Voluntary Fiduciary Correction Program (VFCP) – Questions and Answers

Q: What is the VFCP? A: The VFCP, offered through the Department of Labor (DOL)’s Employee Benefits Security Administration (EBSA), is a way to voluntarily correct certain fiduciary breaches (or potential breaches). Only specific types of fiduciary breaches are eligible for relief on the VFCP all of which deal with transactions that raise valuation issues and/or prohibited transaction issues under Title I of Read More

COVID-19 Considerations for Nonqualified DC Plans

Employers that sponsor nonqualified deferred compensation plans are no doubt aware of the strict requirements in providing these plans. Failure to adhere to these requirements can lead to penalties as well as tax consequences for both the employer and the participating employee. In light of the unprecedented business and market conditions as well as employee needs that have arisen as the result of the COVID-19 Read More

Navigating RMD Waivers under the CARES Act

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) suspended required minimum distributions (RMDs) from certain retirement accounts for 2020. This waiver applies to any retirement account subject to RMDs, including 401(k)s, 403(b)s, 457(b)s, traditional IRAs, and IRA-based plans such as SEPs, SARSEPs, and SIMPLE IRAs. Here are some of the rules you need to know regarding RMD waivers under the CARES Read More

Retirement Plan Fiduciary Considerations in Context of COVID-19

To comply with ERISA, retirement plan fiduciaries are required to act with “care, skill, prudence and diligence under the circumstances then prevailing.” The COVID-19 pandemic certainly presents a unique set of circumstances, with a stock market downturn not seen in 12 years, mass layoffs and furloughs, business closings, and a dramatic shift in how work gets done. Retirement plan fiduciaries are undoubtedly Read More

Reporting Coronavirus-Related Distributions and Repayments

Thanks to a provision in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), employers may allow their employees to access their retirement savings to help them cope with the financial impact of the COVID-19 pandemic. Employee benefits law has changed significantly, even if temporarily, under the CARES Act. Employees may now take a coronavirus-related distribution (CRD) from a defined contribution Read More

CARES Act Expands Employer-Paid Student Loan Debt Repayment

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides numerous methods by which employers can expand existing programs or create new ones for the benefit of their employees. One such program, the Code Section 127 educational assistance program, now includes the ability for employers to pay up to $5,250 in 2020 toward an employee’s student loan debt. Educational Assistance Program Read More

Code Section 139 Qualified Disaster Relief Payments: Tax-Free Boon for Employees Facing Coronavirus-Related Financial Hardship

When disasters like the COVID-19 pandemic strike, companies look for ways to help employees make it through the crisis. One of the ways employers can help employees who are experiencing financial hardship due to COVID-19 quarantine or stay-at-home orders is by making qualified disaster relief payments that are tax-free under Internal Revenue Code Section 139. Qualified disaster relief payments are not included as Read More

Employer Resource: Overview of COVID-19 Legislation and Guidance Related to Health and Welfare Benefits

By Anne Tyler Hall and Eric Schillinger, Hall Benefits Law The COVID-19 pandemic has significantly impacted all aspects of the U.S economy and the business operations of small and large employers alike. To mitigate the harm from the pandemic to employers, the government has enacted major legislation and issued numerous guidance in the past few months pertaining to COVID-19, including rules that address various Read More

Supreme Court Rules in Favor of Health Insurers in $12B ACA Risk Corridor Case

On April 27, 2020, the U.S. Supreme Court ruled in Maine Community Health Options v. United States that health insurance companies that lost money on policies offered on the health benefit exchanges created by the Affordable Care Act (ACA) were entitled to recoup those losses from the government. Background Congress created “risk corridors” as part of the ACA to help health insurance companies balance the risk of Read More

CARES Act Expansion of In-Service Withdrawals Highlights 403(b) Plan Surrender Charge Disparity

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) includes provisions that allow retirement plan sponsors to provide plan participants the opportunity to withdraw funds from a defined contribution retirement plan -- IRA, 403(b), 457(b) or 401(k) -- if they are facing adverse financial consequences due to the COVID-19 pandemic. Withdrawal Qualifications The CARES Act allows for withdrawals of up to Read More