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Puerto Rico Treasury Announces Qualified Retirement Plan Limits for 2017

The Puerto Rico Department of the Treasury recently issued Tax Policy Circular Letter No. 16-07 (the “Circular“), which announced applicable qualified retirement plan limits for 2017, as required by the Puerto Rico Internal Revenue Code of 2011 (the “PR Code“). For plans qualified in Puerto Rico and for those plans dual qualified in the United States and Puerto Rico, only the limits on annual benefits, annual contributions, and plan compensation have changed for 2017. The applicable plan limits are as follows: Annual Benefit Limit (All Defined Benefit Plans): $215,000 (increased from $210,000 for 2016). Annual Contribution Limit (All Defined Contribution Plans): $54,000 (increased from $53,000 for 2016). Annual Compensation Limit (All Plans): $270,000 (increased from $265,000 for 2016). Compensation Limit for a Highly Compensated Employee: $120,000 (unchanged). Elective Deferrals Limit (Dual Qualified Plans or Federal Government Thrift Plans): $18,000 (unchanged). Elective Deferrals Limit (Puerto Rico-Only Plans): $15,000 (unchanged). Catch-up Contribution… Continue Reading

2016 Health and Welfare Plan Year-End Action Items

There are a number of health and welfare plan action items to address as 2016 closes and 2017 begins. In addition, many employers are wondering how these action items may be affected by the November election results. We have addressed these action items and the possible effects of the election results in our HB Health and Welfare blog here, including: Affordable Care Act (“ACA”) reporting for 2016 (i.e. Forms 1094/1095) and related issues; Issues that may impact plan design and/or written materials, such as the ACA, recent wellness regulations, and federal agency enforcement activity; and Certain other reporting and communication requirements.

Health Care FSA Contribution Limit Increased for 2017

On Friday, October 25, the IRS released Revenue Procedure 2016-55, which increases the maximum amount an employee may contribute toward a health care flexible spending account through salary reduction to $2,600 for 2017. Rev. Proc. 2016-55 is available here.

IRS Announces 2017 Qualified Retirement Plan Limits

The IRS recently announced cost-of-living adjustments for 2017. Below is a list of some of the key annual limits that will apply to qualified retirement plans in 2017: Compensation limit in calculating a participant’s benefit accruals: increased to $270,000. Elective deferrals to 401(k) and 403(b) plans: remains unchanged at $18,000. Annual additions to a defined contribution plan: increased to $54,000. Catch-up contributions for employees aged 50 and over to 401(k) and 403(b) plans: remains unchanged at $6,000. Annual benefit limit for a defined benefit plan: increased to $215,000. Compensation dollar limit for defining a “key employee” in a top heavy plan: increased to $175,000. Compensation dollar limit for defining a “highly compensated employee”: remains unchanged at $120,000. The full list of 2017 plan limits can be found in IRS Notice 2016-62.

ISS 2017 Global Voting Policy Survey Results

Institutional Shareholder Services Inc. (“ISS”) recently released the results of its annual global voting policy survey. Respondents include institutional investors, corporate issuers, as well as consultants and advisors to public companies. Survey responses provide helpful insight into the current views of influential institutional investors in addition to signaling changes to ISS voting policies. This year’s survey was light on executive compensation related questions but did provide helpful feedback on two topics. (1) Frequency of Say-on-Pay: 66 percent of institutional investors favor annual say on pay votes, consistent with current ISS policy. (2) Pay for Performance Metrics: 79 percent of institutional investors support the incorporation of financial metrics, in addition to total shareholder returns, into the ISS pay-for-performance models that identify potential misalignments between CEO pay and company performance. The three most popular alternatives were return on investment metrics (e.g., return on invested capital), return metrics (e.g., return on assets or… Continue Reading

High Deductible Health Plan and Health Savings Account Contribution Limits Set for 2017

The IRS announced the 2017 inflation adjusted amounts for a high deductible health plan (“HDHP”) and health savings account (“HSA”) contribution limits in Revenue Procedure 2016-28, as follows: Minimum HDHP deductibles – $1,300 self-only; $2,600 family (no changes from 2016) HDHP out-of-pocket maximum limits – $6,550 self-only; $13,100 family (no changes from 2016) Annual HSA contribution limits – $3,400 self-only; $6,750 family ($50 increase for self-only; no change to family contribution limit from 2016) Revenue Procedure 2016-28 is available here.

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