Reporting Developments Affecting Employee Benefits and Executive Compensation

New ERISA Case Results in Another Assignment for Today – Ensure your Group Health Plan’s Claims Administrator is Raising Anti-Assignment during the Claims and Appeals Process!

Anti-assignment clauses in ERISA health plans are useful to plan sponsors in fending off lawsuits by out-of-network providers. Federal courts have consistently upheld anti-assignment provisions contained in the plan document and/or the summary plan description (SPD); however, a recent ERISA case serves as a warning about the unintentional waiver of anti-assignment provisions.

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Helpful New Guidance on Locating Missing and Nonresponsive Retirement Plan Participants

Retirement plans of all sizes often find themselves faced with participants or beneficiaries who are either missing or do not respond to communication. The U.S. Department of Labor (“DOL”) has long been concerned with how plans try to locate and contact these ‘missing’ participants and, more importantly, how they try to prevent participants from becoming ‘missing’ in the first place.

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Section 162(m) Final Regulations

On December 18, 2020, the Internal Revenue Service (IRS) released final regulations (the “Final ‎Regulations”) under Section 162(m) of the Internal Revenue Code, as amended by the Tax Cuts and ‎Jobs Act of 2017 (“TCJA”). Section 162(m) generally limits the deductibility of compensation paid in ‎any tax year to “covered employees” of a publicly held corporation to $1 million. ‎

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IRS Announces 2021 Retirement Plan Limits – Most Limits Remain Unchanged

The Internal Revenue Service announced the 2021 cost-of-living adjustments to the dollar ‎limitations for qualified retirement plans and other benefits, and the Social Security ‎Administration announced its own cost-of-living adjustments for 2021. Most of the dollar limits, ‎including the elective deferral contribution limit for 401(k), 403(b) and 457(b) plans and the ‎dollar limit for catch-up contributions (if age 50 or older), will remain unchanged from 2020 ‎limits.‎

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Has Your Retirement Plan Experienced a Partial Plan Termination?

The economic uncertainty of the COVID-19 pandemic has forced many employers to furlough or layoff a significant percentage of their workforce.  These workforce reductions may inadvertently cause a “partial termination” of the employer’s qualified retirement plan triggering a requirement that all affected participants become 100% vested in their plan accounts.

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Locke Lord QuickStudy: Initial Thoughts Regarding the IRS’ Employee Payroll Tax Deferral Guidance in IRS Notice 2020-65

On August 8, 2020, President Trump issued the Presidential Memorandum on Deferring Payroll ‎Tax Obligations in Light of the Ongoing COVID-19 Disaster (the “Executive Order”). The ‎Executive Order instructed the Treasury Department to provide guidance authorizing employers ‎to defer the collection and deposit of employee payroll tax obligations.

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The New Carried Interest Proposed Regulations, Profits Interests, and Revenue Procedures ‎‎93-27 and 2001-43‎

On July 31, 2020, the Internal Revenue Service and the U.S. Treasury Department issued ‎Proposed Treasury Regulations (the “Proposed Regs”) providing guidance under the ‎‎“carried interest” rules of Section 1061 of the Internal Revenue Code of 1986, as amended ‎‎(the “Code”).  Please see our Quick Study “IRS Issues Carried Interest Guidance” for more detail.‎

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