Reporting Developments Affecting Employee Benefits and Executive Compensation

Final Rule Issued by OCR and CMS for Nondiscrimination Protections Under Section 1557 of ‎the ACA

The U.S. Department of Health and Human Services (“HHS”) Office for Civil Rights (“OCR”) and the Centers for Medicare & Medicaid Services (“CMS”) issued a final rule on April 26, 2024 (the “Final Rule”) under Section 1557 of the Affordable Care Act (“ACA”) after reviewing more than 85,000 comments from the public following the Proposed Rule.

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The DOL’s Final Investment Advice Fiduciary Rule Is Here

In its latest attempt in a fourteen-year old quest to update the circa-1975 definition of a fiduciary who renders “investment advice for a fee or other compensation, direct or indirect” (an “investment advice fiduciary”) under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), on April 25, 2024, the U.S. Department of Labor (the “Department”) released final regulations (the “Final Rule”) defining an investment advice fiduciary, as well as amendments to several prohibited transaction class exemptions (“PTE”).  This post summarizes the key provisions of the Final Rule and the amendments to the PTEs.

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IRS Issues Guidance on Secure 2.0 – What Plan Sponsors Need to Know

In late December 2023, approximately one year after Congress enacted the Setting Every Community Up for Retirement Enhancement Act of 2022 (“SECURE 2.0”), the Internal Revenue Service (the “IRS”) released Notice 2024-2 (the “Notice”) providing much needed guidance, in the form of questions and answers, on 12 of the 90 new provisions added by SECURE 2.0.

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IRS Announces 2024 Retirement Plan Limits: Modest Increases

The Internal Revenue Service announced the 2024 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 2024. Most of the dollar ‎limits, including the elective deferral contribution limit for 401(k), 403(b) and 457(b) plans, the ‎annual compensation limit under 401(a)(17) and the maximum annual contribution limit under ‎Code Section 415(c) will increase from 2023 limits. The dollar limit for catch-up contributions ‎‎(if age 50 or older) remains the same as the 2023 limit.‎

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SECURE 2.0: Two-Year Transition Relief Announced for Roth Catch-Up Contributions

Long-awaited guidance was received from the IRS on Friday related to the SECURE 2.0 ‎requirement that catch-up contributions for high-income participants in 401(k), 403(b), and ‎governmental 457(b) plans be made as Roth contributions. Notice 2023-62 provides for a 2-year ‎administrative transition period that will be welcome relief to retirement plan sponsors and ‎record keepers alike.

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IRS Proposes Regulations on Using Forfeitures in Qualified Retirement Plans

On February 27, 2023, the Department of the Treasury (“Treasury”) and Internal Revenue Service (“IRS”) issued proposed regulations (the “Proposed Regulations”) relating to forfeitures in tax-qualified defined benefit and defined contribution plans. Forfeitures generally arise when a participant terminates employment before completing the required service for full vesting of employer contributions under the terms of the plan.

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A Tale of Two Remedies: Preparing Employee Benefits Plans for the Sunset of Covid-19 ‎Relief

On January 30, 2023, the Biden Administration announced that both the COVID-19 National ‎Emergency and the Public Health Emergency (collectively, the “Emergency Declarations”) ‎would end on May 11, 2023, sunsetting nearly three years of extended deadlines and certain ‎mandates related to COVID-19 testing and vaccines applicable to employer-sponsored benefit ‎plans.‎

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IRS Expands Determination Letter Program to Include Individually-Designed 403(b) Plans

In Revenue Procedure 2022-40, the IRS recently expanded the determination letter program to allow applications by individually-designed 403(b) plans. This expansion will allow 403(b) plan sponsors to request a determination letter that expresses the IRS’ opinion that the plan’s terms (as stated in the plan document) meet the requirements under Section 403(b) of the Internal Revenue Code and other qualification requirements.

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