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Table
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Current Developments
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TRI Pension Services
The ERISA Outline Book
Current Developments By Chapter
In this section we reference significant current developments, organized by chapter, that affect sections of that chapter in the 2009 Edition of the ERISA Outline Book. For other new developments, visit the What's New page.
In parentheses next to each item in the list below, we note the date we posted the item as well. Subscribers to eRISA Update, one of our quarterly newsletter, contains summaries of the new developments cited. For ordering information, Click here and follow the instructions to print out an order form.
Chapter 1A
Chapter 1B
- Section 403(b) plan definition, Part H (added June 5, 2009). The IRS has published a draft revenue procedure that would launch a prototype program for section 403(b) plans. See Announcement 2009-34.
Chapter 2
Chapter 3A
- Section II, Part D.2.e.3) (added March 21, 2009).Final regulations on eligible automatic contribution arrangements (EACAs); permissible withdrawals under IRC §414(w) [Citation: Treas. Reg. §§1.414(w)-1, 1.402(c)-2, Q&A-4(h), 54.4979-1(c), 74 F.R. 8200 (February 24, 2009)]. Includes a clarification that an EACA is permitted to cover fewer than all eligible employees (e.g., employees who become eligible for the plan after a specified date), but if, for plan years beginning on or after January 1, 2010, all eligible employees are not covered by the EACA, the 6-month correction rule under IRC §4979 is not available. The final regulations also reconfirm that an EACA cannot be implemented mid-year.
- Section II, Part E.4.e.2) (added March 24, 2009).The note at the end of this paragraph refers to sample plan language published by the IRS on July 1, 2008, to provide for transfers to avoid a S corporation's ESOP from having a nonallocation year under IRC §409(p). The IRS has modified that sample language. The new language is published in the Spring Edition of the IRS' Employee Plans News .
Chapter 3B
- Section VIII, Part B.7.b. (added March 21, 2009).Notice 2009-22 provides interim rules regarding asset valuation methods that are permitted to be used by single employer defined benefit pension plans for minimum funding
purposes pursuant to changes made by the Worker, Retiree, and Employer Recovery Act of 2008, Public Law 110-458 (WRERA). This notice also provides automatic approval for a change in asset valuation method for plan years beginning during 2009 to adopt any permissible asset valuation method.
Chapter 4
Chapter 5
Chapter 6
- Section IV, Part C.6. (added March 21, 2009).Final regulations on eligible automatic contribution arrangements (EACAs); permissible withdrawals under IRC §414(w) [Citation: Treas. Reg. §§1.414(w)-1, 1.402(c)-2, Q&A-4(h), 54.4979-1(c), 74 F.R. 8200 (February 24, 2009)]. Permits the election period for permissible withdrawals to be less than 90 days, but the election period may not be less than 30 days.
- Section V, Part B.3.d. (added March 21, 2009).
The Supreme Court has ruled that a beneficiary designation naming a participant's former spouse controlled the disposition of death benefits even though divorce decree stated that the spouse had waived interest in plan benefits [Citation: Kennedy v. Dupont, 45 EBC 2249 (2009)]
Chapter 7
Chapter 8
Chapter 9
Chapter 10
Chapter 11
- Section VI, Part C.1.m. (added March 21, 2009).The proposed regulations cited in this paragraph were finalized on February 24, 2009.
- Section VII, Part C.1.b. (added March 21, 2009).The proposed regulations cited in footnote 10 were finalized on February 24, 2009.
- Section VIII, Part C.2.c. (added March 21, 2009).Regulations issued on February 24, 2009, finalize the proposed regulations cited in this paragraph, reflecting the repeal by the PPA 2006 of the "gap period" earnings rule for ADP/ACP corrective distributions.
- Section VIII, Part D.1. (added March 21, 2009).Regulations issued on February 24, 2009, finalize the proposed regulations cited in this paragraph, reflecting the timing of income rule for ADP/ACP corrective distributions made with respect to post-2007 plan years.
- Section XIV (added March 21, 2009).Final regulations on qualified automatic contribution arrangements (QACAs) finalize the proposed regulations cited in this section with respect to QACAs. [Citation: Treas. Reg. §1.401(k)-3(a), (e), (h), (j) and (k), 74 F.R. 8200 (February 24, 2009)] The regulations prescribe rules for determining how the minimum default percentage rules for a QACA are applied to a rehired employee, or to any employee who previously was enrolled by default but who, for at least one full plan year, has not had any default contributions made on his/her behalf. The final regulations also clarify how to satisfy the notice requirements when it is not practical to give the QACA safe harbor notice before an employee's date of eligibility (e.g., plan with immediate entry provision).
- Section XIV, Part B.4.e. (added June 5, 2009).Proposed regulations permit a company to suspend or reduce the safe harbor nonelective contribution before the end of the year if the company incurs a substantial business hardship. See Prop. Treas. Reg. §§1.401(k)-3(g) and 1.401(m)-3(h). The rules are similar to those for suspending or reducing the safe harbor matching contributions except that a substantial business hardship is required only for suspending or reducing the safe harbor nonelective contribution. Only amendments made after May 18, 2009, may provide for the suspension or reduction of the safe harbor nonelective contribution. WIth this option added to the regulations, the statement made in Part I.2.c.3) of Section XIV no longer is true.
Chapter 12
Chapter 13A
- Section III, Part C.4. (added March 21, 2009). The proposed regulations under ERISA §4010, which update the regulations to reflect the changes made by the PPA 2006, were finalized on March 16, 2009. [Citation: Prop. PBGC Reg. §§4010.1-4010.9, 4010.11-4010.13, 74 F.R. 11022 (March 16, 2009)] The key changes to the proposed regulations are: (1) clarification that for purposes of the gateway tests, only plans that are in existence on the last day of the information year and that are sponsored by persons who are members of the contributing sponsor’s controlled group on the last day of the information year are counted, (2) clarification that fair market value of the plan’s assets, for purposes of ERISA
§4010 excludes contributions receivable (i.e., contributions received by the plan after the end of the plan year). (3) modification of the reporting requirements for sponsors of multiple employer plans which provides for an alternative method of compliance for certain contributing sponsors of multiple employer plans, and (4) modification of the plan actuarial reporting requirements to require filers to report certain information regarding liens and outstanding minimum funding waivers.
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- Section III, Part C.5.e.2)b) (added June 5, 2009). PBGC Technical Update 09-3 provides a waiver from ERISA §4043 reporting, or a simplified reporting option for the 2009 plan year with respect to certain small plans that have missed quarterly contribution not motivated by financial inability.
- Section IV, Part F.2.b. (added March 21, 2009).The DOL has provided interim guidance on the annual funding notices under ERISA §101(f) [Citation: Field Assistance Bulletin 2009-01 (February 10, 2009)]. The guidance includes model notices.
Chapter 13B
Chapter 14
- Section II, Part B.2. (added March 21, 2009).Effective July 1, 2010, Regulation Z, which implements the Truth In Lending law, is no longer applicable to participant loans from employer-sponsored plans (qualified plans, section 403(b) plan, governmental 457(b) plans, provided the loan is solely from vested benefits. [Citation: Regulation Z, 12 C.F.R. Part 226, §226.3(g), 74 F.R. 5244 (January 29, 2009)]
- Section II, Part E.14. (added March 21, 2009).The effective date of the investment advice regulations issued on January 21, 2009, has been postponed to November 18, 2009. [Citation: DOL Reg. §2550.408g-1. 74 F.R. 23951 (May 22, 2009). This delay is in response to a directive from the Obama Administration for review of all regulations that were either pending for release, or had been released but with an effective date that would not occur until after January 20. During this postponed effective date period, the DOL will be reviewing additional public comments solicited by the Department regarding whether to modify the regulations as published.
Chapter 15
Seminars
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