Pension News - What's New in 2017?
The following list tracks important guidance that has been released during 2017. These items are summarized in detail, with appropriate commentary, in our quarterly newsletter, eRISA Update. See our Newsletters page to sign up for eRISA Update. Legislative Developments
Treasury Regulations
- Forfeitures may be used to reduced employer’s contribution liability for QNECs, QMACs and 401(k)(12) safe harbor contributions [Citation: Prop. Treas. Reg. §§1.401(k)-1(g)(5), 1.401(k)-6, 1.401(m)-1(d)(4), and 1.401(m)-5, 82 F.R. 5477-5480 (January 18, 2017)]
Text available at http://bit.ly/2k06v4m
IRS Guidance
- Annual update of general procedures for obtaining Employee Plans determination letters and private letter rulings; user fees set for 2017[Citation: Rev. Proc. 2017-4, 2017-1 I.R.B. (January 3, 2017)]
Text available at http://bit.ly/2hMvZRn
- IRS guidance on user fee waiver for certain small employers that submit for determination letters after 2016 [Citation: Notice 2017-1, 2017-2 I.R.B. (January 9, 2017) (advance release on December 19, 2016)]
Text available at http://bit.ly/2i8MfwC
- IRS issues guidance on election for de minimis error safe harbor rule not to apply to incorrect payee statements (including Form 1099-R) [Citation: Notice 2017-9, 2017-4 (January 23, 2017; advance release on January 4, 2017)]
Text available at http://bit.ly/n17-09
- Remedial amendment period for section 403(b) plans announced [Rev. Proc. 2017-18, 2017-5 I.R.B. (January 30, 2017; advance release on January 13, 2017)]
Text available at http://bit.ly/2jh22gQ
- IRS posts initial Operational Compliance List on its website [Citation: Operational Compliance List (February 27, 2017), www.irs.gov]
Text available at http://bit.ly/2mLabbv
- IRS Examination Guidelines on substantiation of hardship distributions [Citation: Memorandum for EP Examinations Employees: Substantiation Guidelines for Safe Harbor Distributions from Section 401(k) Plans, from Thomas J. Petit, Acting Director, EP Examinations (February 23, 2017)]
Text available at http://bit.ly/2m8FLTs
- IRS identifies types of compensation-based formulas under cash balance plans that may raise definitely determinable benefit issues [Citation: Memorandum for Employee Plans (EP) Employees from Lisa J. Beard, Acting Director, Employee Plans, Control No. TE/GE-04-0417-0014 (April 7, 2017)]
Text available at http://bit.ly/2on5HcY
- IRS memorandum to exam agents allows for two interpretations of how $50,000 limit under IRC §72(p) applies to multiple loans during a 12-month period [Citation: Memorandum For EP Examinations Employees, Control No. TEGE-04-0417-0016 (April 20, 2017)]
Text available at http://bit.ly/2pYHtt5
- IRS memorandum sets forth revised criteria for mandatory review of determination letter cases [Citation: Memorandum on Changes in Tax Exempt Quality Management System and Mandatory Review Standards, TE/GE-07-0417-0018 (April 28, 2017)]
Text available at http://bit.ly/2oYeNAz
- Revised procedure for Pre-Approved Plans combines M&P plans and volume submitter plans into a single category of Pre-Approved Plans, expands plan eligible to use Pre-Approved Plan Documents, delays third on-cycle submission period for Defined Contribution Pre-Approved Plans [Citation: Rev. Proc. 2017-41, 2017-29 I.R.B. (July 17, 2017) (advance release on July 3, 2017)]
Text available at http://bit.ly/2tvvowE
- 2017 list issued for review of Pre-Approved DC Plans in the 3rd remedial amendment cycle [Citation: Notice 2017-37, I.R.B. 2017-29 (July 17, 2017) (advance release on July 3, 2017)]
Text available at http://bit.ly/2sqmTDP
- Updated of procedures for requesting approval of a proposed benefit suspension under a multiemployer defined benefit plan in critical and declining status, as permitted under IRC §432(e)(9); model notice to participants provided [Citation: Rev. Proc. 2017-43, 2017-31 I.R.B. (July 31, 2017) (advance release on July 13, 2017)]
Text available at http://bit.ly/2tfWT9E
IRS Chief Counsel Advice, Private Letter Rulings and Technical Advice Memoranda
- Election offered by State to receive enhanced subsidized early retirement pension or a lump sum cash payment was an impermissible cash or deferred arrangement [Citation: PLR 201722014 (March 2, 2017)]
Text available at http://bit.ly/2qJtjca
- IRS analyzes several scenarios under back-to-back arrangement rule [Citation: CCA 201725027 (March 6, 2017)]
Text available at http://bit.ly/2rLV0S8
DOL Regulations
- Civil penalty adjustments for 2017 [Citation: DOL Federal Civil Penalties Inflation Adjustment Act Annual Adjustments for 2017, DOL Reg. 2575.3, 82 F.R. 5373-5387 (January 18, 2017)]
Text available at http://bit.ly/2jx9Qet
- DOL delays the Applicability Date of the fiduciary regulation and associated prohibited transaction exemptions, provides extended delay for requirements other than the Impartial Conduct Standards [Citation: Extension of Applicability Date of DOL Reg. §2510.3-21, PTEs 2016-01 and 2016-02, and amendments to PTEs 75-1, 77-4, 80-83, 83-1, 84-24 and 86-128, 82 F.R. 16902-16918 (April 7, 2017)]
Text available at http://bit.ly/2oJupYf
Attention: The DOL has asked the OMB to approve a further extension of the Transition Period through July 1, 2019, during which only the Impartial Conduct Standards will apply under the BIC Exemption, the Principal Transactions Exemption, and the revised version of PTE 84-24.
DOL Formal Guidance/Prohibited Transaction Exemptions
PBGC Regulations and Other Guidance
- Civil penalty adjustments for 2017 [Citation: PBGC Federal Civil Penalties Inflation Adjustment Act Annual Adjustments for 2017, PBGC Reg. §§4071.3 and 4302.3, 82 F.R. 8813-8814 (January 31, 2017)]
Text available at http://bit.ly/2jqqe1g
EBSA Advisory Opinions, Field Assistance Bulletins and other informal guidance
- DOL issues FAQs on the conflict-of-interest exemptions issued in conjunction with the expanded definition of investment advice fiduciary [Citation: Conflict of Interest Exemptions FAQs - Part I (October 2016); Conflict of Interest Exemptions FAQs - Part II (January 2017); Consumer Protections for Retirement Investors - FAQs on Your Rights and Financial Advisers (January 2017)]
Text available at http://bit.ly/2fn686v (Part I of Conflict FAQs), http://bit.ly/2jJWoS9 (Part II of Conflict FAQs), http://bit.ly/2iosrdd (Investor FAQs)
- DOL adopts temporary nonenforcement policy during Transition Period under conflict of interest exemptions and issues FAQs regarding compliance during such period [Citation: Field Assistance Bulletin (FAB) 2017-02 (May 22, 2017); Conflict of Interest FAQs (Transition Period) (May 2017)]
Text available at http://bit.ly/2qLxuGY (FAB 2017-02); http://bit.ly/2wNqbPU (Transition Period FAQs)
Attention: The DOL has asked the OMB to approve a further extension of the Transition Period through July 1, 2019, during which only the Impartial Conduct Standards will apply under the BIC Exemption, the Principal Transactions Exemption, and the revised version of PTE 84-24.
ERISA Litigation
- IRS could not recharacterize dividends paid to Roth IRAs through a DISC as contributions made by the owners of the Roth IRAs where transactions were structured exactly as the tax code requires [Citation: Summa Holdings, Inc. v. Commissioner, 848 F.3d 779 (6th Cir. February 16, 2017)]
Text available at http://bit.ly/2m61U2a
- Administrator acted arbitrarily in interpreting plan language that clearly applied under the claimants’ situation regarding involuntarily termination from the controlled group [Citation: Knowlton v. Anheuser-Busch Companies Pension Plan, No. 15-3538, 849 F.3d 422 (8th Cir. February 22, 2017)]
Text available at http://bit.ly/2luQgjr
- Damages award on fiduciary breach with respect to substitution of default investment fund vacated because district court failed to consider other damages calculation other than a suggested alternative mentioned by the appellate court in the earlier opinion [Citation: Tussey v. ABB, Inc., 850 F.3d 951 (8th Cir. (MO) March 9, 2017)]
Text available at http://bit.ly/2mP9dPn
- Supreme Court holds “principal purpose organization” of church may establish and maintain a church plan that is exempt from ERISA [Citation: Advocate Health Care Network v. Stapleton, ___ S.Ct. ___ (June 5, 2017)]
Text available at http://bit.ly/2s9UDEr
- Promissory estoppel claim against health insurer ruled not preempted by ERISA because medical provider did not receive valid assignment of payment and received an independent promise from insurer [Citation: McCulloch Orthopaedic Surgical Services, PLLC v. Aetna, Inc., 857 F.3d 141 (2nd Cir. May 18, 2017)]
Text available at http://bit.ly/2s4rlD5
- Reformation of defined benefit plan ordered by court because of fraudulent concealment of the wear-away effect of replacing the plan’s traditional benefit formula with a cash balance formula [Citation: Osberg v. Foot Locker, Inc., 862 F.3d 198 (2nd Cir. July 6, 2017)]
Text available at http://bit.ly/2vBzq7x
Miscellaneous Guidance
- SEC’s Division of Investment Management provides guidance on how robo-advisers meet obligations under the Investment Advisers Act of 1940 [Citation: IM Guidance Update 2017-02 (February 2017)]
Text available at http://bit.ly/2lrmGaY
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