Understanding Employee Benefits

IRS Announces Suspension of the Lost Participant Letter Forwarding Program

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            On August 31, 2012, the IRS issued Rev. Proc. 2012-35 and a related press release announcing that effective immediately, the IRS will no longer forward letters on behalf of plan sponsors or administrators of qualified retirement plans to assist in locating missing participants and beneficiaries of vested pension benefits.... Read More

Topics: Fiduciary Guidance, Retirement Plans

Certain Employment and Severance Agreements May Need to Be Amended by 12/31/12 to Avoid 409A Penalties

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            In IRS Notice 2010-6 and Notice 2010-80, the IRS expanded rules outlined in the 2007 Final Regulations under Code Section 409A to describe a potential violation of that Section where certain severance type payments are made upon the execution of a release (or the expiration of a statutory rescission... Read More

Topics: Compensation Questions

Reminder: Retirement Plan Fee Disclosures Received? –Review and Pass it Along

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Defined contribution plan fiduciaries were required to receive fee disclosures from covered service providers by July 1, 2012 pursuant to final regulations under ERISA §408(b)(2). See Blog Posts. http://benefitsnotes.com/2012/05/labor-issues-qas-on-required-fee-disclosures-to-participants/  http://benefitsnotes.com/2012/04/408b-2-disclosures-that-wasnt-so-bad-was-it/ A separate Labor Regulation now requires that plan administrators provide an initial fee disclosure to plan participants and beneficiaries by... Read More

Topics: Fiduciary Guidance, Retirement Plans

No Good Deed Goes Unpunished

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A recent Sixth Circuit Court of Appeals case considered a situation that we have seen in our practice: An employee gets sick, goes out on FMLA leave, and then is placed on short term disability. The employer’s health plan provides that employees are eligible for the plan if they are regularly... Read More

Topics: Health Plan

Department of Labor Withdraws Controversial Guidance On Self-Directed Brokerage Accounts in 401(k) Plans

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On May 7, 2012 the Department of Labor issued a set of questions and answers via Field Assistance Bulletin FAB No. 2012-02 (http://www.dol.gov/ebsa/regs/fab2012-2.html) concerning the new fiduciary fee disclosures in Labor Regulations §2550.408(b)-2 and participant fee disclosure requirements outlined in Labor Regulations §2550.404(a)-5. Q&A 30 of the May 7th FAB... Read More

Topics: ERISA and Other Benefits Litigation, Fiduciary Guidance, Retirement Plans

IRS Clarifies Medicare Premium Deductions for Sole Proprietors, Partners and S Corporation Shareholder-Employees

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Sole proprietors, partners (including LLC members) and two percent shareholders in an S corporation are not treated as “employees” for purposes of certain benefits. Among those benefits is employer provided health insurance coverage. While employer subsidies for health coverage are generally excluded from the income of employees, that is not... Read More

Topics: Cafeteria Plans, Health Plan, Payroll