In recently published Advisory Opinion 2004–02A, the Department of Labor (the “DOL”) provides guidance concerning modifications made to pre-existing qualified domestic relations orders (“QDROs”). The guidance explains that plan administrators who receive court-approved domestic relations orders (“Orders”) that modify the terms of a pre-existing QDRO must honor such Orders, if the Order otherwise is determined […]
Author: Trucker Huss
Introduction Qualified plans generally cannot distribute a benefit prior to normal retirement age without the participant’s consent. However, the law permits a plan to provide for an automatic distribution, or “cash-out,” to a participant who terminates employment with a benefit valued at $5,000 or less. Many plans provide for these automatic cash-outs to avoid administering […]
On April 19, 2004, the Internal Revenue Service (“IRS”) issued Revenue Procedure 2004–25 (“2004–25”), which extends the Remedial Amendment Period (“RAP”) for certain disqualifying provisions. To remain qualified, a plan must satisfy the qualification requirements of the Internal Revenue Code (“Code”) in operation and in form (i.e., its provisions). The RAP is the period during […]
The Issue Same-sex marriages produce uncertainty as to who is a “legal spouse” and create confusion for benefit plan administrators who must make many determinations based on an individual?s status as a “spouse.” For example, a plan administrator might need to determine whether a same-sex spouse is eligible to enroll in health benefits as a […]
On February 17, 2004, the Internal Revenue Service (the “IRS”) published Revenue Procedure 2004–15, superseding Revenue Procedure 94–41, which outlines the updated procedures for obtaining a waiver of the minimum funding standards of Section 412(d) of the Internal Revenue Code (the “Code”) or Section 303 of the Employee Retirement Income Security Act of 1974 (“ERISA”). […]
In 2003, the Department of Labor issued Field Assistance Bulletin 2003–3 (the “FAB”), which provides guidance on the allocation of expenses paid with plan assets in defined contribution plans. In the FAB, the DOL, in part, stated that plans may charge the accounts of vested separated participants with the account’s share of reasonable plan expenses, […]
In February of 2003, the Department of Health and Human Services published the final security regulations under the Health Insurance Portability and Account-ability Act of 1996 (HIPAA). The final regulations, commonly referred to as the HIPAA security rule, are part of HIPAA?s administrative simplification, designed to encourage automation in healthcare information management while addressing concerns […]
On December 19, 2003, President Bush signed the Servicemembers Civil Relief Act (the “SCRA”) which restates, clarifies, revises and renames the Soldiers’ and Sailors’ Civil Relief Act of 1940. In general, the SCRA temporarily suspends legal proceedings and transactions of individuals entering military service so that they may devote their entire energy to the defense […]
On December 8, 2003, President Bush signed into law the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (the “Act”). Title XII of the Act, entitled “Tax Incentives for Health and Retirement Security,” includes provisions which amend the Internal Revenue Code (“IRC”) to provide the basis and favorable tax treatment for Health Savings Accounts […]
On July 17, 2003, the Internal Revenue Service (“IRS”) issued proposed regulations that update and modify the regulations related to 401(k) plans. Hidden in the proposed 401(k) plan regulations is an important change that involves the interaction of employee stock ownership plans (“ESOPs”) and 401(k) plans. The new set of regulations would be effective no […]
IRS Revenue Ruling 2003–43 provides guidance to plan sponsors that offer participants in Health Flexible Spending Accounts (“Health FSAs”) and Health Reimbursement Arrangements (“HRAs”) the ability to use electronic payment cards to pay service providers at the point of sale. The electronic card may be a debit card or a credit card. However, the following […]
On October 10, 2003, Governor Davis signed Assembly Bill 17 (“AB-17”), which made California the first state in the nation to prohibit its contractors from discriminating in the provision of benefits
Recently several clients have contacted our firm asking for an explanation of the “new deferred compensation legislation.” They’ve been pleasantly surprised to learn that to date no such legislation has been enacted. However, two pieces of proposed legislation, the “National Employee Savings and Trust Equity Guarantee Act” (“NESTEG”) and the “American Jobs Creation Act 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 2004. The increases that will affect the most plans are the increase in limitations on deferrals and catch-up contributions, and the increase in the maximum compensation limit. EGTRRA Limitation Increases The Economic […]
On October 5, 2003, Governor Davis signed Senate Bill 2, the “Health Insurance Act of 2003” (“SB2”). This new law creates a purchasing pool to provide health care coverage “for all working Californians and their families that is not tied to employment with an individual employer.” The law requires employers either to contribute to the […]
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