Reporting Developments Affecting Employee Benefits and Executive Compensation
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.
Read MoreOn 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.
Read MoreOn 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.
Read MoreThe Securing a Strong Retirement Act of 2022 (“SECURE 2.0”) was signed into law by President Joseph Biden on December 29, 2022 as part of the Consolidated Appropriations Act of 2023. SECURE 2.0 expands upon the retirement plan provisions contained in the Setting Every Community Up for Retirement Enhancement Act of 2019 (“SECURE Act”).
Read MoreIn 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.
Read MoreThe SEC adopted long-awaited final rules that require the recovery of erroneously awarded incentive-based compensation of executive officers, as required by the Dodd-Frank Act. Under Rule 10D-1, each exchange must adopt listing standards that will apply to all listed issuers, with limited exceptions.
Read MoreThe Internal Revenue Service announced the 2023 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 2023. All 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), the maximum annual contribution limit under Code Section 415(c) and the dollar limit for catch-up contributions (if age 50 or older) will increase from 2022 limits.
Read MoreOn September 26, 2022, the Internal Revenue Service issued IRS Notice 2022-45, which extends the deadline for amending retirement plans to reflect certain optional and required changes under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and section 302 of Title III of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Relief Act).
Read MoreOn August 3, 2022, the Internal Revenue Service issued IRS Notice 2022-33, which extends the deadline for amending certain plans with the applicable requirements of the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), the Bipartisan American Miners Act of 2019 (Miners Act), and one provision of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
Read MoreIn its June 3, 2022 Employee Plans Newsletter, the IRS announced a pilot pre-examination retirement plan compliance program beginning in June 2022. Under the pilot program, the IRS will notify a qualified plan sponsor by letter that its retirement plan has been selected for an upcoming examination.
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