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Raymond P. TurnerBlog Posts

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California Imposes New Flexible Spending Account Notice Requirement On Employers

Beginning with plan years that end in 2020 California employers maintaining flexible spending accounts, or “FSAs,” will be required by a new amendment to the state’s Labor Code, enacted August 30, 2019, to notify the employee participants of any “deadline to withdraw funds before the end of the plan year.”  FSAs are expense reimbursement plans...… Continue Reading
October 21, 2019

EIGHTH CIRCUIT RULES AGAINST THIRD PARTY ADMINISTRATOR IN CROSS-PLAN OFFSETTING IN GROUP HEALTH PLANS

 On January 15, 2019, the federal Eighth Circuit Court of Appeals issued its decision in Peterson v. UnitedHealth Group, Inc., 913 F.3d, 769 (8th Cir. 2019), in which the Court upheld the federal district court’s holding that UnitedHealth Group, Inc. (“United”) was not authorized to reduce (or “offset”) payments to medical providers under ERISA group...… Continue Reading
April 18, 2019

DEDUCTIONS AND W-4S: EARLY 2018 RESPONSES TO TAX REFORM

The Tax Cuts and Jobs Act signed into law on December 22, 2017 is prompting some prudent early tax 2018 actions by both employers and employees related to employee benefits. Many employers are electing to make additional employer qualified plan contributions for the 2017 tax year when the employer’s tax rate may be higher and...… Continue Reading
March 12, 2018

2018 Tax Reform Series: A Change to Participant Loan Rollovers

One welcome qualified plan change under the Tax Cuts and Jobs Act is the extension of the period within which a participant may pay the amount of an “offset” of an outstanding plan loan to another qualifying plan or IRA to accomplish a tax-free rollover of the loan offset amount. The change became effective January...… Continue Reading
January 2, 2018

FORFEITURE FREEDOM

Some of our employer client sponsors of pre-approved 401(k) plans have contacted us regarding plan amendment notices received recently from their prototype or volume submitter plan document sponsors relating to the expanded use of forfeitures in their plans. An employer is informed either that an amendment has already been made for all employers that have...… Continue Reading
August 16, 2017

DETERMINATION LETTER RATIONING: IRS REVEALS THE BRAVE NEW WORLD

Last year’s announcement by the Internal Revenue Service (IRS) of the elimination of the current five-year remedial amendment cycle system for determination letter approval of restated individually-designed qualified plan documents provoked bitter criticism and calls to reverse course. The Service cited budget constraints allowing a median time of only three hours of agent review per … Continue Reading
July 10, 2016

DEATH AND TAXES FOR QUALIFIED PLANS

An IRS plan audit uniquely focuses an employer’s mind on the core identity of its qualified retirement plan, which is that of a tax exempt organization, but one whose exemption (or “qualification”) requirements are far pickier than those applicable to one’s favorite charity. Any single material operational violation or non-conforming written plan provision risks disqualification … Continue Reading
March 14, 2016

THE RETROACTIVE AMENDMENT FIX FOR PLAN OPERATIONAL FAILURES

Frequently a plan sponsor’s operational failure to follow the terms of its 401(k) or other qualified plan can be corrected under the IRS’s Employee Plans Compliance Resolution System (“EPCRS”) (described at http://www.irs.gov/Retirement-Plans/EPCRS-Overview) with a retroactive amendment instead of a sometimes expensive financial correction. This possibility should not be surprising, given that the maintenance of qualified... Continue Reading
July 14, 2015