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Pension Protection Act Blog

The Pension Protection Act made the most sweeping changes in thirty years to ERISA and employee benefits law. This blog examines how PPA impacts every aspect of employee benefits and focuses on qualified plans - both defined contribution and defined benefit.

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Last Entry: May 15, 2009 at 00:43:09

Annual Limitation on Deductions for Health Savings Accounts for 2010

Posted on May 15, 2009
Today, the IRS released Revenue Procedure 2009-29 containing the inflation adjusted amounts for Heath Savings Accounts (HSAs) as determined under Code section 223 for 2010. For calendar year 2010, the annual limitation on deductions under Code section 223(b)(2)(A) is $3,050 for an individual with self-only coverage under a high deductible health plan...

DOL and SEC Schedule Joint Hearing on Target Date Funds

Posted on May 14, 2009
The Dept. of Labor and the Securities and Exchange Commission have announced a joint one-day hearing on target date or lifecycle funds and other investment options. The hearing is scheduled for June 18, 2009. It will be held at the Dept. of Labor, 200 Constitution Ave NW, Washington, D...

Disabled by AIDS in 1994 Does Not Mean Still Disabled in 2006 According to 7th Circuit

Posted on May 07, 2009
If a condition is grave enough to warrant disability in 1994, why isn’t it sufficient to warrant disability in 2006? The 7th Circuit Court of Appeals addressed this question in Jenkins v. Price Waterhouse Long Term Disability Plan, No. 06 C 603 (May 4, 2009)...

IRS Extends Deadline to June 30th for Multiemployer Plans

Posted on April 30, 2009
Today (April 30th) was the deadline for multiemployer plans to make certain elections described in sections 204 and 205 of the Worker, Retiree, and Employer Recovery Act of 2008 (WRERA). Recognizing that some multiemployer plans need additional time, the IRS issued Notice 2009-42 today, which extends the deadline from April 30, 2009 to June [...

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8th Circuit Decides Signed Letter to Participants Plus SPD Equals Amendment

Posted on April 22, 2009
In Halbach v. Great-West Life & Annuity, No. 07-3865/07-3867 (CA8 April 13, 2009), the 8th Circuit Court of Appeals recently addressed what constitutes a valid amendment to an employee welfare benefit plan. In 2004, Great-West provided a package of medical coverage to both active employees and former employees who were also receiving long-term disability [...

60 Minutes Looks at 401(k) Fees

Posted on April 20, 2009
If you missed 60 Minutes last night, you missed Steve Kroft taking a look at 401(k) fees. Last night’s episode is available online here. The segment included a short interview with Rep. George Miller. The interview mentions the 401(k) fee disclosure legislation which Rep...

403(b) Prototype Program Excludes Plans with Vesting Schedules

Posted on April 17, 2009
Yesterday, I attended the IRS’ 403(b) Phone Forum featuring IRS Senior Tax Law Specialist Robert Architect. One of the topics briefly discussed by Mr. Architect was the new prototype program for 403(b) plans, as stated in Announcement 2009-34. One of the surprising parts of Announcement 2009-34 is that 403(b) prototypes approved by the [...

IRS Issues 403(b) LRMS and Details of Pre-Approved 403(b) Prototype Plans

Posted on April 14, 2009
Today, the IRS took two major steps forward toward pre-approving 403(b) plan documents when it issued the Listing of Required Modifications (LRM) for 403(b) plans and also issued Announcement 2009-34 which requests comments on the draft Revenue Procedure for 403(b) Prototype Plans...

Termination Premiums are not Pre-Petition Claims Dischargeable in Bankruptcy

Posted on April 09, 2009
In PBGC v. Oneida, No. 08-2964-bk (CA 2nd, April 8, 2009), the Court of Appeals for the 2nd Circuit reversed the decision of the U.S. Bankruptcy Court for the Southern District of New York. The 2nd Circuit found that payments due to the PBGC as a result of an employer’s termination of a pension [...

Some Enrolled Retirement Plan Agent Statistics

Posted on March 25, 2009
When the IRS first began discussing whether another category of individuals permitted to practice before the IRS was needed in the qualifed pension and retirement plan arena, the big question was how many individuals would be interested in applying for the new category if it was created...

Dept. of Labor Issues Model COBRA Notices

Posted on March 19, 2009
Today, the Dept. of Labor issued 4 Model Notices which can be used to comply with the notification requirements contained in the American Recovery and Reinvestment Act of 2009 (ARRA) relating to COBRA provisions. The Model Notices are: The full version General Notice which must be sent to all qualified beneficiaries, not just covered employees, [...

List of Expiring Tax Code Provisions

Posted on March 11, 2009
The Joint Committee on Taxation has released a list of tax code provisions which expire between 2008 and 2020. This list contains a number of items which relate to qualified plans and IRAs. Specifically, as stated on the list: Provisions Expiring in 2009: 47...

410(b) Testing and Employees Terminated With More than 500 Hours

Posted on March 04, 2009

Opinions Wanted About EPCRS Self-Correction Program

Posted on March 04, 2009

And The Lilly Ledbetter Litigation Begins

Posted on February 11, 2009
It took just 8 days for the ERISA-related litigation over the Lilly Ledbetter Fair Pay Act of 2009 to begin. When President Obama signed the Lilly Ledbetter Act into law on January 29, 2009, it was heralded among the non-ERISA community as creating a new world of equal pay for equal work...

Madoff Victims Include Small Pension Plans

Posted on February 06, 2009
Speculation over how many pension plans were defrauded of assets by Madoff came to a close yesterday with the publication of the long list of victims which has been filed with the Bankruptcy court handling Madoff’s assets. (hat tip to the Wall Street Journal) One of the interesting points of the Madoff story [...

It?s Official - DOL Applies Rahm Emanuel?s Memo to Investment Advice Regs

Posted on February 05, 2009
Today, the Dept. of Labor issued a Notice proposing a 60-day extension and a new comment period for the investment advice regulations which the DOL published in the Federal Register on January 21, 2009. Originally effective on March 23, 2009, the DOL has now opened the comment period on the extension until February 18, [...

Supreme Court to Divorced Participants - Check Beneficiary Designations if No Valid QDRO

Posted on January 27, 2009
“ERISA provides no exception to the plan administrator’s duty to act in accordance with plan documents.” - Headnote 2, Kennedy v. Plan Administrators for Dupont Savings. In the game of QDRO beneficiary tug-of-war between an ex-wife and daughter over a deceased participant’s account balance, the U...

Senate Passes Lilly Ledbetter Act Addressing Discriminatory Compensation

Posted on January 22, 2009
The Senate has approved S. 181, the Lilly Ledbetter Fair Pay Act of 2009, by a vote of 61-36. This bill has already passed the House and now heads to President Obama for his signature. This Act is interesting for retirement and pension plans because it addresses the U...

Rapid Fire Required Minimum Distribution Guidance for 2008 and 2009

Posted on January 12, 2009
Late in 2008, when the Worker, Retiree, and Employer Recovery Act of 2008 (WRERA) was signed into law, one of the provisions it contained was a waiver of Required Minimum Distributions (RMDs) for 2009 (not for 2008) for retirement plans which hold each participant’s benefits in an individual account, such as 401(k) plans, 403(b) plans, [...

Cash Balance Plan Basics Explained

Posted on January 05, 2009
The January 2009 edition of the Journal of Accountancy has a good general article on cash balance plans. Written by Raymond D. Berry of Grant Thorton LLP in Chicago, Plan Design in the Balance: Weighing the Pros and Cons of Cash Balance Plans provides a general explanation of what a cash balance plan [...

Required Minimum Distribution Relief for 2009 Clarified

Posted on December 22, 2008
The Dept. of Treasury has informed Congress that the IRS has determined that any further change to the required minimum distribution rules should not be undertaken. This surprising news was contained in a letter sent by the Assistant Secetary for Legislative Affairs Kevin Fromer to Congressman George Miller, Chairman of the Committee on Labor [...

IRS News You Can Use: A Slight Cycle C Extension and a New Address for Determ Letter Applications

Posted on December 18, 2008
In the Winter 2009 Edition of Employee Plan News, hot off the presses today, the IRS gives us a number of items to make note of: 1. There is a new address for Determination Letter Applications using Form 5307, 5300, 5310 and 5310-A. It is: Internal Revenue Service PO Box 12192 Covington, KY 41012-0192 It states that applications [...

Motorola Freezes Defined Benefit Plan and Ends 401(k) Match

Posted on December 17, 2008
In a sign of the times, Motorola announced that, effective March 1, 2009, it is freezing its defined benefit plan and, effective January 1, 2009, it will end matching contributions to its 401(k) plan. Motorola also announced that its co-CEOs will take a 25% decrease in base salary in 2009, and that one CEO [...

IRS Extends 403(b) Written Plan Requirement to December 31, 2009

Posted on December 11, 2008
Today, the IRS issued Notice 2009-3, which extends the written plan requirement for 403(b) plans for one year - to December 31, 2009. Specifically, Notice 2009-3 states that: “The Service will not treat a section 403(b) plan as failing to satisfy the requirements of section 403(b) and the final regulations during the 2009 calendar year, [...

Over Before It Began: Eliminating 2009 Safe Harbor Match After Notice is Distributed

Posted on December 09, 2008
So what happens if you (or your employer) distributed a safe harbor notice last October or November that stated there would be a safe harbor matching contribution in 2009, and now, with the worsening economy, the employer needs to rescind that promise of making a safe harbor matching contribution in 2009...

Still No News From IRS on Extension of 403(b) Written Plan Requirement

Posted on December 04, 2008
Today’s news is that there is no news on whether there will be an extension of time to comply with the Final 403(b) Regulations. The announcement made by IRS Senior Tax Law Specialist Bob Architect during the IRS’ webcast today was that the Service has received comments requesting an extension and that the IRS [...

IRS Releases Cumulative List for Cycle D Plans

Posted on December 02, 2008
The IRS has released Notice 2008-108, which contains the 2008 Cumulative List of Change in Plan Qualification Requirements, also known as the Cycle D Cumulative List. Cycle D plans are: (1) individually designed single employer qualified plans where the last digit of the plan sponsor’s EIN ends in 4 or 9; or (2) multiemployer [...

IRS Schedules Hearing on Proposed Regs on ESOPs

Posted on November 25, 2008
The IRS has scheduled a hearing on the Proposed Regulations affecting Employee Stock Purchase Plans Under Internal Revenue Code section 423 for Thursday, January 15, 2009, at 10am (also known as the Thursday before the Inauguration). Originally issued on July 29, 2008, and effective on January 1, 2010, these proposed regulations provide a “comprehensive set of [...

IRS Debunks Another 401(k) Urban Myth in New Guidance on Rollovers as Business Startups

Posted on November 12, 2008
ROBS, or Rollovers as Business Startups, have been bouncing around the employee plans arena for a couple of years. I first hear an IRS official mention ROBS during the 2006 Cincinnati Benefit Conference as part of the presentation on tax avoidance transactions...

IRS Goes YouTube with 403(b) Information

Posted on November 10, 2008
The IRS has posted a series of 10 videos on YouTube about the Final 403(b) Regulations. Featuring Tax Law Specialists Bob Architect, the IRS’ authority on 403(b) plans, the videos are short, informative and worth watching. Each video is about 10 minutes long, and paced so that you can watch them during a [...

IRS Updates Dollar Limitations for Qualified Transportation Fringe Benefits

Posted on October 19, 2008
In Revenue Procedure 2008-66, the IRS has updated the dollar limitations for parking, transit passes, and carpooling or vanpooling fringe benefits. Specifically, effective for taxable years beginning in 2009, Code section 132(f)(2)(A) is updated to provide that the fringe benefit exclusion amount for parking is increased to $230...

401(k) is Just a Number, not a Plan for Retirement

Posted on October 17, 2008
I’ve been blogging recently about defined benefit plans providing a more secure retirement than defined contribution plans, such as 401(k) plans. With Congress again discussing how to amend the tax code to provide a portable individual retirement plan for employees whose employer does not offer a plan, the relevant question is whether that plan [...

Massive Fines for Failure to Timely Amendment

Posted on October 10, 2008
VCP fine for not timely adopting a 401(a)(31)(B) amendment: $375 Audit CAP fine for not timely adopting a 401(a)(31)(B) amendment: $3,000 Audit fine for not timely adopting a 401(a)(31)(B) amendment: $45,000 Timely amending your plan: Priceless Recently, it seems that the IRS auditors have been running a governmet fundraiser by imposing inordinately large fines for [...

Senate Passes Bailout Bill Loaded with Tax Provisions Including Bicycle Commuting Reimbursement

Posted on October 02, 2008
Yesterday, the Senate passed their version of the Bailout Bill. One item contained in the bill which caught my eye was a change to Code section 132(f) which will cause an almost immediate revision to our Qualified Transportation plan. As a bicycle commuter for over 30 years, I appreciate this tax credit...

Wall Street Journal on What Happens to Your Retirement Benefits after Bankruptcy

Posted on September 23, 2008
Mike Spector wrote a short article in the Wall Street Journal today about What Happens to Your Benefits After Bankrupcy. The article discusses the general differences between 401(k), defined benefit and cafeteria plans when the plan sponsor files for bankruptcy, providing this example: “Here’s what to consider if your company is facing the possibility of [...

Some Tax Statistics and the $700 Billion Bailout Package

Posted on September 22, 2008
Over dinner on Saturday night, we started to wonder how much the bailout package meant for each person seated at the table. The Number = $5,227.12 Being tax geeks, we decided that $700 billion and dividing it by the population of the United States is not really a valid number because there are Americans who [...

9th Circuit Decides QJSA Tug of War in Favor of Spouse at Time of Retirement

Posted on September 18, 2008
“This case requires us to once again navigate the complex statutory scheme set out in the Employee Retirement Income Security Act of 1974….” - Judge Clifton, 9th Circuit Court of Appeals Yesterday, the 9th Circuit Court of Appeals decided whether or not a participant in a plan with a Qualified Joint and Survivor Annuity (QJSA) may change [...

Employees File Lawsuit Over Tribune ESOP

Posted on September 17, 2008
When the Tribune Company was purchased by Samuel Zell by utlizing an ESOP, one question was how long would it take before the litigation began. Today, that question was answered when a group of current and former employees filed suit in the U.S. District Court for the Central District of California...

2008-09 Priority Guidance List Has Arrived and It Contains 2 New Programs from the IRS

Posted on September 12, 2008
The IRS released the 2008-09 Priority Guidance List on September 10th. The Priority Guidance List is the annual list from the IRS which contains the list of projects and programs which the IRS intends to address during the during the 12-month period from July 1st each year through June 30th...

Maybe What We Need is a Deregulated Individual Defined Benefit Plan

Posted on September 08, 2008
A few years ago, there was a lot of buzz about Congress creating some type of defined contribution plan for employees whose employer did not sponsor a plan. The idea was that if the employer was not sponsoring a qualified plan, the employee could create their own plan and contribute to their retirement accounts [...

IRS Expands Transitional Relief for Defined Benefit Plans

Posted on September 04, 2008
One impact of Congress’ failure so far to pass any version of the Pension Protection Technical Corrections Act is that defined benefit plans have been forced to operate while awaiting guidance. Earlier this year, the IRS issued transitional relief in Notice 2008-21...

Final 403(b) Regulation Date Tricky for Church Plans

Posted on August 21, 2008
As the general deadline of January 1, 2009 creeps closer and closer for most 403(b) plans to comply with the Final 403(b) Regulations, the applicability dates in the Final 403(b) Regulations deserves a little scrutiny. For church 403(b) plans, the deadline for complying with the Final 403(b) Regulations depends on whether the authority to [...

IRS Updates Employee Plans Compliance Resolution System

Posted on August 19, 2008
On August 14th, the IRS released Revenue Procedure 2008-50. Rev. Proc. 2008-50 is 179-pages long, and updates the Employee Plans Compliance Resolution System (EPCRS), which the IRS last updated in 2006 with Rev. Proc. 2006-27. The IRS has issued a number of handy guides to Rev...

And the ERPA Contract Goes To??..

Posted on August 07, 2008
In a strange, almost bizarre, twist today, the IRS announced that they have awarded the contract to conduct the examinations for the Enrolled Retirement Plan Agent (ERPA) program to the American Institute of Retirement Education LLC, a partnership between the American Society of Pension Professionals & Actuaries (ASPPA) and the National Institute of Pension Administrators [...

Electronic Copies for Nothin? and Your Paper Copies Are Free

Posted on July 29, 2008
As more offices go green and provide information electronically, a growing question is whether you can charge participants and beneficiaries for paper copies. There are two theories for charging participants and beneficiaries for paper copies. The first theory is that trees will be saved because participants and beneficiaries will not want to pay [...

Fee and Expense Information for 401(k) Plans is About to Become Clearer

Posted on July 25, 2008
On July 22, 2008, the Dept. of Labor released new proposed regulations on fiduciary requirements for disclosures in participant-directed individual account plans effective for plan years beginning after January 1, 2009. Participant-directed Individual account plans are plans such as 401(k) plans where each participant has an account which they can select how they want [...

DOL Releases Proposed Fee Disclosure Regulations

Posted on July 23, 2008
The Dept. of Labor released the long-awaited proposed regulations on fee disclosures and fiduciary responsibilities. Officially called the proposed regulations on “Fiduciary Requirements for Disclosure in Participant-Directed Individual Account Plans”, these proposed regulations are 103 pages long and include a model disclosure notice...

Cashed Out Participant is Still a Participant for Breach of Fiduciary Lawsuits

Posted on July 21, 2008
When is comes to litigating over alleged fiduciary breaches, when is a terminated employee no longer a participant. If you think the answer should be as soon as the terminated employee receives a lump sum distribution of their entire account balance, you would be incorrect according to the 1st Circuit Court of Appeals...

Loans from Qualified Plans Generating Unprecedented Buzz

Posted on July 21, 2008
With the economy headed south, or already at rock bottom, depending upon where you live, it is not surprising that participants are borrowing from their retirement plans. What is surprising is the amount of buzz suddenly appearing in the popular media on this topic...

WSJ Article Provides Advice About Vesting

Posted on July 15, 2008
In a recent article in the Wall Street Journal, Kelly Greene answers the question from a reader about whether her employer can keep a percentage of the matching contribution in her account because she is not fully vested. It is not the question which is so interest, but the answer, provided by David Wray, [...

Another Corrections Act to the Pension Protection Act Passes the House

Posted on July 11, 2008
On Wednesday, the House of Representatives passed another Pension Protection Technical Corrections Act of 2008 by voice vote. This act, H.R. 6382, now heads to the Senate, where the last Pension Protection Technical Corrections Act of 2008, H.R. 3361, has been languishing since March 31, 2008...

Free Webcasts and Podcasts from the IRS and Other Miscellaneous Stuff

Posted on July 07, 2008
I always find a stack of “stuff” on my desk after a long weekend. Like everyone, I like free stuff, high tech stuff, and stuff that is designed for pension geeks. Here is a quick rundown of some of the more interesting stuff I found on my desk this morning: Tuesday, at 2pm ET, [...

IRS Issues Sample Plan Language for Transfer for ESOP?s S Corp Shares to Prevent Nonallocation Year

Posted on July 02, 2008
In a Special Edition of Employee Plan News, dated July 1, 2008, the IRS provides some guidance on sample language under Code section 409(p) for the Transfer of an ESOP’s S Corporation Shares. This plan language is designed to prevent a nonallocation year by transferring assets from the accounts of disqualified persons to the [...

Conclusion of the 2007-2008 IRS Priority Guidance Plan Year

Posted on June 30, 2008
June 30th marks the end of the IRS’ 2007-2008 Priority Guidance Plan. Tomorrow, making barely a ripple in the employee benefits universe, the IRS’ 2008-2009 Priority Guidance Plan will begin. Of course, the IRS has not released the 2008-2009 Priority Guidance Plan yet...

State of Florida to Buy US Sugar While US Sugar ESOP Litigation Continues

Posted on June 24, 2008
In a fascinating and completely unexpected twist to the U.S. Sugar ESOP class action lawsuit, the governor of Florida today announced that the State of Florida will buy U.S. Sugar for $1.75 billion. With the purchase, Florida will gain control over 187,000 acres of farmland in the northern Everglades while leasing the land back [...

Potential for IRS Data Mining Created by New Form 5307

Posted on June 23, 2008
The new edition of Employee Plan News, released today by the IRS, contains this warning information about the new Form 5307 - it is important that customers send in the original copy of the application and not a photocopy. Photocopies of the bar code will not scan properly...

Supreme Court Rules Against MetLife in Gordian Knot of a Decision

Posted on June 20, 2008
Often the entity that administers the plan, such as an employer or an insurance company, both determines whether an employee is eligible for benefits and pays benefits out of its own pocket. We here decide that this dual role creates a conflict of interest; that a reviewing court should consider that conflict as a factor [...

Interim CEO is Covered Employee for Purposes of 162(m) Tax Deduction

Posted on June 17, 2008
At what point does a member of a corporation’s board of directors qualify as an “outside director” of purposes of Code section 162(m)(4)(C)(i) after serving as an interim chief executive officer? The IRS answered this question today in Rev...

ABA Weighs In on the IRS Priority Guidance List

Posted on June 12, 2008
The American Bar Association’s Section on Taxation has sent their recommendations for guidance to be included in the 2008-2009 IRS Priority Guidance List. Their list of items is reasonable and highlights a few items which are sorely needed. Their guidance recommendations for employee benefits are: 1...

IRS Changes Reporting of ESOP Distributions on Form 1099-R

Posted on June 10, 2008
The IRS released Announcement 2008-56 today. In the short 2-page announcement, the IRS states that it will require dividends on employer securities that are distributed from an employee stock ownership plan (ESOP) under Code section 404(k) to be reported on Form 1099-R that does not report any other distributions...

Memoranda Includes Draft Opinion Letter When Disclosure Required for Tax Shelter Relief

Posted on June 03, 2008
When the IRS issued Announcement 2002-2, the Service made a tantalizing offer to taxpayers with possible tax shelter issues. In exchange for disclosure, the IRS offered to waive the accuracy penalty and underpayment of tax related to tax shelters. Announcement 2002-2 contains a list of 7 items under the title of “Information Required [...

Guidance on Funding Distributions from IRAs or Roth IRAs to Health Savings Accounts

Posted on June 03, 2008
Today, the IRS released 2 pieces of guidance for Health Savings Accounts (HSAs) - Notice 2008-51 and Notice 2008-52. First, the IRS released Notice 2008-51. It provides guidance on Code section 408(d)(9), which was added to the Tax Code in 2006 by Section 307 of the Health Opportunity Patient Empowerment Act of 2006, which was [...

Wisconsin Supreme Court Finds Denial of Health Benefits Arbitrary and Capricious, Lacking Specificity

Posted on May 29, 2008
Yesterday, the Wisconsin Supreme Court decided Summers v. Touchpoint Health Plan Inc., No. 2005AP2643 (May 28, 2008), affirming the Wisconsin Court of Appeals decision ordering the case remanded and the participant’s benefits in the Kimberly Clark health plan reinstated as of the date that the benefits were terminated...

ESOP not Sweet as Candy for Participants in U.S. Sugar ESOP

Posted on May 27, 2008
As the lawsuit against the U.S. Sugar ESOP proceeds in U.S. District Court for the Southern District of Florida, it continues to fascinate. Today, the International Herald Tribune is reporting that the company has announced employees owning shares through the ESOP will not be permitted to attend the annual shareholders meeting...

Boston College Creates Online Interactive Retirement Game

Posted on May 23, 2008
The Center for Retirement Research at Boston College has created an interactive retirement game, and posted it on their website. The game is called Get Rich Slow, and follows a fictional couple through several decades starting when they are in their 40’s...

Church 403(b) Plans, the Final 415 Regs, and Foreign Missionaries

Posted on May 21, 2008
Employee benefit plans involving churchs are fascinating because traditional employee plan concepts are a poor fit when it comes to church employees. With Church 403(b) plans caught in the intersection this year between the Final 403(b) Regulations, which may require some church plans to restate onto an updated plan document by January 1, 2009, [...

In Conflict Between Plan Document and SPD, SPD Prevails to Participant?s Detriment

Posted on May 21, 2008
With most cases involving a conflict between the plan document and the Summary Plan Description (SPD), it is the plaintiff who is arguing that the language in the SPD should apply instead of the language in the plan document. Not so for a case decided by the 6th Circuit today...

Convenient and Easy - DOL Provides Plan Information in an Electronic Booklet

Posted on May 20, 2008
Communicating with employees about the retirement plans available to them can be an exercise in boredom and frustration for everyone involved. The employee whose eyes are more glazed over than the donuts being served at the enrollment meeting will be the same terminated employee two year later who will fail to understand why they [...

California Supreme Court?s Decision on Domestic Partnerships May Raise Some Plan Document Issues

Posted on May 16, 2008
Yesterday, in In re Marriage Cases, No. S147999 (May 15, 2008), the California Supreme Court addressed the issue of whether domestic partnership is the same as marriage. As framed by the Court, the issue they addressed in this decision is: “Accordingly, the legal issue we must resolve is not whether it would be constitutionally permissible [...

DOL Working Group Ideas for Benefit Statements

Posted on May 13, 2008
The ERISA Advisory Council’s Working Group on Participant Benefit Statements has delivered it’s report to the Dept. of Labor. This working group was formed to study the Pension Protecion Act’s requirement that benefits statements are furnished to plan participants in defined benefit and defined contribution plans...

Health Savings Account Limits Announced for 2009

Posted on May 13, 2008
The IRS released Revenue Procedure 2008-29, containing the 2009 inflation adjusted amounts determined under Code section 223(g) for Health Savings Accounts (HSAs). For calendar year 2009, the annual limitation is $3,000 for deductions under Code section 223(b)(2)(A) for an individual with self-only coverage under a high deducitble health plan...

Railroad Retirement and the Pension Protection Act

Posted on May 07, 2008
Tucked away toward the end of the Pension Protection Act are two sections which made changes to Railroad Retirement. Section 1002 and Section 1003 both became effective on August 17, 2007, one year after the date PPA was enacted. Section 1002 is Entitlement of Divorced Spouses to Railroad Retirement Annuities Independent of Actual [...

ERISA Pop Quiz

Posted on May 07, 2008
Here is a pretty good ERISA pop quiz written Barbara P. Pletcher of the law firm of Trucker Huss. In 5 questions, Ms. Pletcher covers a wide variety of ERISA topics. See if you can answer all 5 questions correctly. (hat tip to BenefitsLink) Technorati Tags: Pension Protection Act, ppa, [...

Supreme Court May Address QDROs: Petitioner?s Merit Brief Due in Kennedy v. DuPont Savings

Posted on May 05, 2008
Fast on the heels of LaRue and MetLife, the U.S. Supreme Court is taking a look at another ERISA case - Kennedy v. Plan Administrators for DuPont Savings and Investment Plan, No. 07-636. The Petitioner, the estate of the participant, is required to file their merit brief today with the Court...

DOL Issues Guidance on Qualified Default Investment Alternatives

Posted on April 30, 2008
The Dept. of Labor has issued 3 pieces of guidance on qualified default investment alternatives (QDIAs) - a 2-page correcting amendment for Default Investment Alternatives Under Participant Directed Individual Account Plans, a 2-page Fact Sheet, and Field Assistance Bulletin No...

Working Retirement and Justice Scalia

Posted on April 29, 2008
Justice Scalia, on 60 Minutes this last Sunday, mentioned that his original plan when he was appointed to the Supreme Court had been to retire from the Court at age 65 because justices can retire from the Court at age 65 at 100% of annual compensation...

Some Plan Implications of Reclassification as IBM Reclassifies Employees from Salaried to Hourly

Posted on April 29, 2008
Paul Secunda has an interesting post today on the Workplace Prof Blog about IBM reclassifying workers from salaried to hourly. The corporate buzzword for this is “reclassification”, and the story, which originated on NPR Marketplace, also mentions FedEx reclassifying drivers as independent contractors, and Allstate reclassifying agents as independent contractors...

IRS Issues a Correction to the Proposed Cash Balance Regs

Posted on April 24, 2008
The IRS issued a correction to the Proposed Regulations on Hybrid Retirement Plans, commonly known as the proposed cash balance plan regulations, which the Service issued on December 27, 2007. Besides correcting a few grammatical errors, the IRS has made a significant change in Proposed Treas...

MetLife Day at the U.S. Supreme Court

Posted on April 23, 2008
Today, the U.S. Supreme Court heard oral argument in Metropolitan Life Ins. Co. v. Glenn, No. 06-923. MetLife v. Glenn is a case from the 6th Circuit Court of Appeals about conflicts of interest for ERISA administrators. The 6th Circuit reversed the judgment of the district court that MetLife’s decision finding Glenn no [...

Reduce, Reuse and Recycle the 2007-2008 IRS Guidance Priority List

Posted on April 22, 2008
Each year, the IRS issues the Guidance Priority List, containing the list of tax issues that the Service intends to address by issuing regulations, revenue rulings, revenue procedures, notices and other published administrative guidance. In Notice 2008-47, the IRS is inviting the tax community to submit recommendations by May 31, 2008, for guidance to [...

The Great 403(b) Prototype Urban Legend

Posted on April 17, 2008
In the pension geek handbook, Chapter Three is devoted to Urban Plan Legends. You know those stories - someone worked at a firm with an ERISA attorney who went to law school with another ERISA attorney who knows a guy who….. One of my favorite Urban Plan Legends is the one about the [...

Effective Dates for Code Section 430 and the Code Section 430 Regulations

Posted on April 16, 2008
The effective dates for the Code section 430 regulations are an interesting mix. Congress made new Code section 430 effective to plan years beginning after December 31, 2007. With the Pension Protection Act being enacted into law on August 17, 2006, implementing regulations to encompass the changes made by Code section 430 by December 31, [...

More Proposed Regs Released for New Code section 430

Posted on April 13, 2008
When Congress created new Code section 430 in Section 112 the Pension Protection Act in 2006, the impact of this new Code section was not immediately clear. The IRS has now provided a clear statement on their belief of the impact of new Code section 430 with the latest installment of proposed regulations for [...

IRS Re-Designs Form 5307

Posted on April 10, 2008
The new Form 5307 is available at IRS.gov, and it is better. Since the old Form 5307 can be used until September, 2008, and filing season for the EGTRRA defined contribution prototypes and volume submitter plans begins May 1, 2008, we had a competition around the office today to see which Form 5307 is [...

7th Circuit Applies Supreme Court?s Decision in LaRue to Defined Contribution Overvalued Stock Lawsuit

Posted on April 07, 2008
ERISA is a different statute, in a different title of the United States Code. Plaintiffs seek to use ERISA to recover for events that as a result of PSLRA could not support an action on behalf of shareholders at large. - Judge Easterbrook With the ink barely dry on the Supreme Court’s opinion in LaRue v...

A Little ERISA April Fool?s Day Humor

Posted on April 04, 2008
From the brilliant mind of Kevin B. Segal of MullinTBG comes this bit of ERISA humor about April Fool’s Day: Today, the Treasury and the Internal Revenue Service released Notice 2008-41, authorizing the creation of a support group dedicated to helping companies avoid imposition of penalties from the inadvertent violation of Internal Revenue Code Section 409A...

Update on a Walmart Case and New Online Website for Calculating Annuities

Posted on April 03, 2008
CNN is reporting that Wal-Mart has decided to not pursue reimbursement for medical expenses paid by the Walmart Stores, Inc. Associates Health and Welfare Plan for Deborah Shank. I previously blogged about this case here. (hat tip to Paul Secunda of the Workplace Prof blog)...

More IRS Guidance on Split Dollar Life Insurance

Posted on April 02, 2008
In Notice 2008-42, the IRS has provided guidance on new Code section 101(j), which was added by section 863(a) of the Pension Protection Act, and on Code section 264(f), which was added by the Taxpayer Relief Act of 1997. Notice 2008-42 provides that a modification of a split-dollar life insurance arrangement that does not [...

Anticipation of March 31st and No EGTRRA Opinion/Advisory Letters

Posted on April 01, 2008
March 31st came and went with no EGTRRA defined contribution opinion/advisory letters. I was hoping for a nice chart like the IRS did for the GUST opinion/advisory letters. My favorite actuary has a theory about Announcement 2008-23 and April Fool’s Day…...

Married for One Year Language Defeats Claim for Benefits

Posted on March 25, 2008
Common language contained somewhere in most qualified plan documents is the definition of spouse. Within that definition can be the requirement that a participant must be married for a period of one year before the spouse is recognized by the plan as the participant’s spouse...

IRS Selecting Vendor to Administer ERPA Exam

Posted on March 24, 2008
To earn the designation of Enrolled Retirement Plan Agent (ERPA) from the IRS, candidates must first pass an exam designed to demonstrate their competence. One of the first steps for the IRS in awarding the ERPA designation is for the Service to select the company who will actually administer the exam...

7th Circuit?s Decision on COLAs in Defined Benefit Case Will Not Be Reviewed by High Court

Posted on March 20, 2008
The U.S. Supreme Court has denied Rohm & Haas’ petition for writ of certiorari. On theOrder List for March 17th, the Court stated: “07-906 ROHM AND HAAS PENSION V. WILLIAMS, GARY The motion of Chamber of Commerce of the United States of America for leave to file a brief as amicus curiae is granted...

Rollovers to NonSpouse Beneficiaries Are Back With Passage of H.R. 3361 But For 2009 Instead of 2008

Posted on March 18, 2008
A little over a year ago, I started this blog to keep track of my notes about the Pension Protection Act. One of my first posts was about rollovers to nonspouse beneficiaries. One year and 126,210 visitors later, rollovers to nonspouse beneficiaries remain a hot topic...

IRS May Have Ended Form 5307 Roulette with Announcement 2008-23

Posted on March 17, 2008
In Announcement 2008-23, released on Friday, the IRS announced that: 1. The EGTRRA defined contribution prototype and volume submitter opinion/advisory letters will be issued March 31, 2008 for many plans. Some plans will have their opinion/advisory letters issued after March 31, 2008...

House of Representatives Moves Forward on Pension Protection Technical Corrections Act

Posted on March 14, 2008
In a surprise move, the House of Representatives passed the Pension Protection Technical Corrections Act, H.R. 3361, on March 12, 2008. The bill’s status is now engrossed as passed/agreed to in the House. The companion Senate bill, S.1974, was passed by the Senate in December, 2007...

Notice 2008-29 Permits Continued Reliance on Rev. Rul. 96-7 for Disability Mortality Tables

Posted on March 12, 2008
The IRS has issued Notice 2008-29, which permits the mortality tables from Rev. Rul. 96-7 for individuals who are entitled to benefits under a qualified defined benefit pension plan on account of disability until further guidance is issued. The rules of Rev...

Fifth Circuit: AD&D Plans Exist, Therefore They Are?ERISA

Posted on March 11, 2008
To be ERISA-qualified, a plan must: (1) exist; 5th Circuit Court of Appeals, Per Curium, Read v. Sun Life Assurance, No. 07-10945, March 7, 2008. In an interesting opinion from the 5th Circuit in Read v. Sun Life Assur. Co. of Canada, No. 07-10945 (5th Cir...

Shuttle Launch Tonight

Posted on March 10, 2008
What does a Shuttle launch have in common with the Pension Protection Act - really nothing except that I live and work directly across from the Kennedy Space Center, so tonight is devoted to non-ERISA/PPA related activity. Shuttle launches in general are amazing, and a night launch is really spectacular and not to be [...

IRS Provides Guidance on Qualified Optional Survivor Annuities (QOSAs)

Posted on March 05, 2008
Today, among several items released by the IRS, is guidance on QOSAs. QOSAs are Qualified Optional Survivor Annuities. Section 1004 of the Pension Protection Act amended Code section 417 to require that plans subject to Code section 401(a)(11) must offer participants a specific optional form of benefit as an alternative to a Qualified Joint & [...

DOL?s Proposed 7-Day Safe Harbor for Employee Contributions May Affect FAB 2008-01

Posted on March 04, 2008
In December of 2007, the Dept. of Labor released Field Assistance Bulletin 2008-01 addressing the trustee’s responsibility for the collection of delinquent employer and employee contributions. Part of the regulatory authority relied on by FAB 2008-01 was affected last Friday when the DOL released the new proposed safe harbor for employee contributions...

Another Possible ERISA Case for the U.S. Supreme Court

Posted on March 04, 2008
In a year of great upheaval in plan documents due to regulatory and legislative changes, the third branch of government has decided to join in and add to the ERISA stress factor. This year, the U.S. Supreme Court has already decided LaRue, has MetLife coming up on the oral argument calendar in April, and [...

Form 5500 Information Coming Soon to a Website Near You

Posted on February 26, 2008
With 5500 season about to start, now is a good time to take another look at Section 504 of the Pension Protection Act. Section 504 is the requirement that, for plan years beginning after December 31, 2007, the plan sponsor will display information from Form 5500 on an Intranet website maintained by the plan [...

U.S. Supreme Delivers Decision in LaRue on Recovery for Fiduciary Breaches

Posted on February 20, 2008
The U.S. Supreme Court has issued a decision in LaRue v. DeWolff, Boberg & Assoc. Inc., No. 06-856 (Feb. 20, 2008). (Hat tip to SCOTUSblog.) Numerous articles will be written in the next couple of days and months about the meaning and impact of LaRue...

IRS Settles Debate Over March 15th or March 17th

Posted on February 19, 2008
With March 15th, 2008, falling on a Saturday, there has been an ongoing debate over whether March 15th is the applicable deadline, or whether the deadline automatically is extended to Monday, March 17th. In the latest edition of Retirement News for Employers, Vol...

Compelling Decision From Court in CIGNA Cash Balance Class Action Case

Posted on February 18, 2008
Difficult, time-consuming, and expensive litigation with uncertain results - such as this case represents - is assuredly not a sensible way to manage the Nation’s retirement system for either employers or employees. - Judge Mark R. Kravitz U...

Supreme Court May Hear San Francisco ERISA Healthcare Case

Posted on February 14, 2008
SCOTUSblog is reporting that Supreme Court Justice Anthony M. Kennedy has asked the city of San Francisco to respond to a plea by the Golden Gate Restaurant Association in their application that San Francisco’s Health Care Security Ordinance is pre-empted by ERISA...

Making a Bad Situation Worse: An -11g Corrective Amendment Allocating to a Non-Vested Terminated Employee

Posted on February 12, 2008
When a plan fails the minimum coverage requirements of Code section 410(b), or the nondiscriminatory amount requirement of Treasury Regulation 1.401(a)(4)-1(b)(2), or the nondiscriminatory plan amendment requirement of Treas. Reg. 1.401(a)(4)-1(b)(4), the IRS permits the plan sponsor to adopt a corrective retroactive amendment to correct any of these failures...

Welcome to the Neighborhood - Two New ERISA-related Blogs

Posted on February 11, 2008
There are two new ERISA-related blogs worth checking out: 1. The attorneys of Baker & Daniels have launched an excellent new blog named the Benefits Biz Blog. Today, Bob Toth discusses Privacy and the New 403(b) Rules. 2. Aaron Juckett of ESOP Insourcing LLC has launched The One-Stop ESOP Blog, providing in-depth information [...

April 23rd is MetLife Day at U.S. Supreme Court

Posted on February 07, 2008
The oral argument calendar for April has been released by the U.S. Supreme Court, and MetLife v. Glenn is scheduled for April 23rd, 2008. It is one of two cases scheduled for that day - the other case is Meacham v. Knolls Atomic Power Laboratory about the burden of persuasion under the ADEA...

More Form 5500 Information Available on the Internet

Posted on February 05, 2008
The New York Times published an interesting article on Feb. 3rd, 2008, about information derived from filed Form 5500s published on a couple of websites. Mary Williams Walsh, in Trying to Clear Fog From Pension Plans, discusses the requirement in the Pension Protection Act which classifies troubled pension plans with the label of “at [...

IRS Discusses 3 Accrual Rules of 411(b)(1) in Rev. Rev. 2008-7

Posted on February 03, 2008
On Friday, the IRS issued Revenue Ruling 2008-7, discussing the backloading rules for pension plans and Code section 411(b)(1). In 21 pages, the IRS provides an analysis of a traditional pension plan which converted into a cash balance pension plan prior to the effective date of the new conversion requirements under the Pension Protection [...

An Actuarial Miscalculation, an Inadequate ERISA Pleading, and a Claim Made Outside the Contractual Time Frame

Posted on January 31, 2008
Three attorneys walk into a bar after a long day at the 8th Circuit Court of Appeals. One is an ERISA attorney, one is a trial attorney, and one is a mergers & acquisition attorney. The bartender takes one look at them, and says….. Yesterday, the 8th Circuit Court of Appeals discussed issues created [...

Redlined Copy of Document Required with Cycle C Submissions

Posted on January 28, 2008
Tucked away in Section 6.05 of Rev. Proc. 2008-6 is a requirement that determination letter submissions contain a highlighted or redlined copy of the plan document. It states: 6.05 Except in the case of applications involving master and prototype plans filed on Form 5307 or determination letters for volume submitter plans under section 9...

No Plan Document Requirement for Qualified Transportation Fringe Benefits

Posted on January 23, 2008
One of the reasons I write plan documents for a living is because they are so interesting. Each plan document is like writing a novel, and a good plan document reads like a good novel. The other reason I like writing plan documents for a living is that the IRS requires a plan [...

Another Wal-Mart Health and Welfare Plan Article in WSJ

Posted on January 23, 2008
Prof. Paul M. Secunda over at the Workplace Prof Blog discusses the article in yesterday’s Wall Street Journal about Wal-Mart’s health and welfare plan. In Wal-Mart Insured Ranks Rise, reporter Ann Zimmerman states that: “The world’s biggest retailer by sales said 690,970 employees, or 50% of its almost 1...

Qualified Transportation Fringe Benefits from More than One Employer

Posted on January 21, 2008
For an employee working two jobs, can they receive qualified transportation fringe benefits from each employer? With more employers adding transit and parking benefits for their employees, and more employees working multiple jobs, this question keeps popping up...

Petition for Cert. Filed with Supreme Court in another Walmart Reimbursement Case

Posted on January 18, 2008
Roy F. Harmon III of the Health Plan Law blog is reporting that a Petition for Certiorari has been filed in Administrative Committee of Wal-Mart Stores Inc. v. Shank, and has a copy of the petition for cert. posted on his website. He is also reporting that the Court has sent a letter to [...

Another Walmart Health and Welfare Plan Reimbursement Decision

Posted on January 16, 2008
Another Walmart Health and Welfare reimbursement decision, this time out of the 11th Circuit Court of Appeals. In Administrative Committee v. Horton, No. 07-10012 (Jan. 15, 2008), the 11th Circuit reversed the district court’s decision which had granted summary judgment to the participant, and remanded the case back to the district court for further [...

8 Questions to Ask When Reviewing ESOP Plan Documents

Posted on January 15, 2008
Aaron Juckett over at The One-Stop ESOP Blog posts a great reminder about items to look at when reviewing ESOP plan documents. In ESOP Planning: Plan Documents and Disclosures, Aaron discusses 8 questions to ask when reviewing the plan documents, including whether the plan documents are consistent with how the plan is being [...

One Last Look at Cycle B and Looking Ahead to Cycle C

Posted on January 14, 2008
In a few weeks, on January 31st, Cycle B ends and Cycle C begins. Cycle C marks the middle of this great experiment called the EGTRRA remedial amendment cycle restatement period. Like all experiments, charts and tables come in handy. When the IRS issued Rev...

What Makes a Domestic Relation Order a QDRO

Posted on January 11, 2008
Just about every ERISA plan document, both defined contribution and defined benefit plans, contain information about Qualified Domestic Relations Orders (QDROs). This is because ERISA generally prevents the distribution, assignment, or garnishment of benefits owed to a participant unless a QDRO allows payment to an alternate payee...

A New Employee Benefit Podcast

Posted on January 08, 2008
I love technology, especially podcasts, and am always on the lookout for new podcasts about ERISA or employee benefit issues. Employee Benefit News has launched a monthly podcast called “Five Minutes With”. On the first of each month, they will be posting 4 new podcasts on their website...

Governmental Roth 457 Plans May Become a Reality

Posted on January 07, 2008
Earlier this year, I posted about a provision contained in one of the 13 appropriate bills which would permit 457(b) plans to include a qualified Roth contribution program. H.R. 2419, also known as the Food and Energy Security Act of 2007, commonly known as the Farm Bill, contains Section 12512, which is “Participants in government section [...

Cost of Production Not Reason for TPA Firm to Not Produce Documents

Posted on January 04, 2008
As defined contribution prototype and volume submitter plans begin to restate for EGTRRA later this year, and electronic storage of the old plan documents and amendments becomes more prevalent, this case is worth remembering before designing an electronic storage system...

Three Out of Four: The New Proposed Regs on Funding Requirements for DB Plans

Posted on January 03, 2008
One of my favorite actuaries called me today about the meaning of this paragraph in the new Proposed Regulations on the Measurement of Assets and Liabilities for Pension Funding Purposes, released by the IRS on December 28, 2007. The paragraph is: I...

Decision in Cash Balance Conversion Case May Have Missed the Boat

Posted on January 02, 2008
The 1st Circuit Court of Appeals has delivered a very interesting opinion involving a grab bag of cash balance conversion issues. In Gillis v. SPX Corp. Individual Acct Retirement Plan, No. 07-1777 (Dec. 19, 2007), the 1st Circuit affirmed the district court’s granting of summary judgment in favor of the plan sponsor, stating that [...

IRS Rings in the New Year with New Cash Balance Regs and DB Lump Sum Regs

Posted on December 31, 2007
Just in time for the New Year, the IRS has released two major pieces of guidance in the form of proposed regulations. The first is Proposed Regulations on Hybrid Plans, providing guidance on changes made to cash balance plans by the Pension Protection Act and recent litigation...

Revisiting Rollovers to NonSpouse Beneficiaries Before 2008

Posted on December 26, 2007
When the House of Representatives failed to act on the Pension Protection Technical Corrections Act of 2007 last week, it created a terrific end-of-the-year PPA question. The question: Are plans required to provide rollovers to nonspouse beneficiaries? The answer: Yes No Yes The reason behind changing the answer from “Yes” [...

Close but no Cigar on PPA Technical Corrections Act of 2007

Posted on December 20, 2007
Last night, Congress adjoined without acting on H.R. 3361, the House of Representative’s version of the Pension Protection Technical Corrections Act of 2007. The Senate passed S. 1974, the Senate version of the Pension Protection Technical Corrections Act of 2007...