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Plan Administration

DOL Issues Cybersecurity Guidance

On April 14, 2021, the Department of Labor’s Employee Benefits Security Administration (“EBSA”) issued cybersecurity guidance for retirement plan fiduciaries and service providers, as well as plan participants.  In the guidance, the EBSA states that ERISA fiduciaries are required to take appropriate steps to mitigate internal and external cybersecurity threats to plan participants and retirement plan assets.   To assist fiduciaries  and service providers in fulfilling this obligation, the EBSA issued two documents that describe cybersecurity best practices – Cybersecurity Program Best Practices and Tips for Hiring a Service Provider.  The EBSA also issued some basic rules – Online Security Tips – to help participants reduce the risk of fraud and loss to their retirement accounts.

COBRA Changes Under the American Rescue Plan Act of 2021

On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (“ARPA” or “the Act”) into law.  Among the Act’s many provisions is a temporary subsidy for COBRA coverage that will undoubtedly be a significant benefit for individuals who lost health coverage during the pandemic, but which is just as certain to be a tremendous administrative burden for employers and group health plans.

Plan Administration – A SECURE and CARES Act Reminder

The SECURE and CARES Acts provide a broad spectrum of required and optional changes that employers must evaluate with respect to retirement plan administration.  One impending change is the SECURE Act’s broader eligibility requirement for part-time employees in 401(k) plans, which becomes effective on January 1, 2021.  In addition, employers may be surprised to learn that some CARES Act distribution options were added to their plans automatically by their record keepers through a “default” process.   Thus, employers should review their plan’s administrative procedures to determine if (and how) changes under the SECURE Act and CARES Act were (and are being) implemented to ensure administrative compliance with the plan document.

 

DOL Disaster Relief Notice Extends Deadlines, Enables COBRA Gamesmanship

The Department of Labor’s Employee Benefits Security Administration issued guidance on April 28, 2020, providing temporary, coronavirus-related relief from many deadlines and requirements under ERISA.  Notably, the guidance relaxes the standards for employers to provide notices electronically, and affords significant latitude to COBRA qualified beneficiaries for electing, and paying for, COBRA continuation coverage.

Employee Benefits in the Age of COVID-19: Brief Answers to Some Common Health Plan Questions

As we are all now intimately aware, the coronavirus pandemic has changed the nature of the workplace, and all of the benefits, rights, and responsibilities arising out of employment.  We are operating under a new set of rules, and those rules are changing daily.  Employers’ efforts to manage their workforce in order to maintain fiscal viability while protecting the health of employees also affect benefits.  The cascading effect of these factors raises many thorny benefits questions.  We will summarize – and attempt to answer – a few of those questions here (based on the legal landscape as of March 31, 2020).

“CARES” Act and Defined Benefit Plans

The CARES Act signed by President Trump on March 27, 2020, includes relief for defined contribution plans, but defined benefit plans also received some relief.  In addition, the IRS issued guidance that includes an extension for employers to adopt a pre-approved defined benefit plan.  And, employers should remember their option to decrease the age at which employees may request an in-service withdrawal from defined benefit plans.

“CARES” Act Requires Immediate Decisions by Retirement Plan Sponsors

A third round of relief from the coronavirus pandemic has made its way through the Senate and House and has been signed by President Trump. The Coronavirus Aid, Relief and Economic Security (or “CARES”) Act provides over $2 trillion in relief for businesses and individuals. It also offers new avenues for defined contribution retirement plan participants to withdraw funds from their accounts in order to pay COVID-19-related expenses, if their employer elects to open those avenues. Some of the largest 401(k) and 403(b) plan record keepers are forcing employers to make that choice on just a few days’ notice.

SECURE ACT – Defined Benefit Plans

The Setting Every Community Up for Retirement Enhancement Act of 2019 (the “SECURE” Act) has broad implications for retirement plans.   Although the Act’s primary focus is on defined contribution plans, several provisions of the Act and its sister legislation apply only to defined benefit plans.

This is the fourth in a series of articles describing key provisions of the legislation.  Our focus in this article is on the provisions applicable to defined benefit plans – in-service withdrawals, required minimum distributions, and nondiscrimination testing relief.

SECURE Act – Broad Implications for Retirement Plans

On December 20, 2019, President Trump signed into law the Further Consolidated Appropriations Act, 2020, which includes the Setting Every Community Up for Retirement Enhancement Act (the “SECURE” Act). The SECURE Act amounts to the most significant retirement legislation in more than a decade.  Our focus in this article is on the legislation’s effect on retirement plans generally, including provisions broadly applicable to defined contribution, defined benefit, 401(k), 403(b), and certain 457(b) plans.

SECURE Act Generates Changes and Opportunities for Retirement Plans

In the waning days of 2019, President Trump signed into law the most significant retirement legislation in more than a decade.  The Setting Every Community Up for Retirement Enhancement – or “SECURE” – Act includes far-reaching changes that affect qualified retirement plans, 403(b) and 457(b) plans, IRAs, and other employee benefits.  In a series of articles, we will describe key provisions of the Act.  Our first article provides an overview of the Act’s key provisions and their effective dates.  Some of the changes under the SECURE Act are effective immediately, while others are effective for plan or tax years beginning on or after January 1, 2020.  Although the Act generally provides sufficient time to amend plan documents, employers must modify certain aspects of plan administration (and potentially financial planning decisions) now to align with the SECURE Act’s more immediate requirements.

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