Benefits News Benefits News

July 20, 2009
74 Fed. Reg. 23951 contains a document deferring the effective date of the DOL's proposed investment advice rules from May 22 to November 18, 2009.

The DOL has posted to its web site an Application for Review of Denial of COBRA Premium Reduction for individuals to use to request DOL assistance if they are denied this benefit under their health plans.

The Spring 2009 edition of Retirement New for Employers and the May 2009 Special Edition of Employee Plans News describe, among other things, the proposed regulations published on May 18 that would allow safe harbor nonelective contributions to a section 401(k) plan to be reduced or suspended in mid-year without violating the plan-year requirement.

May 18, 2009
REG-115699-09, 74 Fed. Reg. 23134, would amend Treas. Reg. §§ 1.401(k)-3 and 1.401(m)-3 to allow safe harbor nonelective contributions to a section 401(k) plan to be reduced or suspended in mid-year, without violating the plan-year requirement, in the case of a substantial business hardship. The proposed rule is similar to the rule now found in the plan termination exception to the plan-year requirement, except that it does not include the exception found there for M&A transactions. The amendments would apply to amendments adopted after May 18, 2009.

Notice 1036-P, accompanied by IR 2009-50, gives payors of pension benefits the option to withhold additional income tax to offset the insufficient withholding that might otherwise result from the changes to the withholding tables made in February to incorporate the Making Work Pay Tax Credit, as added by ARRA.

April 20, 2009
Ann. 2009-34 announces that the IRS will establish a pre-approved prototype program for section 403(b) plans and has posted draft sample plan language on its web site for use in drafting section 403(b) prototype plans. Ann. 2009-34 also includes a draft Revenue Procedure for the program. Comments on the draft Revenue Procedure and draft plan language are requested by June 1, 2009. The April 2009 Special Edition of Employee Plans News reiterates the request for comments. It also requests entities that anticipate filing an opinion letter application as a section 403(b) prototype plan sponsor to send an email to IRS stating their intent.

Notice 2009-39 provides updated guidance on weighted average interest rates, yield curves, segment rates, and interest rates on 30-year Treasury securities for funding purposes and for purposes of calculating present values under section 417(e).

March 20, 2009
74 Fed. Reg. 11847 contains a final rule postponing the effective date of the DOL's investment advice final rules from March 23 to May 22 "to allow additional time for the Department to evaluate questions of law and policy concerning the rules."

74 Fed. Reg. 11971 contains an announcement that the DOL has made available four model notices for use with the COBRA premium discount provision added by the American Recovery and Reinvestment Act. The notices, plus new FAQs on the provision, are posted on the EBSA web site.

March 6, 2009
American Recovery and Reinvestment Act of 2009 The IRS has posted information on how employers can claim a payroll tax credit for the COBRA premium discounts that the American Recovery and Reinvestment Act ("ARRA") requires them to provide to certain involuntarily terminated employees. The IRS has posted information on new withholding tables incorporating the Making Work Pay credit, also added by ARRA.

Jan. 21, 2009
74 Fed. Reg. 3822 contains final regulations under section 408(b)(14) and (g) of ERISA and the parallel provisions of the Code, providing for investment advice to participants in self-directed plans and IRAs. The final regulations include provisions from the proposed regulations and class exemption issued on August 22, 2008.

Jan. 2, 2009
74 Fed. Reg. 17 contains a final regulation establishing procedures relating to the assessment of civil penalties under section 502(c)(4) of ERISA, as amended by the PPA. The final regulation is identical to the proposed regulation published on December 19, 2007.

Rev. Rul. 2009-2 , 2009-2 I.R.B. ___, which contains covered compensation tables for the 2009 plan year for use in determining contributions to DB plans and permitted disparity, has been revised to correct minor computation errors on the Rounded Covered Compensation Table.

Rev. Proc. 2009-6, 2009-1 I.R.B. ___, contains revised procedures for issuing DLs. Rev. Proc. 2009-8, 2009-1 I.R.B. ___, contains a new schedule of user fees for DL applications. The full texts are available from the tax services.

Notice 2009-3, 2009-2 I.R.B. ___, delays until December 31, 2009, the requirement in the new section 403(b) regulations that a section 403(b) plan have a written plan document that complies with section 403(b) and other applicable requirements. It also states that the IRS will be developing a prototype and determination letter program for section 403(b) plans, which will provide for retroactive remedial amendments. See also IR-2008-140.

Notice 2008-115, 2008-52 I.R.B. ___, extends the guidance and relief from the reporting requirements under section 409A provided in Notice 2007-89, 2007-46 I.R.B. 998, until further guidance is issued. This guidance has been expected for some time.

Nov. 25, 2008
DOL News Release announces the release of advance copies of Form 5500 for 2008.

Nov. 25, 2008
Field Assistance Bulletin 2008-04 contains answers to 42 frequently asked questions about the fidelity bonding requirements under section 412 of ERISA.

Notice 2008-108, 2008-50 I.R.B. ___, contains the cumulative list of statutory and regulatory changes that will need to be taken into account in determination letter applications for individually designed plans filing in Cycle D, beginning February 1, 2009.

Notice 2008-105 , 2008-48 I.R.B. ___, provides updated guidance on weighted average interest rates, yield curves, segment rates, and interest rates on 30-year Treasury securities for funding purposes and for purposes of calculating present values under section 417(e).

Guidelines regarding rollovers as business start-ups (ROBS), Memorandum from Director, Employee Plans, Tax Exempt and Government Entities Division, to Director, Employee Plans Examinations, and Director, Employee Plans Rulings & Agreements (Oct. 1, 2008), contains guidance to field agents on the use of retirement plan rollovers to fund new businesses.

Nov. 2008
Employee Plans News, Special Edition, announces that tax-qualified plans maintained by governmental employers, which are currently assigned to determination letter filing Cycle C, may, on a one-time basis, file during Cycle E instead. (The Cycle C deadline is January 31, 2009, while the Cycle E deadline is January 31, 2011.) No notice or election is required, and determination letter applications that have already been submitted may be withdrawn. However, as an inducement to stay in Cycle C, determination letter applications for governmental plans that do file during Cycle C "will go to the top of the determination letter queue" and will be eligible for reduced fees or sanctions under parts of EPCRS.

Oct. 31, 2008
Several of the documents described in an information sheet posted to the EESA web site on October 31 for financial institutions applying for the capital purchase program contain provisions dealing with executive compensation.

Oct. 29, 2008
University of Chicago v. United States No. 07-3686 (7th Cir.), agreed with the government that contributions to a section 403(b) contract on behalf of an employee that reduce the employee's salary are subject to FICA taxes pursuant to section 3121(a)(5)(D) even if the salary reduction is not individually negotiated, and upheld the government's imposition of failure-to-deposit and failure-to-pay penalties.

Oct. 16, 2008
Social Security Administration News Release and Fact Sheet announce the cost-of-living adjustments for 2009 for the social security wage base and other social security provisions.

Oct. 14, 2008
Treasury Department Press Release HP-1208 announces the development of three programs under the Emergency Economic Stabilization Act (EESA) and corresponding executive compensation and corporate governance standards. The three programs are the Troubled Asset Auction Program (TAAP), the Troubled Assets Relief Program (TARP) Capital Purchase Program (CPP), and a program for Systemically Significant Failing Institutions (SSFIs).

Notice 2008-94, 2008-44 I.R.B. ___, provides guidance on new sections 162(m)(5) and 280G(e), were added by section 302 of EESA. The new sections impose additional restrictions on compensation paid to certain top executives by certain financial institutions that sell at least $300 million of troubled assets to the Treasury Department, other than solely through direct purchases.

Oct. 15, 2008
Letter from New York State Attorney General Andrew M. Cuomo to the Board of Directors of American International Group (AIG) states his office's belief that some executive compensation "expenditures and payments, made in the absence of fair consideration, violated New York law," specifically New York debtor-creditor law on fraudulent conveyances.

Oct. 20, 2008
T.D. 9427 73 Fed. Reg. 62410, contains final regulations issued jointly with the DOL and HHS under the Newborns' and Mothers' Health Protection Act.

Oct. 17, 2008
Interpretive Bulletin 08-1, 73 Fed. Reg. 61734, modifies and supersedes the guidance in Interpretive Bulletin 94-1 on the legal standards imposed on fiduciaries when considering investments in "economically targeted investments."

Oct. 17, 2008
Interpretive Bulletin 08-2, 73 Fed. Reg. 61731, modifies and supersedes the guidance in Interpretive Bulletin 94-2 with respect to the exercise of shareholder rights and written statements of investment policy, including proxy voting policies and guidelines.

Oct. 7, 2008
Finance Committee Press Release requests public comments on proposed legislation that would require employers to disclose on Form W-2 the aggregate cost of tax-exempt coverage under a health plan that it provides to an employee.

Jun. 17, 2008
TAM 200841042 concludes that stock distributions from an employer's ESOP to its participants should not be treated as cash distributions simply because participants exercise their put options and sell their shares back to the employer following the distribution.



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