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IRS Makes Changes to EPCRS

The IRS recently published two revenue procedures, which make various modifications and clarifications to the Employee Plans Compliance Resolution System (“EPCRS“), as set forth in Rev. Proc. 2013-12. Of particular note under Rev. Proc. 2015-27 (released on March 27) is a clarification that, with respect to certain plan overpayments, a plan sponsor is not necessarily required to attempt to recoup overpayments directly from participants and beneficiaries. Rev. Proc. 2015-27 also reduced the Voluntary Correction Program fees required for certain participant loan failures. The second revenue procedure, Rev. Proc. 2015-28 (released on April 2), provides new safe harbor correction methods for employee elective deferral failures under 401(k) and 403(b) plans (including plans that have automatic contribution features). Pursuant to these safe harbors, the qualified nonelective contributions that were previously required under EPCRS to correct elective deferral failures may be reduced or eliminated if the failures are corrected within a specified period… Continue Reading

Court: Posting SPDs Solely on Company Intranet Insufficient under ERISA

A U.S. District Court recently held that posting an SPD on an employer’s intranet was insufficient to fulfill its obligation under ERISA to furnish SPDs to plan participants. The case involved a denied claim for life insurance benefits brought by a deceased plan participant’s beneficiaries. The participant had stopped paying life insurance premiums when she became disabled and stopped working. She also had not submitted proof of her disability to the insurance company, so she was ineligible for the policy’s premium waiver benefit that would have maintained her coverage during disability without additional premium payments. The beneficiaries argued, and the court agreed, that the participant did not have notice of the premium waiver’s requirements because she never received a current SPD. The evidence showed that the employer only made the SPD available to its employees via its internal intranet. Therefore, the participant could not have accessed the SPD after she… Continue Reading

April 2015