This fall has seen two important developments in the area of veterans’ rights under employee benefit plans. On September 20, 2004, the Veterans’ Employment and Training Service (“VETS”) of the Department of Labor (“DOL”) issued proposed regulations under the Uniformed Services Employment and Reemployments Rights Act of 1994, as amended (“USERRA”). (For more information about […]
Author: Trucker Huss
On December 8, 2003, President Bush signed into law the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (“the Act”). Among other things, the Act makes prescription drug coverage available to retirees through Medicare beginning in 2006. The new prescription drug coverage, termed Part D, is available to retirees eligible for Medicare Part A […]
On October 22, 2004, the President signed the American Jobs Creation Act of 2004 (the “Act”), a major piece of corporate tax legislation. The Act contains significant new rules for nonqualified deferred compensation plans which were analyzed in the October 2004 Trucker Huss Special Alert (“Deferred Compensation Update”). The Act also contains a number of […]
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 2005. The increases that will affect the most plans are the increase in limitations on deferrals and catch-up contributions, the increase in the maximum compensation limit and the increase in the limitation […]
The Working Families Tax Relief Act of 2004 (“the Act”) was signed into law on October 4, 2004. The Act provides a uniform definition of “child” that changes taxation of dependent coverage under health and accident plans effective January 1, 2005. This article provides a summary of some of the major changes impacting employee benefit […]
The Department of Labor (the “DOL”) issued a final regulation on September 28, 2004 that establishes a safe harbor pursuant to which a fiduciary of a retirement plan subject to Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”) may meet its fiduciary responsibilities with respect to the automatic rollover of mandatory […]
Health Savings Accounts (“HSAs”) were introduced in December 2003 as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (the “Act”). We described the main features of HSAs in our January 2004 issue of Benefits Report, available at www.truckerhuss.com. Since HSAs were introduced, the Internal Revenue Service and the Department of the […]
The California Department of Insurance and a federal district court have both recently held that the use of so called “discretionary clauses” in disability insurance policies, including those issued to plans governed by ERISA, violates California law and that the state law in this regard is not preempted by ERISA. A discretionary clause in an […]
On June 23, 2004, Governor Schwarzenegger signed into law legislation repealing the Senior COBRA program in California. After January 1, 2005, terminating employees and their spouses will not be able to extend their health care coverage through Senior COBRA once federal or Cal-COBRA is exhausted. Older workers may instead be eligible for guaranteed individual health […]
New Program On June 15, 2004, the Internal Revenue Service issued final regulations under Section 401(a)(9) of the Internal Revenue Code (the “Code”). Treasury Regulations section 1.401(a)(9)–6 provides guidance on the minimum distribution requirements for defined benefit plans, for annuity contracts purchased with account balances under defined contribution and individual retirement plans, and for annuity […]
For two decades IRS informal documents, including the Internal Revenue Manual, have allowed plans to make amendments that change the types of post-retirement employment that trigger the suspension of benefits, even when the amendments apply retroactively to accrued benefits. In addition, the IRS has endorsed this practice by issuing favorable determination letters to plans containing […]
New Program On May 7, 2004, the Pension Benefit Guaranty Corporation (“PBGC”) announced its new Participant Notice Voluntary Correction Program (“VCP”). The program will allow plan administrators of underfunded defined benefit plans to correct a failure to provide required Participant Notices for the 2002 and 2003 plan years without penalty. It is also designed to […]
On May 26, 2004, the Department of Labor published final regulations implementing the COBRA notice requirements for group health plans. These final regulations set minimum standards for the timing and content of various notices required by COBRA and add new notice requirements. Calendar year group health plans must comply with the new regulations by January […]
On March 31, 2004, the Financial Accounting Standards Board (“FASB”) released its long-awaited Exposure Draft of a Proposed Statement of Financial Accounting Standards for Share-Based Payments (“Exposure Draft”). The Exposure Draft requires a charge to earnings for financial accounting purposes for stock-based compensation (and cash compensation that is based on the company’s stock price) paid […]
The Supreme Court’s decision two years ago in Great-West Life & Annuity Insurance Co. v. Knudson, 534 U.S. 204 (2002), has, in most circumstances, effectively precluded employee benefit plans from enforcing plan reimbursement or subrogation provisions. Such provisions are common in health plans and typically require plan participants to reimburse the plan for benefits they […]
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