Reporting Developments Affecting Employee Benefits and Executive Compensation

First Circuit Holds Affiliated Investment Funds Not Liable For Multiemployer Withdrawal Liability

Private equity fund sponsors can breathe a sigh of relief last week as the First Circuit Court of ‎Appeals, reversing a district court finding, held that two separate private equity funds sharing a ‎general partner (Sun Capital Partners III and Sun Capital Partners IV) were not jointly and ‎severally liable under the Employee Retirement Income Security Act of 1974, as amended ‎‎(ERISA) for the multiemployer pension withdrawal liability of a portfolio company in which ‎both funds invested.‎

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IRS Letters 226-J for 2017 are in the Mail

The IRS has been issuing the 2017 Employer Shared Responsibility Penalty (ESRP) assessments ‎‎(Letter 226-J). The Letter 226-J provides the IRS’ determination of whether an “applicable large ‎employer” may be liable for an ESRP for a particular calendar year and shows the proposed ‎assessment of the penalties based on the Forms 1094-C and 1095-C the employer filed with the ‎IRS, as well as whether or not the employer’s employees received premium tax credits on their ‎individual income tax returns.‎

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Time to Restate Your 403B Plan

The Internal Revenue Service set March 31, 2020 as the last date of the remedial amendment period for tax-exempt organizations and public school systems to self-correct plan document defects in their Section 403(b) plans.  The “remedial amendment period”, or “RAP” is a period during which a 403(b) plan can be amended to comply with the technical requirements of Section 403(b) of the Internal Revenue Code and related IRS regulations. 

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Locke Lord QuickStudy: Tracking Tax Reform: [Un]Intended Consequences For The ACA

Late at night on December 14, 2018, Judge Reed O’Connor of the U.S. District Court for the Northern District of Texas issued his decision in Texas v. U.S., No. 4:18-cv-00167, that the individual mandate under the Affordable Care Act (“ACA”) is unconstitutional due to the removal of the corresponding tax penalty in connection with the passage of the 2017 tax act (which was ultimately named “To provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018” (the “2017 Tax Act”).

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