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Welcome to the Snell & Wilmer Benefits Blog. We will be posting about current employee benefits and executive compensation topics and issues. We invite you to contact the authors with your thoughts or questions.Blog Contributors
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IRS Issues Final Regulations for Hardship Distributions
We previously reported on the Bipartisan Budget Act (the “Budget Act”) hardship distribution rule changes for qualified retirement plans. On September 23, 2019, the IRS issued final regulations implementing certain statutory changes to the hardship distributions rules, including those required by the Budget Act. The final regulations closely track the proposed regulations issued in November 2018. The following are some of the more significant changes implemented by the final regulations:
- Employers must remove the six-month suspension of a participant’s plan contributions following a hardship distribution occurring on or after January 1, 2020.
- Participants may receive a hardship distribution without first requesting a loan from the plan.
Posted in Employee Benefits, Qualified Retirement Plans
| Tagged amendment, bba, Bipartisan Budget Act, distributions, hardship, natural disasters, qualified plan, withdrawals
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To Err is Human – To Forgive is Up to the IRS in Rev Proc 2019-19
The IRS recently issued its latest version of the Employee Plans Compliance Resolution System (“EPCRS”) in Rev. Proc. 2019-19. The EPCRS is the IRS program that assists employers in correcting both operational and document failures with respect to qualified retirement plans. There are several welcome changes to the new EPCRS, including:
- Certain plan loan failures can now be self-corrected:
- If a participant defaults on a loan, the participant can pay a single sum corrective payment equal to the amount (plus interest) that would have paid to the plan absent the failure and re-amortize the outstanding balance either over the remaining payment schedule or over the maximum allowed period.
Posted in Employee Benefits, Qualified Retirement Plans
| Tagged 2019-19, amendment, EPCRS, operational failure, rev proc 2019-19, self-correction
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IRS Issues First Required Amendments List for Qualified Plans
In a previous blog, we discussed the IRS’ elimination of its five year staggered determination letter cycle for individually designed plans. The IRS recently provided guidance to help sponsors of individually designed plans keep their plans in compliance with applicable law. Notice 2016-80 contains the first Required Amendments List (the “RA List”) for individually designed qualified retirement plans. In general, the RA List is a list of changes in the plan qualification requirements for changes that became effective in 2016. The list is divided into two parts—(A) changes in qualification requirements that would generally require an amendment to most plans or to most plans of the type affected by the change and (B) changes that the IRS and Treasury anticipate will not require an amendment in most plans, but might require an amendment due to an unusual provision in a particular plan. Read More ›
Posted in Employee Benefits, Qualified Retirement Plans
| Tagged amendment, defined benefit, determination letter, IRS, Notice 2016-80, RA List, required amendment, treasury
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