On November 30, 2006, the Internal Revenue Service (the “IRS”) issued Notice 2006–107 in response to the divestiture requirements of the Pension Protection Act of 2006 (“PPA”). Section 401(a)(35) of the Internal Revenue Code and the parallel provision in Section 204(j) of ERISA were added by Section 901 of the PPA, to provide divestiture rights […]
Author: Trucker Huss
On November 30, 2006, the IRS issued Notice 2006–100 (the “Notice”). The Notice provides guidance related to reporting and wage withholding requirements for non-qualified deferred compensation arrangements under Section 409A of the Internal Revenue Code (the “Code”). The reporting and wage withholding requirements are for calendar years 2005 and 2006 and apply to deferred compensation […]
Pension Protection Act Changes The Pension Protection Act (“PPA”), passed this August, institutes requirements for a number of new notices and disclosures from plan sponsors and administrators. Some of these changes will merely call for the delivery of already existing information, while others will require additional information to be compiled and distributed. Some of the […]
The recently enacted Pension Protection Act of 2006 (“PPA”) provides important new provisions clarifying the legality of cash balance plans and certain other types of “hybrid” retirement plans. In addition, the U.S. Court of Appeals for the Seventh Circuit issued a recent decision holding that IBM’s cash balance plan — and the cash balance formula […]
The Internal Revenue Service has announced the annual cost-of-living adjustments applicable to dollar limitations for pension plans and other items for Tax Year 2007. The increase in the cost-of-living index met the statutory thresholds that trigger adjustment for most pension plan limitations. Some of the cost-ofliving adjustments are based on increased limits enacted by the […]
In August, the Securities and Exchange Commission (“SEC”) issued final rules relating to disclosure requirements for executive compensation. The rules apply to disclosure in proxy statements and other filings required by the Securities Exchange Act of 1934. In addition to extensive disclosure, the new rules require that a single total compensation figure be provided for […]
On September 27, 2006, the Department of Labor (“DOL”) issued proposed regulations implementing provisions of the recently enacted Pension Protection Act of 2006 (“PPA”) relating to default investment of plan assets in individual account plans (e.g., Internal Revenue Code section 401(k) plans). The proposed rules shield fiduciaries of individual account plans from liability for automatic […]
On August 8, 2006, the Internal Revenue Service (the “IRS”) released the final regulations under Section 411(d)(6) of the Internal Revenue Code (the “Code”).¹ The regulations provide guidance regarding the U.S. Supreme Court’s holding in Central Laborers’ Pension Fund v. Heinz, 541 U.S. 739 (2004) and the use of the utilization test for determining whether […]
The recently enacted Pension Protection Act of 2006 (the “PPA”) makes some of the most sweeping revisions to employee benefits law since the enactment of ERISA. Many provisions of the PPA have delayed effective dates, and we will be reporting on various aspects of the new law in upcoming issues of Benefits Report. The PPA […]
On July 11, 2006, the IRS issued Notice 2006–69 (“Notice”) which provides further guidance regarding the use of debit cards, credit cards and stored value cards to reimburse participants in health flexible spending accounts (“health FSAs”), health reimbursement arrangements (“HRAs”) and dependent care assistance programs (“DCAPs”). In addition to expanding on the electronic payment card […]
On July 20, 2006, the Department of Justice and the Securities Exchange Commission filed criminal and civil charges against former executives of Brocade Communications Systems, Inc., one of the more than eighty companies currently under investigation for backdating stock options. One of the executives charged in the Brocade litigation is the former vice president of […]
The Voluntary Fiduciary Correction Program (“VFC Program”), issued by the Employee Benefits Security Administration of the Department of Labor, is designed to encourage self-correction of certain violations of the Employee Retirement Income Security Act of 1974. The VFC Program was permanently adopted in 2002 and revised in 2005. In April 2006 the DOL issued further […]
Recent court decisions remind plan administrators of the importance of meticulously following the Department of Labor (“DOL”) regulations regarding determination of benefit claims and appeals under a plan’s internal administrative procedures. Where plan administrators have failed to follow the DOL’s claims regulations or the plan’s internal claims and appeals procedures, their benefit claims decisions may […]
Since the Supreme Court’s 2002 decision in Great-West Life & Annuity Insurance Co. v. Knudson, 534 U.S. 204 (2002), plan administrators in many states have been unable, for all practical purposes, to enforce reimbursement and subrogation provisions contained in their welfare plans. Some federal courts took a more relaxed view of Knudson and permitted plans […]
Introduction On May 5, 2006, the Internal Revenue Service (the “IRS”) issued Revenue Procedure 2006–27 (the “Revenue Procedure”), the long-awaited update to the Employee Plans Compliance Resolution System (“EPCRS”). EPCRS is a program designed to encourage plan sponsors to correct certain qualification failures while allowing plans with “defects” to continue providing retirement benefits to participants […]
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