Source: https://erisabenefitslaw.com/tag/code-section-409a/
Timestamp: 2020-03-28 15:03:14
Document Index: 773141585

Matched Legal Cases: ['§ 2520', 'art 1', 'art 1', 'art 1', '§ 2520', '§409', '§409', '§457', '§4980', '§4980', '§401', '§403']

Code Section 409A – ERISA Benefits Law
Tag: Code Section 409A
Final Regulations Require Electronic Submission of “Top Hat” Statements
The Department of Labor Employee Benefits Security Administration has published final regulations that revise the procedures for filing “top hat” plan statements under § 2520.104-23 with the Secretary of Labor, to require electronic submission of these statements through EBSA’s website in accordance with instructions published by the Department. The final rule does not change the current content requirements in the regulations . The final rule will be effective August 16, 2019.
Section 110(a) of ERISA permits the Secretary to specify an alternative form of compliance with the reporting and disclosure obligations of Part 1 of Title I for any pension plan or class of pension plans subject to ERISA if certain findings are made. Under the authority of section 110(a), in 1975 the Department issued 29 CFR 2520.104-23 to provide an alternative method of compliance with the reporting and disclosure requirements of Part 1 of Title I for unfunded or insured pension plans established for a select group of management or highly compensated employees (“top hat” plans).
Under the alternative method of compliance, the administrator of a top hat plan satisfies the requirements for the reporting and disclosure provisions of Part 1 of Title I by filing a statement with the Secretary by mail or personal delivery to the address specified in the regulation, and by providing plan documents, if any, to the Secretary upon request. The statement must include the information listed in the regulation.
Originally, top hat statements had to be filed in paper form. On September 30, 2014, the Department published a proposed rule to revise the procedures for filing top hat plan statements under § 2520.104-23 to require electronic submission of these statements. On the same date, the Department also made available a new web based filing system. Use of this web based filing system was voluntary until the adoption of this final rule. Approximately 54% of the top hat plan statements have been filed electronically since then.
Going forward, EBSA’s web based filing system will be the exclusive method for filing these notices and statements; filings by mail or personal delivery will no longer be accepted. Upon submission of a completed filing, the new web based filing system sends an electronic confirmation of receipt to the administrator. This confirmation is not available through the existing paper-based filing system.
Author ErwinPosted on June 14, 2019 June 14, 2019 Categories ERISA, Pension BenefitsTags Code Section 409A, Department of Labor, Non-Qualified Deferred Compensation, Top Hat Plans
Proposed Tax Reform: Ignore The Noise
While I usually do not post about proposed legislation, because it is so speculative, I am going to make an exception in the case of the House Republicans’ proposed Tax Cuts and Jobs Act for several reasons.
The first reason is that, the much-hyped potential reduction to $2,400 in pre-tax deferral limits to 401(k) and 403(b) Plans is not in the actual proposed legislation. In any event, given the popularity of 401(k) Plans, I would rate the chances of this particular proposal ever making it into law at about as close to zero as one could get. My advice is: don’t spend any time worrying about how to deal with it.
The second reason is that there has been virtually no press coverage of the proposed evisceration of non-qualified deferred compensation plans and other employee benefits changes, which are part of the proposed legislation. More on that below, if you are interested.
The third, and bigger point, is that it is way too early to start spending your precious time figuring out how to deal with this this proposed legislation. Recent history tells us that, even with Republican control of all three branches of government, major legislation is very difficult to pass. I can count this year’s major legislative accomplishments on no hands. And even if tax reform legislation does pass, it will likely look quite different from the initial House proposal once it has gone through the House, the Senate and a joint committee. So again, my advice is: don’t spend any time worrying about how to deal with the potential changes in the tax code. You have better things to do with your precious time.
If you are still interested in more details on these proposals you can read the proposed legislation, the House Committee on Ways and Means section-by-section summary, or the short summary below.
Summary of employee benefits tax proposals
The most significant proposal, in my view, is to eliminate the ability to defer taxation of compensation earned and vested in one year into a subsequent year, which is generally governed by Code Sections 409A and 457(b). If enacted, this would essentially eliminate future non-qualified deferred compensation arrangements.
In addition, proposed changes to qualified plans would repeal the special rule permitting recharacterization of Roth IRA contributions as traditional IRA contributions, expand the source accounts from which hardship distributions could be taken, and repeal the six month prohibition on making deferrals after taking a hardship distribution.
Other proposed benefits changes would repeal income exclusions for employee achievement awards, dependent care assistance programs, qualified moving expense re-imbursement, and adoption assistance programs.
Author ErwinPosted on November 3, 2017 November 8, 2017 Categories ERISA, Non Qualified Deferred CompensationTags Code Section 409A, ERISA, IRS, Non-Qualified Deferred Compensation
The IRS has published its 2016–2017 Priority Guidance Plan containing 281 projects that are priorities for allocation of its resources during the twelve-month period from July 2016 to June 2017.
Significant employee benefits issues prioritized for guidance in the next year include:
Additional guidance on the determination letter program, including changes to the pre-approved plan program.
Updates to the Employee Plans Compliance Resolution System (EPCRS) to reflect changes in the determination letter program and to provide additional guidance with regard to corrections.
Final regulations on income inclusion under §409A.
Guidance to update prior §409A guidance on self-correction procedures.
Final regulations under §457(f) on ineligible plans.
Guidance on issues under §4980H (the Employer Mandate).
Regulations under §4980I regarding the excise tax on high cost employer-provided coverage (the Cadillac Tax)
Regulations under §401(a)(9) on the use of lump sum payments to replace lifetime income being received by retirees under defined benefit pension plans.
Guidance regarding substantiation of hardship distributions.
Guidance on the §403(b) remedial amendment period.
Notably absent is any mention of guidance on the nondiscrimination rules applicable to fully-insured medical plans, which were included in the Affordable Care Act. The Treasury Department and the IRS, as well as the Departments of Labor and Health and Human Services (collectively, the Departments), previously determined in Notice 2011-1 that compliance with the nondiscrimination provisions will not be required (and thus, any
sanctions for failure to comply do not apply) until after regulations or other administrative guidance of general applicability has been issued. Therefore, for the foreseeable future fully insured plans can continue to discriminate in favor of highly compensated individuals in ways the self-insured plans cannot under Code Section 105(h).
IRS 2016–2017 Priority Guidance Plan
Author ErwinPosted on August 22, 2016 August 19, 2016 Categories Affordable Care Act, Defined Benefit Plans, Defined Contribution PlansTags ACA, Cadillac Tax, Code Section 409A, Determination letter program, IRS