IAnyone who is remotely familiar with employee benefits is aware of the fact that changes frequently occur to governing laws, regulations, and other guidance. One challenge for employers in this area is keeping their plan documents current, so they include all applicable changes’ provisions. Thus, retirement plan sponsors must carefully monitor changes that necessitate plan […]

As noted in the June 2018 edition of The Speed Reader, as of that date the IRS’s safe harbor explanations for eligible rollover distributions did not include recent rules regarding qualified retirement plan participants who have an outstanding plan loan when their employment with the plan sponsor terminates or when their plan terminates. Lo and […]

  On January 2, 2018, the IRS published Revenue Procedure 2018-4. This is the IRS’s annual guidance setting forth application fees under various IRS approval programs for retirement plans (e.g., approval of an applicant’s plan document language; approval of an applicant’s compliance issue correction method). In particular, this new guidance makes significant changes to the […]

  As background, IRS regulations under Internal Revenue Code Section 72(p), which govern participant loans from certain retirement plans such as 401(k) plans, provide that loan repayments must involve a substantially level amortization of the loan. A participant’s failure to make any installment repayment when due violates that level amortization requirement and generally results in […]

  In an internal memorandum dated November 21, 2016, the IRS set forth new procedures that its examiners must follow when conducting audits of, among other entities, employee benefit plans. Specifically, the new procedures apply to IRS Information Document Requests (“IDRs”). IDRs are used to notify taxpayers about items (e.g., plan documents and payroll records) […]

  Fortunately, the IRS realizes that it is almost impossible to have a retirement plan with no plan document issues or operational issues. Thus, for many years the IRS has maintained its Employee Plans Compliance Resolution System (“EPCRS”). The EPCRS provides three formal programs for correcting retirement plan compliance issues, as well as guidance on […]

On April 8, the IRS released Chief Counsel Memorandum 201615013 (the “Memo”). The Memo provides helpful guidance regarding testing certain employees as a separate group for purposes of minimum coverage testing, as well as for purposes of the so-called ADP and ACP nondiscrimination tests. By way of background, the Internal Revenue Code (the “Code”) provides […]