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By Anne Tyler Hall and Keely Collins, Hall Benefits Law  On August 6, 2020, the IRS released Notice 2020-62 (the “IRS Notice”) providing updated safe harbor explanations for rollover distributions ( “402(f) Notices”) to accommodate changes made under the Setting Every Community Up for Retirement Enhancement Act of 2019 (the “SECURE Act”). Specifically, the new 402(f) Notices – one for distributions from a non- designated Roth account and one for distributions from a designated Roth…
The COVID-19 pandemic has brought about a staggering number of changes for employers in the past few months, requiring them to make significant changes to workplace processes and policies virtually on the fly. In this environment, it’s important to review employee benefits plans to ensure these changes have not triggered any adverse consequences. Employers are encouraged to review their actions related to benefits plans during the COVID-19 crisis for these potential areas of concern: Did…
Employers that sponsor nonqualified deferred compensation plans are no doubt aware of the strict requirements in providing these plans. Failure to adhere to these requirements can lead to penalties as well as tax consequences for both the employer and the participating employee. In light of the unprecedented business and market conditions as well as employee needs that have arisen as the result of the COVID-19 pandemic, employers would be wise to consider any actions taken…
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) suspended required minimum distributions (RMDs) from certain retirement accounts for 2020. This waiver applies to any retirement account subject to RMDs, including 401(k)s, 403(b)s, 457(b)s, traditional IRAs, and IRA-based plans such as SEPs, SARSEPs, and SIMPLE IRAs. Here are some of the rules you need to know regarding RMD waivers under the CARES Act: 2019 RMDs:  An individual taking his or her first RMD in…
To comply with ERISA, retirement plan fiduciaries are required to act with “care, skill, prudence and diligence under the circumstances then prevailing.” The COVID-19 pandemic certainly presents a unique set of circumstances, with a stock market downturn not seen in 12 years, mass layoffs and furloughs, business closings, and a dramatic shift in how work gets done. Retirement plan fiduciaries are undoubtedly concerned about the effect of all the changes brought about by the pandemic…
Thanks to a provision in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), employers may allow their employees to access their retirement savings to help them cope with the financial impact of the COVID-19 pandemic. Employee benefits law has changed significantly, even if temporarily, under the CARES Act. Employees may now take a coronavirus-related distribution (CRD) from a defined contribution retirement plan –IRA, 403(b), 457(b) or 401(k) – between January 1 and December…
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides numerous methods by which employers can expand existing programs or create new ones for the benefit of their employees. One such program, the Code Section 127 educational assistance program, now includes the ability for employers to pay up to $5,250 in 2020 toward an employee’s student loan debt. Educational Assistance Program Overview Under Section 127 of the Internal Revenue Code, employers may pay an…
When disasters like the COVID-19 pandemic strike, companies look for ways to help employees make it through the crisis. One of the ways employers can help employees who are experiencing financial hardship due to COVID-19 quarantine or stay-at-home orders is by making qualified disaster relief payments that are tax-free under Internal Revenue Code Section 139. Qualified disaster relief payments are not included as part of an employee’s income and are deductible by his or her…
By Anne Tyler Hall and Eric Schillinger, Hall Benefits Law The COVID-19 pandemic has significantly impacted all aspects of the U.S economy and the business operations of small and large employers alike. To mitigate the harm from the pandemic to employers, the government has enacted major legislation and issued numerous guidance in the past few months pertaining to COVID-19, including rules that address various aspects of employee benefits. This article provides a high-level overview of…
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) includes provisions that allow retirement plan sponsors to provide plan participants the opportunity to withdraw funds from a defined contribution retirement plan — IRA, 403(b), 457(b) or 401(k) — if they are facing adverse financial consequences due to the COVID-19 pandemic. Withdrawal Qualifications The CARES Act allows for withdrawals of up to $100,000 from defined contribution retirement plans with the following tax benefits: 10% tax…