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.

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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Nonqualified Deferred Compensation and the Special Timing Rule HR Professionals Should Be Aware of for FICA Tax Purposes

Twenty years ago this month the Enron Corporation imploded in spectacular fashion and declared bankruptcy. In the weeks leading up to its bankruptcy filing, over 100 highly compensated employees raced to receive early distributions of nonqualified deferred compensation, and were ultimately successful in removing over $50 million from the...
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Retirement Plan Administrators: Are You Ready to Comply with the New Lifetime Income Disclosure Requirement for Benefit Statements?

Lifetime Income Disclosure Requirement . The Setting Every Community Up for Retirement Enhancement Act of 2019 (the “SECURE Act”), enacted December 20, 2019, added a new annual disclosure requirement for benefit statements to participants and beneficiaries. The new disclosure requirement applies to all ERISA-covered defined contribution plans ( e.g...
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Employee Benefits & Executive Compensation 2021 Summer Client Advisory

Click here to view as a PDF. This Client Advisory summarizes developments in the law governing employee benefit plans prompted by the COVID-19 pandemic. We explain what these developments mean for plan sponsors and highlight the need to adopt plan amendments within limited time periods in order to fully...
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ESG Ping-Pong®

The recent regulatory back-and-forth over the investment of ERISA-governed retirement plan assets based on environmental, social, and corporate governance (“ESG”) factors has demonstrated that ESG investing will remain under an intense spotlight for some time to come, and the rules can change quickly. As a result, investment fiduciaries should...
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Employee Benefits & Executive Compensation 2020 Year-End Client Advisory

Click here to view as a PDF . This Client Advisory highlights important developments in the law governing employee benefit plans over the past year. It offers insight into what these developments mean for employers and plan sponsors and previews developments we expect to see in 2021. The following...
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Target Date Funds: Are You Asking the Right Questions?

Eight years ago, the U.S. Department of Labor (“DOL”) issued “tips” for retirement plan fiduciaries to consider when selecting and monitoring target date retirement funds (“TDFs”). At the time, the DOL noted that TDFs were becoming “increasingly popular.” Who could have predicted how popular? Earlier this year, Barron’s magazine...
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DOL Proposed Regulation Highlights the Risks of ESG Investing for ERISA Fiduciaries

On June 23, 2020, the U.S. Department of Labor (“DOL”) issued a proposed regulation outlining the duties of an ERISA fiduciary when considering an investment that incorporates environmental, social, and corporate governance (“ESG”) factors. [1] Some believe that the DOL will likely move quickly to finalize the regulation before...
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December 2019 Client Advisory

This Client Advisory, originally distributed in December 2019, highlights important developments in the law governing employee benefit plans and executive compensation over the past year. It offers insight into what these developments mean for employers and plan sponsors and previews developments we expect to see in 2020. The following...
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FMLA, Disability, & Sick Leave Management: A Panel Discussion

Join the Maine Employee Benefits Council (MEBC) on Wednesday, October 17 for a panel discussion on the Family Medical Leave Act (FMLA), disability, and sick leave management. Panelists will discuss federal and state specific paid leave laws, examine the requirements for Maine employers who have employees in the particular...
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New Tax Credit for Paid Leave – Part 2: IRS Issues Helpful Guidance

As expected, the IRS recently issued additional guidance concerning the new paid leave tax credit codified as Code Section 45S. (You can read Part 1 of this series here .) The guidance, set forth in IRS Notice 2018-17 , is presented in the form of 34 questions and answers...
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New Tax Credit for Paid Leave: What Benefits Professionals Should Know

The 2017 Tax Cuts and Jobs Act contains a two-year pilot project, developed by Senators Angus King (I-ME) and Deb Fischer (R-NE), that provides a tax credit to employers that offer at least two weeks of paid leave to low and moderate income employees. If your company already offers...
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Practical Guidance for Required Minimum Distributions and Missing Participants

Retirement plan administrators often run into this problem: a participant has reached his or her required beginning date – the date on which distributions must commence under the required minimum distribution (RMD) rules of Code Section 401(a)(9) – and the participant cannot be located. A recent IRS Field Memorandum...
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Two Things EPCRS Does Not Tell You About Retroactive Amendments, But You May Want to Know

The Employee Plans Compliance Resolution System (EPCRS) is the IRS' comprehensive correction system for tax-qualified retirement plans, currently set forth in Rev. Proc. 2008-50 (we expect a new EPCRS Rev. Proc. to be released in the near future). One correction method under EPCRS allows operational failures to be voluntarily...
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Church Plan Administrators Are Subject to State Law Claims

A "church plan" – whether maintained by an actual church or by a church affiliated organization (such as a college or hospital that is church controlled) – is exempt from ERISA unless it makes an irrevocable electionto subject itself to ERISA. Most church plans do not make that election...
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IRS Getting Better and Better at Selecting and Auditing Noncompliant Plans

According to a report recently published by the Treasury Department's Inspector General for Tax Administration, the IRS has significantly improved its ability to select noncompliant retirement plans for examination and is achieving greater success results in those examinations. The report describes the methods used by the IRS to identify...
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IRS Swamped by EPCRS Applications: The Price of Popularity

The IRS Employee Plans Compliance Resolution System (EPCRS) has been a true success story for the Service and for plan sponsors. Under EPCRS, a plan sponsor may voluntarily correct a wide variety of errors made in the administration or drafting of a tax-qualified retirement plan, with a more limited...
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Reporting Health Care Costs on Form W-2

The Affordable Care Act requires employers to report on Form W-2, for informational purposes only, the cost of the group health benefits provided to each employee. IRS Notice 2011-28 (issued March 29, 2011) provides interim guidance on how this new information reporting obligation is to be implemented. Employers are...
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Ignoring the IRS Is Not a Good Idea (another example)

On February 23, 2011, the IRS indicated that its 401(k) Compliance Check Questionnaire Project is entering its next phase. As discussed in a prior post , in May 2010 the IRS, through its Employee Plans Compliance Unit, sent letters to a statistically valid sample of 1,200 401(k) plan sponsors...
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Plan Disqualification Happens If You Don't Follow Basic Rules!

A recent Tax Court case, Hollen v. Commissioner (2011, T.C. Memo 2011-2), offers a stark reminder that the IRS can and will seek to disqualify a tax-qualified retirement plan if the plan sponsor fails to comply with key legal requirements and fails to correct the failure. In Hollen a...
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Firm Highlights

Blog

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...

Publication/Podcast

Employee Benefits & Executive Compensation 2021 Summer Client Advisory

Click here to view as a PDF. This Client Advisory summarizes developments in the law governing employee benefit plans prompted by the COVID-19 pandemic. We explain what these developments mean for plan sponsors and...

Publication/Podcast

2021 Year End Employee Benefit Plan Amendments

Health and Welfare Plans Employers that made available COVID-19 relief and benefit enhancements in 2020 – such as the increased carry over limit and extended grace period for health flexible spending accounts – need...

Blog

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...

Blog

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...

Blog

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...

Blog

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...

Blog

Required Minimum Distributions and Missing Plan Participants

Blog

Deciphering First Circuit’s Thirty-page Primer on NQTL Analysis and ERISA Information Requests

The widely publicized 2022 Report to Congress regarding the Mental Health Parity and Addiction Equity Act (“Parity Act”) forewarned greater enforcement efforts by the Department of Labor and highlighted suspected deficiencies in health plans&rsquo...

Blog

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...

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