Labor & Employment Developments Blog

On May 23, 2019, the House approved the “Setting Every Community Up for Retirement Enhancement (“SECURE Act”) by a vote of 417-3.  The SECURE Act generally provides for an increase in retirement savings and improves portability of lifetime income options between plans (Summary). More specifically, the SECURE Act includes provisions that:

• Require 401(k) plans to offer participation to part-time employees who work at least 500 hours in three consecutive years;
• Simplify the 401(k) safe harbor rules relating to the notice requirement and limits on plan amendments;
• Increase ...

In another recent Revenue Procedure (Rev. Proc. 2019-19), the Employee Plans Compliance Resolution System (“EPCRS”) program was expanded to permit the correction of certain additional failures through the Self-Correction Program (“SCP”). Before this new ruling, the ability to use SCP was more limited The expanded EPCRS provides the following:

• Plan sponsors can now self-correct certain loan defaults without having to report the failure as a deemed taxable distribution to the participant. A correction may be made by either reamortizing the outstanding loan balance or ...

In a recent Revenue Procedure (Rev. Proc. 2019-20), the IRS announced the limited expansion of the determination letter program for individually designed plans.  The program is limited to (1) certain cash balance plans and (2) retirement plans that merge as the result of a corporate transaction.  The window for determination letter submissions for eligible cash balance plans will run from September 1, 2019 to August 31, 2020.  Submissions for merged plans will begin on September 1, 2019 and will be ongoing.

This opportunity is especially important for cash balance plans since the IRS ...