by Lyn Domenick
The IRS has announced the 2025 cost of living adjustments to qualified plan limits. Below are the highlights, and our full historical chart can be found here for easy reference. Read more
Congratulations! You made it to summer, that wonderful time of year when things at work (hopefully) slow down a bit and you’re able to take some well-deserved time off. Though before you Go-Go(‘s) (do you see what I did there?), be sure your July employee benefits compliance deadlines are covered.
July 29 – Summary of Material Modifications (SMM) – Were any of your organization’s plans materially amended last year? If so, you may be required to furnish an SMM to participants (or a revised summary plan description). Those SMMs must be provided no later than 210 days after the end of the plan year in which the change was adopted. So, for a 2023 change, the SMM deadline would fall on July 29 (you get an extra day this year because 210 days falls on July 28, a weekend). Read more
by Lyn Domenick
As the late, great B.B. King would sing, never make your move too soon. That’s often a smart approach in life. But when it comes to employee benefits communications, that might not be the right advice. The recent legislation known as SECURE 2.0 has a delayed deadline for retirement plan amendments. Generally, for a calendar year retirement plan, the SECURE 2.0 amendment deadline is December 31, 2026; collectively bargained plans have until December 31, 2028, and governmental plans have until December 31, 2029. However, many of the relevant SECURE 2.0 provisions may already be in effect now—or will be very soon—in your plan. What are the plan sponsor’s obligations regarding communicating the SECURE 2.0 changes to employees?
In general, a plan sponsor must either update its Summary Plan Description (SPD) or issue a Summary of Material Modifications (SMM) to employees by no later than 210 days following the end of the plan year in which a retirement plan change is adopted. For a calendar year plan, that is typically July 29th following the plan year of the change (July 28th this year due to leap year). For example, if you made any plan amendments in 2023, you should issue an updated SPD or SMM by July 28, 2024. Read more
By Kevin Selzer
Owners of closely held businesses, particularly first-generation owners, often have a difficult time finding a suitable succession plan. These owners are faced not only with phasing out of their labor of love, but choosing a new direction for the thing they created. That new direction often starts by looking at third party investors and buyers, which may consist of competitors or private equity. If the owners find the third-party market undesirable, they may seek out alternatives. Our blog post today looks at three “internal” succession alternatives that owners may want to consider, particularly those that are driven by a desire to preserve legacy and/or protect the workforce, including existing management. Read more
by Brenda Berg
“Missing participants” have long been a thorn in the side of plan sponsors and administrators, as they are owed a retirement benefit, but are unable to be found or unresponsive to plan communications. As a partial solution, Congress directed the DOL in the SECURE 2.0 Act of 2022 to create a “Retirement Savings Lost and Found”—an online searchable database that would connect missing participants with their retirement benefits—by December 29, 2024. The DOL had contemplated populating the database with information from Form 8955-SSA, which plans already submit to the IRS. However, the IRS has refused to provide the information to the DOL, citing privacy concerns regarding confidential tax information. This has caused the DOL to look to sponsors of ERISA plans to voluntarily provide participant information to populate the database. While this may be a good idea in principle, it creates many obstacles. Read more
by Lyn Domenick
The IRS has announced the 2024 cost of living adjustments to qualified plan limits. Below are the highlights, and our full historical chart can be found here for easy reference. Read more
It may be an understatement to say that compliance with benefit plan laws and regulations is becoming increasingly more complicated. In my experience, the COVID era has brought about some of the widest-sweeping changes on the burden of administering benefit plans in some time.
There has been major evolution around service provider fee disclosure, DOL reporting and disclosure on mental health parity and disclosure of plan costs, new claims procedure rights, expanded expectations around Cyber Security protections, and expansion of the use of ESG and crypto currency (and on-again, off-again regulatory efforts). Read more
by Alex Smith
While case law regarding the enforceability of arbitration provisions in ERISA retirement plans has been mixed, since the Ninth Circuit’s 2019 decision in Dorman v. Charles Schwab Corp. enforcing a 401(k) plan’s arbitration provision, some employers and plan sponsors have given increased consideration to adding arbitration provisions to their retirement plans based on that decision and the proliferation of class action ERISA lawsuits. However, following the Tenth Circuit’s February 9 decision in Harrison v. Envision Management Holding, Inc. Board, which appears to be the first time the Tenth Circuit considered the issue, employers based in the Tenth Circuit’s jurisdiction (Colorado, Kansas, New Mexico, Oklahoma, Utah and Wyoming) may want to think twice before adding an arbitration provision to their plans.
During the pandemic, the IRS on multiple occasions provided relief from the requirement that a person be physically present for certain paperwork associated with retirement plan distributions. (See our blog posts of June 4, 2020 and January 25, 2021, and also IRS Notices 2020-42, 2021-3, 2021-40 and 2022-27.) Apparently acknowledging that the new remote procedures are sufficiently reliable, the IRS is proposing to make them permanent. Read more
by Lyn Domenick
The IRS has announced the 2023 cost of living adjustments to qualified plan limits. As expected, many of the limits increased substantially compared with prior years. Below are the highlights, and our full historical chart can be found here for easy reference.
| 2023 | 2022 | 2021 | |
| Annual Compensation | 330,000 | 305,000 | 290,000 |
| Elective Deferrals | 22,500 | 20,500 | 19,500 |
| Catch-up Contributions | 7,500 | 6,500 | 6,500 |
| Defined Contribution Limit | 66,000 | 61,000 | 58,000 |
| ESOP Distribution Limits | 1,330,000 265,000 |
1,230,000 245,000 |
1,165,000 230,000 |
| Defined Benefit Limit | 265,000 | 245,000 | 230,000 |
| HCE Threshold | 150,000 | 135,000 | 130,000 |
| Key Employee | 215,000 | 200,000 | 185,000 |
| 457 Elective Deferrals | 22,500 | 20,500 | 19,500 |
| Taxable Wage Base | 160,200 | 147,000 | 142,800 |