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EMPLOYEE BENEFIT/EXECUTIVE COMPENSATION CHANGES MADE BY THE CARES ACT

On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (the ?Ç£CARES Act?Ç¥). This historic $2 trillion relief package received bipartisan support and is part of the third wave of federal government support as the nation copes with the acute economic fallout from the coronavirus (COVID-19) pandemic.  Some of the key provisions of the CARES Act that apply to health and welfare plans, educational assistance programs, retirement plans, executive compensation programs, and employment and payroll taxes are outlined below. Health and Welfare Plans Q1.      What COVID-19 testing and treatment is our company?ÇÖs employer-sponsored group health plan required to cover? The Families First Coronavirus Response Act (?Ç£FFCRA?Ç¥) requires an employer-sponsored group health plan (including a grandfathered plan under the Affordable Care Act (?Ç£ACA?Ç¥)) (a ?Ç£Plan?Ç¥) to provide coverage for COVID-19 diagnostic testing and services related to the diagnostic testing without any cost sharing (including deductibles, copayments, and… Continue Reading

Newly Passed SECURE Act Will Impact Qualified Retirement Plans

The Setting Every Community Up for Retirement Enhancement Act of 2019 (the ?Ç£SECURE Act?Ç¥) was signed into law on December 20, 2019. This law will likely impact most tax qualified retirement plans, and some of the changes appear to be immediately effective. Plan sponsors should review their plans with counsel to determine what administrative modifications and plan amendments may be required. Key provisions of the SECURE Act include: ?Çó Changes to the eligibility and coverage requirements for certain long-term part-time employees. ?Çó Changes to the required minimum distribution (?Ç£RMD?Ç¥) requirements, including increasing the age for RMDs from age 70?? to age 72. ?Çó Increased penalties for failures to file and/or provide certain retirement plan returns and notices, including the Form 5500, the registration statement for deferred vested participants, and the rollover notice. ?Çó Changes to rules applicable to non-elective safe harbor plans. Non-elective safe harbor plans are those that provide… Continue Reading

New Federal Budget Impacts Qualified Retirement Plans

The recently enacted Bipartisan Budget Act of 2018 (the ?Ç£Act?Ç¥) modifies certain Internal Revenue Code provisions relating to hardship distributions from qualified retirement plans that (i) eliminate the requirement that a participant?ÇÖs deferrals be suspended for six months following a hardship distribution, (ii) eliminate the requirement that participants take out all available plan loans before receiving a hardship distribution, and (iii) expand the sources available to fund hardship distributions to include QNECs and QMACs. These changes to the hardship distribution rules are effective for plan years beginning on or after January 1, 2019. In addition to the changes for hardship distributions, the Act provides additional relief for victims of the recent California wildfires that permits eligible plan participants to receive a distribution of up to $100,000, which will not be subject to the mandatory 20 percent income tax withholding or the 10 percent early withdrawal penalty. The participant may elect… Continue Reading

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