Blog Posts: Benefits Law Update
Visit the Full BlogVerrill’s Benefits Law Update blog delivers timely insights and practical guidance on the ever-evolving landscape of employee benefits and executive compensation. Our blog provides up-to-date analysis and commentary on a wide range of topics to provide timely updates and commentary on developments in law affecting employee benefit plans and executive compensation arrangements.
Plan Sponsors: How much thought have you given to your defined contribution retirement plan’s default beneficiary hierarchy?
Despite efforts by plan sponsors and third-party administrators/plan recordkeepers to communicate to defined contribution retirement plan participants the importance of designating a beneficiary to receive any remaining vested account balance upon their death, some participants simply fail to do so. In the absence of a participant’s valid beneficiary designation...
DOL Announces Temporary Enforcement Policy Regarding Transfer of Small Retirement Benefit Payments of Missing Participants to State Unclaimed Property Funds
Retirement plan fiduciaries have a new option for handling small benefit payments owed to missing participants and beneficiaries thanks to a temporary enforcement policy announced by the Department of Labor (“DOL”) earlier this month in DOL Field Assistance Bulletin No. 2025-1 (“FAB 2025-1”). [1] The Policy Under the policy...
IRS Issues Guidance Addressing Matching Contributions on Student Loan Payments
Section 110 of the SECURE 2.0 Act of 2022 (“SECURE 2.0”) permits employers maintaining a 401(k), 403(b), governmental 457(b), or SIMPLE IRA plan to make matching contributions based on qualified student loan payments (“QSLPs”), effective for plan years beginning after December 31, 2023. [1] On August 19, the IRS...
Retirement Plans: What Categories of Employees may be Excluded?
We are often asked about the permissibility of excluding certain categories of employees from participating in an employer’s tax-qualified retirement plan. [1] This post provides a high-level summary of what is and is not permitted. Excludable by Statute . Certain categories of employees, by statute, may be excluded from...
Maine’s Mandatory Retirement Savings Program: What Employers Need to Know
On October 18, 2023, the Maine Retirement Savings Board adopted a final rule implementing Maine’s state-run retirement savings program, the Maine Retirement Investment Trust or MERIT. MERIT is intended to help employees who do not have access to a retirement plan through their employer save for retirement by requiring...
New Options for Retirement Plan Distributions Under SECURE 2.0
This post summarizes the new distribution options, including penalty-free withdrawals, applicable to defined contribution plans under the SECURE 2.0 Act of 2022 (“SECURE 2.0”) and provides a timeline of their effective dates. The new options further evidence Congress’s growing appetite for approving legislation that allows greater pre-retirement access to...
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...
Agencies Heed President’s Call to Take Action to Protect Access to Sexual and Reproductive Health Care Post-Dobbs
Within days of the Supreme Court’s June 24 th Dobbs decision, which held that the Constitution does not guarantee the right to an abortion, key government agencies have taken action to protect access to sexual and reproductive health care: On June 27, the Secretaries of the Departments of Health...
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...
IRS Issues Guidance Clarifying the Application of COVID-19 Outbreak Period Extensions for Electing COBRA Continuation Coverage and Paying COBRA Premiums
On October 6, 2021, the IRS issued Notice 2021-58 , providing helpful guidance on COBRA continuation coverage in two key areas: (1) the application of the extended timeframes for electing COBRA continuation coverage and paying COBRA premiums in response to the on-going COVID-19 national emergency, and (2) the interaction...
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...
DOL Cybersecurity Guidance
This post provides a high-level summary of the Department of Labor’s cybersecurity guidance issued in April and identifies actions retirement plan sponsors and other plan fiduciaries should consider taking now in light of the guidance and the fact that the DOL has started sending information requests under an audit...
Order of Benefit Deductions from Employee Pay
From time to time we field questions about the order in which deductions for various employee benefits ( e.g. , 401(k) plan elective deferrals and insurance premiums for welfare benefit plan benefits) should be taken from an employee’s pay. The questions range from whether ERISA mandates a specific order...
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...
401(k) Plan Sponsors – Time to Focus on Compliance with the SECURE Act’s Eligibility and Vesting Rules for Long-Term, Part-Time Employees
As noted in our January 7, 2020 Client Advisory , the Setting Every Community Up for Retirement Enhancement Act of 2019 (the “SECURE Act”) requires 401(k) plans to allow certain long-term, part-time employees to make elective deferrals. The SECURE Act also mandates special vesting rules for such employees with...
Supreme Court Holds Pension Plan Participants Lack Standing to Sue Fiduciaries for Breach of Duties
In Thole v. U.S. Bank , a 5-4 Supreme Court decision issued on June 1, the Court held that retired participants in a defined benefit pension plan lack constitutional standing to sue the plan fiduciaries for alleged breach of their ERISA fiduciary duties. What was key for the Court’s...
With CARES Act, Congress provides retirement plan relief and group health plan changes
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020, includes a number of provisions that affect retirement plan sponsors and participants. These provisions are designed to provide relief to participants and employers facing financial difficulty as a result of the coronavirus pandemic...
High-deductible health plans can cover coronavirus costs
Recognizing the need to eliminate potential administrative and financial barriers to testing for and treatment of the 2019 Novel Coronavirus (COVID-19), in Notice 2020-15 , posted today on IRS.gov, the IRS advised that high-deductible health plans (HDHPs) can pay for COVID-19-related testing and treatment, without jeopardizing their status. This...
SECURE Act: Change to RMD Trigger Age Should Trigger Your Attention Now
As summarized in our January 7 Client Advisory , the SECURE Act includes many changes that affect the design and administration of retirement plans. One of those changes is the increase to the trigger age for required minimum distributions (“RMDs”) from age 70½ to age 72. The change is...
What You Need to Know About the SECURE Act
The Setting Every Community Up for Retirement Enhancement Act of 2019 (the “SECURE Act”) is the most far reaching new law affecting retirement benefits in more than a decade. Due to its importance, we have developed a client advisory highlighting key aspects of the SECURE Act that affect the...
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...
Final Regulations on 401(k) Hardship Withdrawals
In September, the Treasury Department issued final regulations governing hardship withdrawals from 401(k) plans. The final regulations update the existing 2004 regulations to reflect recent statutory changes made to the hardship withdrawal rules under Section 401(k) of the Internal Revenue Code (“Code”), including: permitting the withdrawal of earnings on...
Who is a Highly Compensated Employee?
Identifying an employer's highly compensated employees is crucial to the administration of qualified retirement plans, as well as 403(b) plans that provide employer contributions. This post provides an overview of the rules for determining who is a highly compensated employee. The dollar amount used in this post is the...
Recap of Change to Retirement Plan Rollover Rules for Plan Loan Offsets
The Tax Cuts and Jobs Act of 2017 ("2017 Tax Act") includes a provision that changed the rollover rules for certain plan loan offset distributions and that may not be well known to retirement plan sponsors and participants. Money purchase, profit sharing, 401(k) and 403(b) plans may make loans...
Proposed Regulations on 401(k) Hardship Withdrawals
Last month, the Treasury Department issued highly anticipated proposed regulations governing hardship withdrawals from 401(k) plans. The proposed regulations address recent statutory changes made to the hardship withdrawal rules under Code Section 401(k), including: permitting the withdrawal of earnings on elective deferrals in the event of a hardship; permitting...
401(k) Plan Sponsors – Time to Revisit Your Hardship Withdrawal Provisions
The Bipartisan Budget Act of 2018 ("Budget Act") includes several changes to the rules governing hardship withdrawals from 401(k) plans. Because the changes apply to plan years beginning after December 31, 2018, 401(k) plan sponsors should start considering their options now and make decisions regarding which changes, if any...
Lisa S. Boehm Named Employee Benefits Lawyer of the Year
Lisa S. Boehm , a Partner in Verrill Dana's Employee Benefits and Executive Compensation Group , has been named 2018 Portland, Maine Employee Benefits (ERISA) Law "Lawyer of the Year" by Best Lawyers® . This is the second time that Ms. Boehm has been named "Lawyer of the Year,"...
