Qualified Plans

IRS Issues Proposed Regulations on Relaxed Rules for 401(k) Hardship Distributions

Topics: 401(k), Qualified Plans

The 2018 Budget Act changes to the hardship distributions rules will make it easier for participants to take these distributions. The changes, as described in the Proposed Regulations, include (1) expanding the contributions and earnings that are eligible to be received in a hardship distribution (including post-1988 earnings on 401(k) deferrals), (2) expanding the permitted…

New DOL Rules on Disability Claims May Impact Retirement and Deferred Compensation Plans.

Topics: DOL, Qualified Plans, Regulation

New DOL rules became effective on April 1, 2018 regarding claims procedures for disability benefits offered in employee benefit plans. The rules apply not only to long-term and short-term disability plans, but may also apply to 401(k) and other qualified retirement plans, as well as non-qualified deferred compensation plans and SERPs. The new rules provide…

WRN#18.01.17: Divorce Decree Suffices as QDRO Under ERISA to Require Insurance Benefit Payment to Non-Designated Beneficiary

Topics: ERISA, Estate planning, Qualified Plans

A U.S. Court of Appeals held that a separation agreement incorporated into a divorce decree, which required that the parties’ name their daughter as the sole beneficiary of any employer-sponsored life insurance, clearly specified the required information to qualify as a qualified domestic relations order (QDRO) for purposes of ERISA.

401(k) Plan Loans: Considering a Loan Program – Better Know the Basics

Topics: 401(k), Qualified Plans

To establish an effective 401(k) loan program, the plan sponsor must ensure that the loans comply with requirements under the Internal Revenue Code (“Code”), along with making other important design decisions. Specifically, plan sponsors must ensure that loans are: (1) made on commercially reasonable terms, (2) adequately secured and documented in writing, (3) paid off…

IRS Provides Model Amendments For Defined Benefit Plan Sponsors to Offer Bifurcated Distribution Options

Topics: Defined benefit plans, IRS, Qualified Plans, Regulation

In Notice 2017-44, IRS provides model amendments for qualified defined benefit (“DB”) plan sponsors used in offering bifurcated distribution options to participants in accordance with the recently issued final regulations regarding required survivor annuity distribution options. The final regulations provide two acceptable bifurcation methods –

Better Yet – Safe Harbor 401(k) Plans- How Exactly Do They Work

Topics: 401(k), Qualified Plans

Generally, every 401(k) plan must satisfy annual nondiscrimination requirements, which are met by passing numerical tests that compare the average percentage of compensation deferred by highly compensated employees to the average percentage deferred by non-highly compensated employees. Failure of these tests typically results in a refund of some or all of the amounts deferred by…