News

The Department of Labor (DOL) recently approved a safe harbor method for retirement plan administrators to use electronic media, as a default, to furnish information to participants and beneficiaries of plans subject to the Employee Retirement Income Security Act of 1974 (ERISA). This new safe harbor method (New Electronic Disclosure Method) has very specific requirements that plan administrators must follow in order to provide participants and beneficiaries with electronic ERISA disclosures. The New Electronic Disclosure Method is in addition to the prior electronic disclosure option established by the DOL in 2002, but it generally allows electronic disclosure to more individuals.

Continuing with ongoing efforts to provide relief during this COVID-19 National Emergency, the Internal Revenue Service, Department of Labor, Treasury Department and EBSA (the “Agencies”) have issued new joint guidance extending certain timeframes under ERISA and the Internal Revenue Code that apply to group health, disability and other welfare plans, and retirement plans as well as the participants/beneficiaries of those plans during this National Emergency.

As a follow-up to the Families First Coronavirus Response Act (FFCRA), the CARES Act both clarifies and expands on the COVID-19 related coverage requirements applicable to group health plans (including grandfathered health plans) and health insurance issuers. The CARES Act includes key provisions impacting certain welfare and fringe benefits including HSA’s and educational assistance programs.

The CARES Act provides a special distribution option for specific individuals. This coronavirus-related distribution is exempt from the prohibition on premature distributions (i.e., prior to age 59 ½ or termination of employment), and thus is exempt from the 10 percent excise tax on such distributions. The distribution is limited to $100,000 from the plans of the sponsoring employer and any member of its controlled group. This coronavirus-related distribution is available to IRAs and plans described in Internal Revenue Code (Code) sections 401(a), 401(k), 403(a), 403(b), and 457(b).

The COVID-19 pandemic is causing significant disruptions to normal everyday life, and part of this normal everyday life is retirement planning. This alert is intended to provide guidance to retirement plans in this very unusual time we find ourselves related to retirement plans. The first section is related to defined contribution plans, and the second section is related to defined benefit plans.

On Wednesday, March 18, 2020 President Donald Trump signed into law House Bill 6201, the Families First Coronavirus Response Act, (FFCRA) which implements extensive efforts to combat the spread of COVID-19, commonly referred to as coronavirus as well as the economic impact of the virus. This new law includes requirements affecting the coverage under employer sponsored group health plans and health insurance issuers in the group and individual market. Specifically, the provisions affecting health plans focus on mandated coverage of COVID-19 testing.

As you may have heard, Congress recently passed — and the President signed into law — the SECURE Act, which is landmark legislation that affects the rules for creating and maintaining employer-sponsored retirement plans. SECURE stands for the Setting Every Community Up for Retirement Enhancement Act. The SECURE Act is generally effective on January 1, 2020.