On January 16, 2021, a Fifth Circuit Court decision in University of Texas M.D. Anderson Cancer Center v. U.S. Department of Health and Human Services vacated a $4.3 million penalty imposed by the Department of Health and Human Services (HHS) against M.D. Anderson for alleged HIPAA violations, finding that the penalty was “arbitrary, capricious, and otherwise unlawful.” Background M.D. Anderson disclosed to HHS Read More
IRS Issues Annual Update on Determination Letters and Private Letter Rulings
In January 2021, the IRS issued Rev. Proc. 2021-4, which includes annual updates to certain procedures including determination letter requests, private letter rulings, and employee plan tax information. Key updates to 2020 procedures are as follows: Form 5310. Form 5310, Application for Determination for a Terminating Plan, must be filed electronically starting August 1, 2021. Form 5310 may also be followed Read More
IRS Releases Final Regulation on Tax-Exempt Organizations Excise Tax
The Tax Cuts and Jobs Act (TCJA) enacted in December 2017 created a 21% excise tax on executive compensation in excess of $1 million paid by tax-exempt organizations to certain employees (IRC Section 4960). On January 19, 2021, the IRS published the final regulations to help applicable tax-exempt organizations (ATEOs) comply with the excise tax on excessive pay under Section 4960. The following summarizes the key Read More
DOL Approves PBGC Missing Participant Program for Defined Contribution Plans
The U.S. Department of Labor (DOL) recently released Field Assistance Bulletin 2021-01 that authorizes, as a matter of enforcement policy, plan fiduciaries of terminating defined contribution plans to use the Pension Benefit Guaranty Corporation (PBGC) missing participant program for missing or nonresponsive participant’s account balances. Following the termination of a defined contribution plan, current DOL Read More
DOL Proffers Guidance on Missing Participants
It’s hard to believe people would leave retirement funds behind when they move to a new job, but it happens. In fact, many people fail to roll over retirement plans when they leave a job and move to a new employer. Plan administrators and sponsors are then faced with a dilemma – and sometimes unclear or evolving guidance from government agencies that oversee employee retirement plans. Now the Department of Labor Read More
DOL Reinstates Five-Part Test for Determination of ERISA Fiduciary Status
On December 18, 2020, the Department of Labor (DOL) published in the Federal Register a final prohibited transaction exemption for investment advice fiduciaries that effectively reinstates the DOL’s “five-part test” as set forth in its 1975 regulation defining investment advice fiduciaries under the Code and ERISA. For advice to constitute “fiduciary investment advice” under the five-part test, a financial Read More
Consolidated Appropriations Act Adds Mental Health Parity Compliance Requirement for Group Health Plans
Section 203 of the Consolidated Appropriations Act (CAA), which became law on December 27, 2020, requires group health plans to evaluate compliance with the existing rules governing nonquantitative treatment limitations (NQTLs) under the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). The MHPAEA requires group health plans that apply NQTLs to mental health or substance use disorder (MH/SUD) benefits Read More
Policies & Procedures: The Key to Avoiding Retirement Plan Excessive Fee Litigation
The recent increase in litigation over retirement plans and, specifically, the fees those plans are being charged for administration and management, has many companies concerned about what they need to do to protect the plans they manage. Two recent federal district court rulings illustrate the necessity for plan sponsors to have a prudent decision-making process in place to successfully defend against excessive fee Read More
Biden Issues Executive Order to Progress Toward $15 Per Hour Minimum Wage for Federal Workers
On January 22, 2021, President Biden issued an Executive Order on Protecting the Federal Workforce that instructed the Director of the Office of Personnel Management (OPM) to provide him with a report “with recommendations to promote a $15/hour minimum wage for Federal employees.” In addition to raising the federal minimum wage, the Executive Order overturned three of the previous administration’s executive orders Read More
