Reporting Developments Affecting Employee Benefits and Executive Compensation

Governance Issues for Retirement Plan Sponsors Due to “Opt-Out” Amendments

On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act or the “CARES Act”, into law.  We discussed the employee benefit plan provisions included in the CARES Act in our Quick Study published last week, which can be found here.  For sponsors of defined contribution plans, these provisions include: coronavirus-related distributions, which are a new form of distribution, relaxed loan provisions, and suspension of 2020 required minimum distributions (a brief summary of these provisions is provided in the second part of this blog post).

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Employers May Offer Tax-Free Financial Assistance to Employees Affected By Coronavirus under Internal Revenue Code Section 139

On March 13, 2020, President Trump declared a national emergency under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (the “Stafford Act”) in response to the Coronavirus Disease 19, or COVID-19.  This declaration allows employers to make qualified disaster relief payments to employees affected by COVID-19 on a tax-free basis pursuant to Section 139 of the Internal Revenue Code (the “Code”).

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High-deductible Health Plans May Cover COVID-19 (Coronavirus) Costs

To facilitate the nation’s response to the 2019 Novel Coronavirus (COVID-19), also known as the Coronavirus, the Internal Revenue Service advised in IRS Notice 2020-15 that a high-deductible health plan (HDHP), until further notice, is permitted to pay for COVID-19-related testing and treatment, without jeopardizing its status as an HDHP.  Additionally, contributions to an HDHP participant’s health savings account (HSA) will not be adversely affected if the HDHP covering the participant provides for coverage of costs for COVID-19-related testing or treatment‎.

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Feeling Secure in Retirement: Changes Made by the Secure Act that may Affect Qualified Retirement Plans

We are now a few months into 2020 and we should all be feeling more SECURE in our ‎retirement, as a result of the “Setting Every Community Up for Retirement Enhancement Act of ‎‎2019” (“SECURE Act”). Below is a brief summary of the key changes that could impact ‎qualified retirement plans, depending on the terms of those plans and the desires of the plan ‎sponsors from a design perspective.‎

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U.S. Supreme Court Remands “Stock Drop” Case Back to Second Circuit

The United States Supreme Court, in a per curiam decision, declined to address whether plan ‎participants sufficiently alleged breach of fiduciary duty claims under the Employee Retirement ‎Income Security Act of 1974, as amended (“ERISA”) against fiduciaries of an employee stock ‎ownership plan for failing to disclose inside information that ultimately led to a declining stock ‎value, remanding the case to the Court of Appeals for the Second Circuit.‎

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Legislation Proposed to Allow Employers to Make Matching Contributions on Student Loan Repayments

Two bills have been introduced in the Senate that would allow employers to make matching ‎contributions under 401(k), 403(b), governmental 457(b) and SIMPLE plans as if the ‎participant’s student loan payments were salary reduction contributions. On May 13, Senator ‎Ron Wyden (R-OR) reintroduced the Retirement Parity for Student Loans Act (Student Loan ‎Act) and Senators Ben Cardin (D-MD) and Rob Portman (R-OH) reintroduced the Retirement ‎Security & Savings Act.

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What Employers Should Know About the New W-4 Form

‎2020 has brought substantial changes to the Form W-4 (Employee’s Withholding Certificate) ‎compared with previous versions of the form. These changes were made by the IRS to comply ‎with new income tax withholding requirements under the Tax Cuts and Jobs Act (Pub. L. 115-‎‎97). ‎

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