On September 21, 2017, the SEC issued interpretive guidance with respect to the pay ratio rule (i) clarifying its position on a registrant?ÇÖs use of reasonable estimates, assumptions and methodologies, and statistical sampling permitted by the rule, which are made with a reasonable basis and in good faith; (ii) clarifying that a registrant may use appropriate existing internal records, such as tax or payroll records, in determinations regarding the inclusion of non-U.S. employees and in identifying the median employee; and (iii) providing guidance as to when a registrant may use widely recognized tests under another area of law (such as the Internal Revenue Code) to determine whether its workers are employees for purposes of the rule. In addition, the SEC?ÇÖs Division of Corporation Finance issued separate guidance on using statistical sampling methodologies and other reasonable methodologies, providing examples to illustrate the use of such methodologies. View the SEC?ÇÖs press release… Continue Reading
In Notice 2017-45, the IRS extended the temporary nondiscrimination relief that it provided in Notice 2014-5 for plan years beginning before 2019. Notice 2014-5 permits certain employers that sponsor a ?Ç£closed?Ç¥ defined benefit plan and a defined contribution plan to demonstrate that the aggregated plans comply with the nondiscrimination requirements of Section 401(a)(4) of the Internal Revenue Code on the basis of equivalent benefits, even if the aggregated plans do not satisfy the current conditions for testing on that basis. A ?Ç£closed?Ç¥ defined benefit plan for purposes of these Notices provides ongoing accruals but was amended before December 13, 2013, to limit those accruals to some or all of the employees who participated in the plan as of a certain date (i.e., is frozen to new participants). View IRS Notice 2017-45. View IRS Notice 2014-5.