John Rich

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The Internal Revenue Service announced last week that it was piloting a pre-examination retirement plan compliance program beginning this month. This program involves the IRS notifying an employer by letter in advance that the employer’s retirement plan was selected for an upcoming examination.

The letter gives the employer a 90-day window to review its retirement plan’s document and operations to determine if they meet all current tax law requirements. If the employer does not respond within 90 days, the IRS will contact the employer to schedule an examination.Continue Reading IRS Announces New Retirement Plan Pre-Examination Program

On January 6, 2022, the Tax Exempt and Government Entities (“TEGE”) division of the Internal Revenue Service released its Fiscal Year 2021 Accomplishments Letter (the “Letter”). Among other responsibilities, TEGE through its Employee Plans division has jurisdiction over tax issues involving retirement plans.  The United States Department of Labor shares jurisdiction and focuses on enforcement of the ERISA, the other primary law impacting benefit plans.  As the name suggests, the Letter described the accomplishments and results of various IRS compliance initiatives during the period October 1, 2020 to September 30, 2021.
Continue Reading IRS 2021 Accomplishments Letter Shows Retirement Plan Audit Activity Continues

On April 7th, the United States Department of Labor issued detailed guidance and model notices to assist employers in implementing the COBRA premium assistance requirement under Section 9501 of the American Rescue Plan Act of 2021 (the ARP).

The ARP requires employers to provide a 100 percent COBRA premium subsidy – between April 1, 2021 and Sept. 30, 2021 – for employees whose reduction in hours or involuntary termination of employment makes them eligible for COBRA continuation coverage during this period. An employer or plan to whom COBRA premiums are payable, advances the COBRA premium and is then entitled to a tax credit for the amount of the premium assistance provided.Continue Reading American Rescue Plan Act of 2021 Requires Employers to Pay Employee COBRA Premiums Until September 30, 2021

The COVID-Related Tax Relief Act of 2020 and the Taxpayer Certainty and Disaster Tax Relief Act of 2020, both part of the Consolidated Appropriations Act, 2021, (collectively the “Stimulus Bill”) contain numerous provisions related to employer sponsored benefit plans. Below are some of the key provisions relating to welfare plans, retirement plans and other employer provided benefits.
Continue Reading Benefit Plan Provisions in the Stimulus Bill

Last week, the U.S. Supreme Court ruled against Intel Corporation in, Intel Corporation Investment Policy Committee v. Sulyma, a case with potentially far reaching implications to employers who maintain Section 401(k) retirement plans.

The case involved a class action lawsuit brought by an Intel employee who claimed that Intel, Intel committees and individuals administering two Intel retirement plans had breached their fiduciary duties under ERISA, the federal law that governs such plans, by offering two investment funds that were imprudently overinvested in “alternative investments” such as hedge funds and private equity and failed to disclose relevant facts about those allocations to plan participants.  This is but one of many similar class action ERISA lawsuits brought against large employers, universities and colleges.  The Supreme Court decision focused on the time a plaintiff has to bring such a claim.  ERISA Section 413 allows a plaintiff as long as six years to file suit following an alleged ERISA breach or violation.  However, if a plaintiff has “actual knowledge” of a breach or violation, that period is reduced to three years.Continue Reading United States Supreme Court Rules in ERISA Fiduciary Case

Last week Congress passed the Setting Every Community Up for Retirement Enhancement (SECURE) Act as part of the legislative package of spending bills. President Trump signed the legislation on Friday to implement the first major retirement plan legislation since the Pension Protection Act of 2006. As often occurs with major Tax legislation, employers will need to quickly review the legislation as some of the provisions are effective as early as January 1, 2020.  The following are some of the important provisions in the 119 pages of legislation.
Continue Reading Congress Passes SECURE Act Making Major Changes to Retirement Plans

In a long awaited decision reversing 26 years of existing precedent, on June 21st the United States Supreme Court ruled in South Dakota  v. Wayfair, Inc., that states and other taxing jurisdictions could require out of state retailers to collect sales tax on online sales even though the retailers had no physical presence in the taxing jurisdiction.
Continue Reading United States Supreme Court Declares Open Tax Season on On-line Retailers

Last month, the United States Supreme Court ruled unanimously in Tibble v. Edison International that retirement plan fiduciaries have an ongoing duty to monitor plan investments.  The ruling came in a case involving challenges to plan investment decisions made more than six years before suit was filed. The lower courts had ruled some claims were…