Employers in the UK with 250 or more employees will begin auto-enrolling employees in workplace pensions starting in October of this year. However, the dates have been delayed for medium and smaller employers: employers with 50 to 249 employees will begin in April 2014; employers with 30 to 49 employees will begin in August 2015; and employers with less than 30 employees will begin in January 2016. The full schedule can be found here.
On February 9, 2012, the Pension Benefit Guaranty Corporation (?Ç£PBGC?Ç¥) announced a limited voluntary compliance window for covered defined benefit plans that have never paid required premiums to pay past due premiums without penalty. PBGC will waive premium payment penalties as well as information penalties for failure to timely file premium information. The relief, however, does not apply to late payment interest charges. To obtain relief, the plan administrator must (i) contact PBGC by July 31, 2012 and (ii) pay all past-due premiums and file required premium information by August 31, 2012. PBGC has indicated that after the end of this voluntary compliance period, it intends to step up its enforcement efforts. For any covered plan that has never paid PBGC premiums, the penalties can be quite substantial. A copy of PBGC?ÇÖs policy statement can be found here.
IRS Releases Revenue Ruling Addressing Application of QJSA and QPSA Rules for Deferred Annuity Contracts under a Profit-Sharing Plan
In Revenue Ruling 2012-3, the IRS describes the application of the qualified joint and survivor annuity (?Ç£QJSA?Ç¥) and qualified preretirement survivor annuity (?Ç£QPSA?Ç¥) rules in the context of a deferred annuity contract purchased under a profit-sharing plan which absent the purchase of a deferred annuity contract would not otherwise be subject to the QJSA or QPSA rules . The Revenue Ruling sets forth three scenarios involving a profit-sharing plan that offers a deferred annuity contract with varying election options and discusses whether each of the scenarios qualifies for the exception under Code Section 401(a)(11)(B)(iii) from the application of the QJSA and QPSA requirements and when such exception is lost with respect to a participant under certain scenarios. This is part of the lifetime annuity initiative from the IRS and Treasury to encourage annuitization of plan benefits, yet adding the annuitization to a profit sharing plan that is otherwise exempt from… Continue Reading