This article should interest employers who are offering or thinking about offering retiree medical coverage and should especially interest local governmental entities that are required to offer retiree medical coverage under state law. A federal court case decided on March 21, 2019, highlights the interplay between retiree medical requirements and the Medicare Secondary Payer Rules (MSPR). In River City Fraternal Order of Police Lodge 614, Inc. v. Kentucky Retirement ... Keep Reading »

On April 19, 2019, the IRS updated its guidance on the official methods of correction that can be used by tax qualified[1] and 403(b) retirement plans (and, to a lesser extent, 457 plans). The IRS' summary of the changes can be found here, and will not be re-summarized in this alert. Instead, we provide a "Plain English" guide to understanding the general options a plan sponsor or administrator has when it discovers an error. Background Errors come in all shapes and ... Keep Reading »

This alert should interest sponsors of retirement plans subject to IRC sections 401(k), 403(b), or 457(b) that authorize hardship distributions (often called “unforeseeable emergency distributions” in 457(b) plans). This is not a general summary of the recent changes,[i] but a focused explanation of our concern with one particular aspect that could increase plan sponsor liabilities. Cause of Concern Among the changes made is an allowance for participants to ... Keep Reading »

With U.S. student loan debt totaling $1.5 trillion, employers are seeking ways to ease the burden of repayment for their employees and prospective employees. These have included signing bonuses and direct repayment of outstanding loans. Now, employers appear able to make matching-type contributions to retirement plans based on student loan repayments instead of on salary deferrals alone. On Aug. 17, the IRS publicly released a private letter ruling, allowing an employer ... Keep Reading »

Federal contractors subject to the Service Contract Act might appreciate knowing that the IRS understands that they must generally offer a cash payment to employees who decline coverage. While that would ordinarily be treated as making coverage less affordable and more likely to violate the Affordable Care Act’s affordability requirements, the IRS will not necessarily treat it this way; particularly in light of the 2017 executive order directing the IRS to exercise ... Keep Reading »