Blog Posts: Benefits Law Update

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Named a Top 10 Blog in Compensation and Benefits, Verrill's attorneys use the Benefits Law Update blog to provide timely updates and commentary on developments in law affecting employee benefit plans and executive compensation arrangements.

Casting a Wider Net: SECURE 2.0 Gives “Long-Term Part-Time Employees” Faster Access to 401(k) Plans and 403(b) Plans

The SECURE 2.0 Act of 2022 (“SECURE 2.0”) promotes and expands access to retirement plans for American workers in several ways. Among other things, SECURE 2.0 strengthens and expands the special 401(k) plan eligibility requirements for long-term part-time workers established by the Setting Every Community Up for Retirement Enhancement...
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SECURE 2.0 Provides New and Expanded Retirement Plan Correction Rules

With the passage of the SECURE 2.0 Act of 2022 (“SECURE 2.0”) on December 29, 2022, Congress has made several changes related to the correction of errors in administering retirement plans. These changes include expansion of the IRS’s self-correction program for retirement plan failures, changes related to recovery of...
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Pension-Linked Emergency Savings Accounts: Something Old, Something New, Something Borrowed, Something Forthcoming

Following the initial flurry of publications summarizing the retirement plan enhancements under the SECURE 2.0 Act of 2022 (“SECURE 2.0”), this post takes a deeper dive into one of those enhancements: the optional “pension-linked emergency savings account” (“PLESA”). Plan sponsors may add PLESAs to their defined contribution retirement plans...
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Next Steps for Making Collective Investment Trusts Available to More Retirement Plans

Collective investment trusts (“CITs”) have become an increasingly popular choice for 401(k) plan investment menus over the past decade, consistent with a trend toward lower-cost investment options that has been driven, in part, by widespread litigation. However, certain technical restrictions have kept CITs from being offered as investment options...
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A Last-Minute Gift – Prescription Drug Reporting Grace Period and Good Faith Relief

In a move akin to last-minute gift-giving, the Departments of Labor, Health and Human Services, and the Treasury (the “Departments”) released FAQ 56 on December 23, 2022, which provides relief regarding the Prescription Drug Data Collection (“RxDC”) reporting requirements under the Consolidated Appropriations Act, 2021. The relief arrives a...
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When Cash is not King: Holiday Gifts as “De Minimis” Fringe Benefits

To celebrate the holiday season, this post highlights the tax consequences of employer-sponsored holiday perks such as gift cards, turkeys, hams and gift baskets. Under the current tax rules, employers may give infrequent low value gifts of property or services to employees on a tax-free basis. [1] Cash and...
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401(k) Plan Matching Contributions: To True Up or Not True Up?

As a matter of plan design, for purposes of matching contributions some 401(k) plans provide that a participant’s compensation for the entire plan year is taken into account (regardless of whether the participant makes elective deferrals with respect to each payroll period during the year), while other 401(k) plans...
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IRS Guidance Expands Access to ACA Premium Tax Credit, Allows Cafeteria Plan Sponsors to Permit Employees to Revoke Family Coverage Mid-year

Final Regulations under Section 36B of the Internal Revenue Code On October 11, 2022, the Internal Revenue Service (IRS) issued Final Regulations under Code Section 36B relating to eligibility for the Affordable Care Act’s (“ACA’s”) premium tax credit (“PTC” or “subsidy”). The Final Regulations expand eligibility for the PTC...
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New IRS Determination Letter Program for 403(b) and 401(a) Plans

On November 7, 2022, the IRS issued Revenue Procedure 2022-40 , which allows certain tax-exempt employers (such as schools, charities, and churches) to apply for IRS determination letters on their individually designed section 403(b) retirement plans (“403(b) plans”) in substantially the same manner as plan sponsors of individually designed...
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ERISA Section 404(c) Protection: A Refresher for Fiduciaries

The Employee Retirement Income Security Act (“ERISA”) imposes both (i) significant responsibilities on fiduciaries of participant-directed individual account plans, including 401(k) plans, and (ii) personal liability for losses suffered by a plan if those responsibilities are breached. Fortunately, ERISA provides important relief from liability for investment losses for these...
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Proposed Changes to Massachusetts Paid Family & Medical Leave Regulations

The Massachusetts Department of Family and Medical Leave has proposed changes to the regulations governing the state’s paid family and medical leave program. The proposed changes are intended to clarify the requirements related to maintaining health insurance benefits for employees on family or medical leave. While the proposed changes...
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The How and When of Separations from Service Under Section 409A

Readers who regularly work with deferred compensation plans will know that Section 409A of the Internal Revenue Code (“Section 409A”) prescribes six events or times at which deferred compensation may be distributed to participants in a deferred compensation arrangement. The first, and perhaps most frequently used, of these permissible...
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Amending Your Retirement Plans this Year for SECURE Act and CARES Act Changes

This post was updated on September 29, 2022. On August 3, 2022, the IRS extended the deadline for retirement plan sponsors to adopt amendments necessary to comply with the Setting Every Community Up for Retirement Enhancement Act of 2019 (the “SECURE Act”) and the Bipartisan American Miners Act of...
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DOL Proposes Amendments to QPAM Exemption

On July 27, 2022, the Department of Labor (DOL) proposed a set of amendments to Prohibited Transaction Class Exemption 84-14, the so-called “QPAM Exemption,” which permits an investment fund [1] holding assets of ERISA plans and IRAs that is managed by a Qualified Professional Asset Manager (“QPAM”) to engage...
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What Employers Need to Know About Access to Reproductive Care After Dobbs

The United States Supreme Court’s decision in Dobbs v. Jackson Women’s Health Organization , No. 19-1392 (June 24, 2022) overturning Roe v. Wade and Planned Parenthood v. Casey, has led to a host of different responses from employers across the country—specifically those with employees in states that now ban...
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Health Plans: PCORI Fee Is Due August 1, 2022

What is the PCORI Fee? The Affordable Care Act created a non-profit corporation, the Patient-Centered Outcomes Research Institute (“PCORI”), to conduct research to help individuals, providers, and policymakers make better healthcare choices by advancing comparative clinical effectiveness research. PCORI is financed by a fee imposed under Internal Revenue Code...
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IRS Announces New Pilot Program for Retirement Plan Audits

On June 3, 2022, the Internal Revenue Service (“IRS”) announced a new pre-examination compliance pilot program beginning in June 2022. Under the pilot program, the IRS will notify a plan sponsor by letter that its retirement plan has been selected for examination and will provide the plan sponsor with...
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Department of Labor Guidance and Federal Initiatives Counsel a Wait-and-See Approach for 401(k) Plan Fiduciaries Interested in Cryptocurrency Options

On March 10, 2022, the Department of Labor published Compliance Assistance Release 2022-01, 401(k) Plan Investments in “Cryptocurrencies” . The Release strongly discourages the addition of cryptocurrency (and other digital asset) options to the investment menus in ERISA retirement plans at “this early stage in the history of cryptocurrencies.&rdquo...
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DOL Signals Heightened Enforcement of Non-Quantitative Treatment Limitation Requirements

Introduction . When the U.S. Department of Labor issued its biennial 2022 Mental Health Parity and Addiction Equity Act (“MHPAEA”) Report to Congress earlier this year, it outlined significant noncompliance by health plans. (Full Report here .) Specifically, it found that plans were not complying with the new comparative...
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Proposed IRS Regulations Clarify SECURE Act Changes to RMD Rules for Beneficiaries

When the Setting Every Community Up for Retirement Security Act of 2019 (SECURE Act) took effect on January 1, 2020, it changed the rules for retirement plan required minimum distributions (RMDs) to participants and beneficiaries. Earlier this year, the IRS released proposed regulations implementing those changes. The regulations are...
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How many participants is too many for a top hat plan?

A client recently reviewed a census of participants in its deferred compensation plan and found that the covered group amounted to nearly 15% of its total workforce. Mindful of the need to limit the number of participants in a top hat plan, this compliance-oriented organization asked whether it should...
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How to Shoot Yourself in the Foot with Your SPD

Benefit plan sponsors sometimes send out Summary Plan Descriptions (SPDs) having given too little thought to the legal consequences. Two recent cases illustrate how an organization can end up in serious and costly litigation based on statements that did not have to be made in SPDs that did not...
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Surprise Medical Bills: Texas District Court Vacates Portion of Independent Dispute Resolution (IDR) Process in Agency Rule

The U.S. District Court for the Eastern District of Texas recently vacated a portion of the Requirements Related to Surprise Billing, Part II, Interim Final Rule (the “Rule”) regarding the independent dispute resolution (IDR) process that applies to surprise medical bills. [1] Specifically, the Court vacated a controversial provision...
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Correcting 401(k) Plan Excess Elective Deferrals

With the April 15 deadline for distributing excess elective deferrals fast approaching, this post summarizes the rules for correcting excess elective deferrals made to a 401(k) plan. In brief, excess elective deferrals not distributed from a 401(k) plan by April 15 of the calendar year following the calendar year...
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Required Minimum Distributions and Missing Plan Participants

In January of 2021, we published two blog posts regarding Department of Labor (“DOL”) guidance on missing retirement plan participants. The first post describes DOL guidance on best practices for locating missing retirement plan participants. The second post describes the DOL’s Terminated Vested Participants Project (“TVPP”), which was initiated...
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Firm Highlights

Blog

Proposed Regulations on How to Use Forfeiture Accounts: Helpful Guidance and a Great Reminder to Plan Sponsors

On February 27, 2023, the IRS published proposed regulations on the use of forfeitures in qualified retirement plans. [1] For defined contribution plans, the regulations provide welcome clarity on what forfeitures can be used...

News

39 Verrill Attorneys Named 2022 Super Lawyers and Rising Stars

Blog

Casting a Wider Net: SECURE 2.0 Gives “Long-Term Part-Time Employees” Faster Access to 401(k) Plans and 403(b) Plans

The SECURE 2.0 Act of 2022 (“SECURE 2.0”) promotes and expands access to retirement plans for American workers in several ways. Among other things, SECURE 2.0 strengthens and expands the special 401(k) plan eligibility...

Matter

Defined Contribution Plans Investment Menu Harmonization

We advised a major Massachusetts health system regarding the harmonization and rationalization of more than two dozen defined contribution plans with participant-directed investments, which were the combined legacy of several mergers by which the...

Event

Maine HR Convention: Workshop C: What Every Plan Sponsor Needs to Know-Your Fiduciary Duties in 2023

Join Verrill's Christopher S. Lockman at the 2023 Maine HR Convention where he will be presenting Workshop C: What Every Plan Sponsor Needs to Know-Your Fiduciary Duties in 2023 . This workshop will review...

Publication/Podcast

More to Consider Concerning the FTC’s Proposed Rule Prohibiting Non-Competition Clauses

Updated 2/9/2023: The proposed rule is open to public comment for a period ending March 20, 2023. As previously reported by Verrill attorney Tawny Alvarez in the firm’s “Taking Care of HR Business” blog...

Blog

SECURE 2.0 Provides New and Expanded Retirement Plan Correction Rules

With the passage of the SECURE 2.0 Act of 2022 (“SECURE 2.0”) on December 29, 2022, Congress has made several changes related to the correction of errors in administering retirement plans. These changes include...

Matter

Comprehensive Benefit Plans Representation of Seller in Strategic Acquisition

We represented the largest physician network in Massachusetts in the employee benefits and executive compensation aspects of its acquisition by one of the largest health care companies in the United States. After several rounds...

Publication/Podcast

Amending Your Retirement Plans this Year for SECURE Act and CARES Act Changes

This post was updated on September 29, 2022. On August 3, 2022, the IRS extended the deadline for retirement plan sponsors to adopt amendments necessary to comply with the Setting Every Community Up for...

Matter

Advised Fortune 500 Company on Group Health and Welfare Benefit Plans

We were engaged by a Fortune 500 manufacturing company to provide legal and compliance services regarding its group health and welfare benefit plans. During the course of our representation, we have advised the company...

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