlier this […]

FLASHPOINT: NEW SECURE SAFE HARBOR 401(K) PLAN RULES: YOU CAN DO THE SAFE HARBOR NONELECTIVE HOKEY POKEY!

In brand new Notice 2020-86, issued on December 9, 2020, the IRS provides some additional guidance on the post-SECURE safe harbor 401(k) plan rules.  One of the items addressed in the Notice demonstrates the IRS’s holiday season generosity!  As this can help employers for the 2020 plan year end, we thought it was important to […]

FLASHPOINT: DEJA-VU! DIDN’T WE JUST FINISH RESTATEMENTS?

The attached article was written by Alison Cohen for the ASPPA Plan Consultant Magazine, and discusses 8 practical solutions to the challenges that service providers will face over the next two years as they restate their clients’ defined contribution plans. Whether you are a TPA or a plan sponsor, reviewing these ideas can help you […]

FLASHPOINT: THE THREE-MONTH RULE AND RETROACTIVE SAFE HARBOR ELECTIONS: YOU NEED TO ADOPT THE PLAN BY OCTOBER 1!

By S. Derrin Watson Perhaps we should have expected it.  It would have been nice if the IRS had provided guidance on the topic. But shoulda, woulda, coulda doesn’t matter.  Here we are, at the end of September, deluged with questions about the implications of the SECURE Act change that permits retroactive amendments to institute […]

FLASHPOINT: ALL THE GUIDANCE THAT’S FIT TO PRINT: GIFTS FROM THE DOL AND IRS (GEE, WE DIDN’T GET THEM ANYTHING!)

In the last few weeks, the U.S. Department of Labor (“DOL”) and Internal Revenue Service (“IRS”) have published a number of key items of guidance.  Ranging from Pooled Plan Provider (“PPP”) registrations and lifetime income illustrations to rollover rules for qualified plan loan offsets, the materials are vast and welcome by many in this industry. […]

FERENCZY FLASHPOINT: USER FEES GOING UP AND CARES UPDATE

Updated User Fees for IRS Filings The IRS just issued the user fees for 2021 in Announcement 2020-14.  Unlike in 2018, when the IRS increased user fees overnight with no advance notice (yes, we hold a grudge), the IRS is letting us know several months in advance so that we can take some preemptive action […]

FLASHPOINT: SEP, MEP, OR PEP IDENTIFYING THE KEY DIFFERENCES IN RETIREMENT PLANS

The attached white paper by Alison Cohen and Ilene Ferenczy was commissioned by Transamerica Retirement Solutions, LLC to help explain the differences between single-employer, multiple-employer, and pooled-employer plans, as well as other group programs for offering retirement benefits. Please feel free to download the paper and share it with your friends, colleagues, and clients. If […]

FLASHPOINT: IRS STILL CARES SUSPENSION OR REDUCTION OF SAFE HARBOR CONTRIBUTIONS FOR 2020

In Notice 2020-52 (the “Notice”), issued on June 29, 2020, the IRS continues providing relief for employers during the COVID pandemic.  In particular, the Notice permits employers to suspend or reduce safe harbor contributions in 401(k) and 403(b) plans after March 13, 2020, for the balance of the year, regardless of whether the employer is […]

FLASHPOINT: WAIT! THERE’S MORE! IRS ISSUES CARES RMD GUIDANCE

Under the heading of “No Good Deed Goes Unpunished,” we were just patting ourselves on the back for getting out the Notice 2020-50 FlashPoint so quickly when the IRS laughed in our face.  A mere two working days later, on June 23, 2020, the IRS issued Notice 2020-51 (the “Notice”), providing guidance in relation to […]

FlashPoint: The IRS CARES! (Who’d Have Thunk?) Expanded List of Qualified Individuals and More Info!

On Friday, June 19, 2020, the IRS issued Notice 2020-50 (the “Notice”), which provides expanded guidance on Coronavirus-Related Distributions (“CRDs”) and the CARES participant loan rules. Expansion of Definition of Qualified Individual You may recall from the prior Flash, “Coronavirus Relief from Congress – The CARES Act,” that the following individuals were considered to be […]

FLASHPOINT: RIDERS, FEET ON THE PEDALS! DC TRICYCLE RESTATEMENTS ARE ABOUT TO BEGIN!

The IRS has just announced (Announcement 2020-07) the key details for the third cycle (“Tricycle”) of restatements for preapproved defined contribution plans. Document providers submitted their draft documents in 2018, and the IRS anticipates completing its review and issuing opinion letters for these preapproved plans on June 30, 2020. This will begin the formal restatement […]

FLASHPOINT: THE DOL EDISCLOSURE REGULATIONS: REDUCTION IN PAPER AND MAILING COSTS (BUT NO GUARANTEE THAT THE DOCUMENTS HAVE BEEN READ UNDER INTEL)

On May 21, 2020, the U.S. Department of Labor (“DOL”) published the final rule on Electronic Disclosure Safe Harbor options for retirement plans (“eDisclosure Regs”).  It is important to note that these new eDisclosure Regs don’t replace the original eDisclosure Regulations issued on April 9, 2002 (“2002 Regs”), but rather prove additional options for plan […]

FLASHPOINT: DEALING WITH THE PANDEMIC: IRS AND DOL AUTHORIZED DELAYS

Both the Internal Revenue Service (IRS) and the Employee Benefits Security Administration (EBSA) (the section of the U.S. Department of Labor (DOL) with jurisdiction over employee benefit plans) recently issued guidance delaying certain plan-related deadlines while the COVID pandemic is ongoing.  Some of these delays apply to the participants, generally giving them more time to […]

FLASHPOINT: WHAT PLAN SPONSORS SHOULD KNOW ABOUT CARES

The attached white paper by Ilene Ferenczy was commissioned by CUNA Mutual Group to help explain the advantages to both companies and their employees of the retirement plan provisions in CARES.  The article also discusses some of the ways in which sponsors can reduce or eliminate 2020 contribution obligations during this time of economic uncertainty. […]

FLASHPOINT: THE CARES ACT: DO WE HAVE TO?

Much of the confusion around the CARES Act (“CARES” or the “Act”) centers on what is mandatory and what is voluntary.  This has produced a lot of controversy, mostly because CARES is not written in a manner that directly addresses that key question. For those of you who are in the retirement plan business, the […]

FLASHPOINT: CORONAVIRUS RELIEF FROM CONGRESS – THE CARES ACT

On Friday, March 27, 2020, the House passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), a massive relief bill for those suffering as a result of the Coronavirus pandemic, which was passed earlier in the week by the Senate.  As the bill is the result of significant negotiations between both parties and […]

FLASHPOINT: IRS REPRESENTATIVES SAY NO IMMINENT VCP CHANGES

IRS representatives attending the TE/GE Council meetings this week have confirmed that there is no significant action being taken by the IRS at this time to modify the Voluntary Correction Program (VCP) program. On February 25, 2020, the American Retirement Association (ARA) reported in its online newsletters that, according to an IRS whistleblower, the IRS […]

FLASHPOINT: NEW PENSION LEGISLATION PASSES! FEELING MORE SECURE?

Against what seemed to be all odds, Congress got together on December 19, 2019, to pass the Setting Each Community Up for Retirement Enhancement (SECURE) Act.  It was signed into law by the President on Friday, December 20. The most extensive retirement plan legislation since the Pension Protection Act of 2006, SECURE contains several of […]

FLASHPOINT: IRS ANNOUNCES 2020 COST OF LIVING ADJUSTMENTS TO VARIOUS RETIREMENT PLAN LIMITS (AND SOME COMMENTS ON THE HARDSHIP REGULATIONS)

The IRS just released the cost of living adjustments for various retirement plan limitations that will take effect on January 1, 2020. Many of the limits will be increasing for 2020. The key limits that increased (shown below in bold italics) include the compensation that is taken into account for plan purposes, the salary deferral […]

FLASHPOINT: THE DOL FINALIZES MEP REGULATIONS

As discussed in our FlashPoint dated October 25, 2018, available here: https://ferenczylaw.com/flashpoint-the-new-mep-meh-proposed-regulations/, the U.S. Department of Labor (“DOL”) previously introduced proposed regulations relating to certain defined contribution multiple employer plans (“MEPs”). These regulations were issued in final form on July 29, 2019 (the “Regulation”), and offer the ability of “bona fide” organizations, associations, and professional […]

FLASHPOINT: IF YOU SPONSOR A MEP: YOU MAY NEED TO ACT BEFORE OCTOBER 15!

The Department of Labor (DOL) issued a Field Assistance Bulletin (FAB 2019-01) on July 24, 2019, relating to Form 5500 filings for Multiple Employer Plans (MEPs). If you sponsor or administer MEPs, it is likely that this FAB applies to you. As it warns of possible compliance issues and grants transitional relief, you need to […]

FLASHPOINT: MID-SUMMER UPDATE: MORE ABOUT REG BI AND PREVENTING MEP SPOILAGE FROM THE ONE BAD APPLE

By S. Derrin Watson, Of Counsel More About Reg BI: Identifying, Disclosing, Mitigating, and Eliminating Conflicts of Interest In our earlier Flash, “Regulation Best Interest and More,” we provided an overview of the Securities and Exchange Commission’s (“SEC”) recently finalized Regulation Best Interest (“Reg BI”), which impacts transactions between broker-dealers and retail customers, including retirement […]

FLASHPOINT: REGULATION BEST INTEREST AND MORE … A PRESENT TO INVESTORS FROM THE SEC

By S. Derrin Watson, Of Counsel The Securities and Exchange Commission (SEC) has published a package of rules and interpretations (“SEC Rule”) dealing with the duties broker-dealers and investment advisors owe to their customers, including individual plan participants. The SEC originally proposed the package in April 2018, weeks after the 5th Circuit Court of Appeals […]

FLASHPOINT: IRS DETERMINATION LETTER PROGRAM EXPANDED … TO A LIMITED EXTENT

The IRS has expanded the availability of determination letters on individually designed plans in two circumstances: temporarily for “statutory hybrid plans” and permanently for merged plans. The availability of IRS approval of plan documents should give sponsors in these situations an opportunity to be reassured that their plan documents are “up to snuff.” The Determination […]

FLASHPOINT: CORRECTIONS MADE EASIER: THE IRS EXPANDS THE SELF-CORRECTION PROGRAM

Last year, the IRS modified its correction programs for qualification failures (the “Employee Plans Compliance Resolution System” or “EPCRS”) to significantly increase the fees for taking part in the Voluntary Compliance Program (“VCP”). (See our previous FlashPoint on this subject.) Since that occurred, the retirement plan community has responded with demands that the IRS expand its […]

FLASHPOINT: THINGS ARE HAPPENING … FINALLY!

After a period of national quiet in relation to retirement plans, several things have occurred recently that are worth discussing. Sorry that this is a longer newsletter than we like, but we wanted to give you quick feedback on what’s finally going on. California’s State-Mandated Retirement Program Survives Preemption Challenge One of the interesting trends […]

FLASHPOINT: THE INS AND OUTS OF 403(B) DEFERRALS – THE IRS SOLVES THE PROBLEM

The IRS has provided important transition relief for many 403(b) plans struggling with an apparent change in IRS positions on a critical issue: how should 403(b) plans treat part-time employees who sometimes work more than 20 hours a week and sometimes work fewer? Recently issued Notice 2018-95 clarifies that what the IRS is calling “the […]

FLASHPOINT: THE NEW MEP (MEH!) PROPOSED REGULATIONS

The Department of Labor (“DOL”) issued proposed regulations (the “Proposal”) on October 22, 2018, that represent the first major step in changing its restrictions on multiple employer plans (“MEPs”). However, it is just the first step, and does not change the landscape for Open MEPs. The Proposal was issued in response to the President’s August […]

FlashPoint: New EPCRS Procedure: Electronic Submission of VCP and Not A Whole Lot More

On September 28, 2018, the IRS issued Revenue Procedure 2018-52, the latest version of the Employee Plans Compliance Resolution System (“EPCRS”), the IRS’s comprehensive procedures for correcting retirement plan errors. Using this procedure, retirement plan sponsors may fix mistakes in their qualified plans, 403(b) plans, 403(a) retirement annuities, SEPs, and SIMPLEs. Although they are not […]

FLASHPOINT: DOL FIDUCIARY RULES: WHERE THE HECK ARE WE NOW?

  As we discussed in our FlashPoint entitled, “Did the 5th Circuit Kill the Fiduciary Rule?” on March 15, 2018, the 5th Circuit Court of Appeals vacated the Department of Labor’s (DOL) fiduciary regulations and the related prohibited transactions in relation to investment advice.  (For purposes of this FlashPoint, we will call these the “New […]

FLASHPOINT: DID THE 5TH CIRCUIT KILL THE DOL FIDUCIARY RULES?

This update is published by Ferenczy Benefits Law Center to provide information about recent developments to our clients and friends. It is intended to be informational and does not constitute legal advice for any particular situation. It also may be considered to be “attorney advertising” under the rules of certain states.   Ferenczy FlashPoint:  Did […]

SOLUTIONS IN A FLASH: BUDGET ACT CONTAINS RETIREMENT PLAN CHANGES

Note to self: do not turn the light out for the night if Congress just passed a budget act and you haven’t gone looking for benefits provisions. Yes, the new Bipartisan Budget Act of 2018 (the “Budget Act”), passed by Congress on Thursday, February 8, and signed on the morning of February 9 by President […]

FLASHPOINT: STICKING IT TO THE LITTLE MAN: WHY THE NEW IRS VCP FEES ARE BAD FOR SMALL BUSINESS, TPAS, AND RETIREMENT PLANS

  Forgive us if we don’t sing the praises of the Internal Revenue Service (“IRS”) for the most recent update to the Voluntary Correction Program (“VCP”) fee schedule.  A number of articles have been published since the release of Revenue Procedure (“Rev. Proc.”) 2018-4, expressing enthusiasm about the reduction of the fees for mega-corporations that […]

FLASHPOINT – IRS ANNOUNCES 2018 COST OF LIVING ADJUSTMENTS

The IRS just released the cost of living adjustments for various retirement plan limitations that will take effect on January 1, 2018.  Many of the limits will be increasing for 2018. The Consumer Price Index, on which these limits are based, went up 2.2% during the prior twelve months.  The key limits that increased (shown […]

FlashPoint – Sign Up for DC-1 Prep Class

Studying For ASPPA’s DC-1 Exam? Want To Kick Off Your Studies for DC-1? Need A Good Survey Course About DC Plans? Need A Good Refresher On DC Plans? NEED CEs?   IT DOESN’T GET ANY BETTER THAN THIS!!! Attend in Person in Atlanta OR Live Stream (Not just a webcast, but a broadcast of speakers […]

FLASHPOINT – WHAT’S GOING ON IN THE WORLD OF RETIREMENT PLANS?

We realize that we have been off the grid somewhat for the past few months, but are glad to be back in publication and here to catch you up on the happenings in the benefits world. Hurricane Relief Attached here is a chart outlining the various relief measures taken by the government for victims of […]

FlashPoint – Surprise! You Are (or Are Not) a Professional (and You Are (or Are Not) Covered by the PBGC!

We worked recently on an interesting matter that has rather far-reaching consequences for some sponsors of defined benefit and cash balance (collectively, DB) plans. Our client, a financial advisor to some retirement plans and mostly individuals, and a sponsor of a DB plan for employees at his firm, was recently audited by the IRS.  During […]

FlashPoint – DOL Delays Fiduciary Rule Changes

As expected, the Department of Labor (DOL) has extended the applicability date of the new fiduciary/conflict of interest regulation from April 10 to June 9.  The new rule also extends the applicability of the Best Interest Contract Exemption (BICE) interim applicability. What does this mean?  First of all, for those of you who were struggling […]

FlashPoint – What’s Been Happening?  

We hope everyone is enjoying their new year, and that there is relatively mild weather where you live.  We had our annual snowstorm scare here in Atlanta two weeks ago, with warnings from the press about everything from getting off the roads early to making sure you have baby food in your cabinets.  It snowed […]

FlashPoint – The New Fiduciary Regs: A Practical Review – Part III

This is the third and final part to our “Practical Review” of the new fiduciary rules issued by the Department of Labor (D OL). This installment will look at how the rules have been accepted by the benefits com m unity and what we hear or think practitioners are doing to prepare for compliance. (Of […]

FlashPoint – New IRS Procedure for Plan Documents

The IRS issued Revenue Procedure 2016-37 (the “Procedure”) at the end of June, which significantly affects individually designed plans (“IDPs”) and has some ramifications for pre approved documents, such as prototypes and volume submitter documents.

FlashPoint – The New Fiduciary Regs: A Practical Review – Part II

Thank you for your patience in awaiting this second part to our review of the new Fiduciary rules issued by the Department of Labor. This installment will look at the potential for self-dealing if you are an advice fiduciary, and how the Best Interest Contract Exemption (BICE) can help. As with Part I, our goal […]

FlashPoint – Grabbing Victory Out of the Jaws of Defeat Late Plan Restatements

Understanding that there may be some situations in which the looming April 30 restatement deadline cannot be met by some adopters of defined contribution pre-approved plan documents, the IRS got the jump on providing practitioners with assistance for resolving these nonamender problems. Nonamenders: Big Trouble! A failure to restate the plan on a timely basis […]

FlashPoint – The New Fiduciary Regs: A Practical Review – Part I

Okay, here is the FBLC take on the new DOL fiduciary regulations. As in the past with prior proposals, we have broken our response into different parts. Today’s information will look to give just some broad rules and structure of the Regulation, itself, which defines what makes someone an advice fiduciary and what that means. […]