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Are You Computing Your Maximum Participant Loan Amount Correctly (or in the Best Interest of Your Plan Participants)?

In late April 2017, the IRS issued a Memorandum for Employee Plans (EP) Examinations Employees providing two alternatives for computing the maximum participant loan amount when the participant has prior loans. Prior to this Memorandum, the law was not clear concerning how to compute the maximum loan amount where a participant had taken a previous … Continue Reading

Be Wary of Designs to Avoid Employment Taxes through Wellness Plan Benefits

We are aware that employers are being marketed various types of benefit arrangements designed to reduce the employer’s tax obligations by using a combination of wellness programs, voluntary benefits, and cafeteria plans. Not surprisingly, the Internal Revenue Service (IRS) has taken interest in these designs and has provided guidance which may dampen the enthusiasm for … Continue Reading

DOL Continues Investigating Defined Benefit Plans Regarding Procedures for Locating Participants and Paying Benefits at Mandatory Retirement Age

The U.S. Department of Labor (DOL) publicized last year its stepped up enforcement efforts inquiring about procedures used by larger defined benefit plans for locating, and then beginning payment of benefits to, terminated vested participants who have reached the age when the plan mandates benefits must begin. Those audit activities are continuing. For years, the … Continue Reading

401(k) and 403(b) Plan Hardship Distribution Substantiation: What Will the IRS Be Looking For?

On February 23 and March 7, 2017, the Internal Revenue Service (“IRS”) issued memoranda to examination agents addressing review of substantiation provided in support of safe harbor hardship distributions under 401(k) and 403(b) plans. Although the memoranda cannot be relied upon as official guidance, they are good reference points to help plan sponsors and third … Continue Reading

IRS to Process Tax Returns That Lack Certification of ACA-Required Coverage

In the wake of the President’s January 20, 2017 Executive Order directing a reduction in regulatory burdens imposed by the Affordable Care Act (ACA), the IRS has quietly announced that it will continue to process income tax returns lacking confirmation that the taxpayer has maintained ACA-required health coverage. The ACA requires that taxpayers who do … Continue Reading

Church Plan Cases: Federal Agencies Finally Speak

As many of you know, currently pending before the Supreme Court are consolidated cases from the Third, Seventh, and Ninth Circuits holding that, for religiously affiliated employers, employee benefits plans must initially be established by a church for the plans to be exempt from ERISA as “church plans.” The circuit courts issued these holdings when, … Continue Reading
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