Puerto Rico to Allow Rollovers from the Government Plan for Puerto Rico Employees to Qualified Retirement Plans
On January 20, 2021, the Puerto Rico Department of Treasury released Administrative Determination No. 21-01 (?Ç£AD 21-01?Ç¥), allowing for direct and indirect rollovers of lump-sum distributions from the defined contribution government plan for Puerto Rico employees to a plan that is qualified under Section 1081.01(a) of the Puerto Rico Internal Revenue Code of 2011, as amended (the ?Ç£Code?Ç¥), maintained by a private-sector employer. Such rollovers would be considered exempt transactions and would not be subject to income tax withholding under Section 1081.01(b) of the Code. The provisions of AD 21-01 are effective immediately. AD 21-01 is available here.
The ERISA private right of action under section 502(a) is not available to participants or beneficiaries of non-federal governmental plans.?á However, the Patient Protection and Affordable Care Act requires non-federal governmental health plans to comply with the Department of Labor?ÇÖs claims procedure regulation and new model notices, including providing information on the ERISA private right of action under section 502(a).?á The U.S. Department of Health and Human Services recently issued an enforcement safe harbor pursuant to which the HHS will not enforce the requirement that non-federal governmental plans provide notice of the ERISA private right of action or provide contact information for the Employee Benefits Security Administration or a State Department of Insurance (unless the plan is fully-insured or such department otherwise provides assistance to such participants).?á However, such plans must provide other contact information for assistance provided by the plan and either the contact information for the state?ÇÖs Consumer… Continue Reading