Labor & Employment Developments Blog

This month the IRS announced increased retirement plan contribution limits for 2020. Employees in 401(k) plans will be able to contribute up to $19,500 next year, and the catch-up contribution limit for employees aged 50 and over has increased from $6,000 to $6,500. The complete list of notable employer retirement plan increases are summarized below:

The increased contribution limits for employer sponsored retirement plans stand in contrast to the more stagnant limits for IRAs: the limit on annual contributions to an IRA is unchanged at $6,000, along with the IRA ...

On September 19, 2019, the final regulations were published making 401(k) hardships easier for participants. Although there are no major departures from last year’s proposed regulations, plan administrators will want to be aware of several key updates, including –

• The list of safe harbor expenses that are considered to satisfy the “immediate and heavy financial need” threshold has been expanded: the home casualty hardship reason is not limited by IRC 165(h)(5) and need not be in a federally declared disaster area, and expenses incurred as a result of certain federally ...

The DOL recently released a final rule intended to provide small businesses with greater access to quality and affordable retirement plans.  The new rule, effective September 30, 2019, clarifies that a small employer group (association) -- such as employers in the same locale or particular industry/trade -- can band together and offer a defined contribution retirement plan to their employees through an Association Retirement Plan (“ARP”).  This significantly relaxes the “commonality” standard previously required for separate employers to offer a combined retirement ...

Are you responsible for the actions of the prior members of the retirement plan committee? Fiduciaries have a duty to remedy the continuing effect of their predecessors’ breach if they know of the breach. But what type of knowledge is required for liability to attach? In Fuller v. SunTrust Banks, Inc., a federal court evaluated whether actual or constructive knowledge is sufficient. The court found that successor fiduciaries must have actual knowledge of their predecessors’ breach to be held liable. In so finding, the court rejected plaintiffs’ reliance on ...

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 ...