A recent decision from the U.S. Court of Appeals for the Sixth Circuit provides a strong lesson in the need for employers to fully explore an employee’s request for a reasonable accommodation and to when necessary be flexible in applying certain workplace policies. In the matter of EEOC v. Dolgencorp, LLD dba Dollar General Corp., …
IRS Permits the Use of Forfeitures for QNECs, QMACs and Safe Harbor Contributions
Many employers had long assumed that they could fund contributions to qualified plans made to avoid violating nondiscrimination rules from employee forfeiture accounts. Recently, the IRS finalized helpful new guidance to employers clarifying that forfeitures can be used fund these contributions. QNECs, QMACs and Safe Harbor Contributions Tax-qualified defined contribution plans (e.g., 401(k) and profit …
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Time for Non-Profits to Update Their 403(b) Retirement Plans
Non-profit entities, including schools and universities, that sponsor 403(b) retirement plans should begin the process of restating their plans to comply with current law. This is the first restatement cycle since the December 31, 2009 deadline for sponsors of 403(b) plans to adopt written plan documents. A 403(b) plan is similar to a 401(k) plan …
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Signs Point to Yes: The IRS Advisory Committee Drops Hints That the Qualified Retirement Plan Determination Letter Program Might Return in Some Form
For many years, plan sponsors could regularly get a determination letter from the IRS to ensure that their individually-designed qualified retirement plan met all of the requirements for favorable tax treatment. However, in 2017 the IRS ended that practice. Since that time, plan sponsors have had no mechanism by which to confirm that their plans …
Qualified Transportation Fringe Benefits No Longer Deductible for Employers
In the past, employers have been able to deduct expenses related to “qualified transportation fringe benefits” (“QTFBs”) such as qualified parking, transit passes, transportation in commuter highway vehicles, or qualified bicycle commuting reimbursements. Pub. L. No. 115-97, commonly referred to as the “2017 Tax Act” or the “Tax Cuts and Jobs Act” (“TCJA”), however, has …
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The Sixth Circuit Reminds Plan Sponsors of the Importance of Firestone “Magic Words” for ERISA Plan Interpretation
A recent ruling by the Sixth Circuit Court of Appeals acts as an important reminder to ERISA plan sponsors that reserving the written right to interpret plan documents may be critical in interpreting otherwise ambiguous language. The Firestone Language In the 1989 case Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989), the …
Common But Costly Mistakes in 401(k) Plan Loans
Many 401(k) plans allow participants to borrow amounts from their vested 401(k) plan accounts and repay such amounts, typically through payroll deductions, back to their own accounts. Plan loans must comply with IRS rules which govern: the amount of the loan (lesser of $50,000 or 50% of the vested account balance), the loan term (5 …
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The PBGC’s Missing Participant Program Now Allows Terminating Defined Contribution Plans to Participate
Especially upon plan termination, locating missing participants can be a major headache for plan sponsors, who have a fiduciary obligation to locate participants and distribute benefits under the terminating plan. In one development that may help in this regard, the Pension Benefit Guaranty Corporation (“PBGC”) issued final regulations that expand, revise and simplify its Missing …
United States Supreme Court Declines Review of Seventh Circuit ADA Leave Decision
This month the United States Supreme Court declined to review the Seventh Circuit Court of Appeals’ decision in Severson v. Heartland Woodcraft, Inc. The Plaintiff asked the Supreme Court to consider whether there is a per se rule that a finite leave of absence of more than one month (after the employee had exhausted his …
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The Hidden (In Plain Sight) Costs of Participating in Multiemployer Fringe Benefit Plans
Employers that participate in multiemployer fringe benefit plans (i.e., a plan providing benefits for union employees into which more than one employer contributes) typically understand the basic costs of doing so.