IRS Announces Phase 2 of Pre-Examination Compliance Pilot Program

Recently, the IRS announced phase two of its expansion of the Pre-Examination Compliance Pilot Program. Under the pilot program, an employer may limit or entirely avoid an impending IRS audit if they promptly correct any identified errors via the IRS’s Self Correction Program (SCP). During phase two, the IRS will notify employers by letter that their retirement plan was selected for upcoming examination. The employer then has 90 days to review their plan’s documents and operations to determine if they meet current tax code requirements.

If the employer identifies any errors, they may self-correct the errors under the SCP. Errors that aren’t eligible for correction under the SCP can be corrected by requesting a closing agreement, and the IRS will use the favorable Voluntary Correction Program fee structure to determine the sanction amount payable.

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Roth Employer Contributions

On December 20, 2023, the IRS issued Notice 2024-2, which provides question-and-answer guidance on various aspects of the SECURE 2.0 Act. This post focuses on the ability to make employer contributions (match or nonelective) as Roth contributions under SECURE 2.0 Act Section 604.  (For an overview of SECURE 2.0 for defined contribution plan sponsors, click here.)

Overview of SECURE 2.0 Language on Employer Roth Contributions

Section 604 SECURE 2.0 Act permits employers to make employer contributions, both matching and nonelective contributions, as Roth contributions to a 401(k), 403(b), or 457(b) plan. To be designated as a Roth contribution, the employer contribution must be fully vested (nonforfeitable) when made. The Roth contribution is not excluded from gross income. The ability to make Roth employer contributions was effective with respect to employer contributions made after December 29, 2022, the date of enactment of the SECURE 2.0 Act.

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ERISA Moments Ep. 17: The DOL Fiduciary Proposal’s Impact on Banks and Trust Departments

Take a quick dive into the exciting world of ERISA with Faegre Drinker benefits and executive compensation attorneys Fred Reish and Brad Campbell. In this quick-hit series of updates, Fred and Brad offer a high-level view of current trends and recent ERISA developments. See the newest episode, The DOL Fiduciary Proposal’s Impact on Banks and Trust Departments, below.

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ERISA Moments Ep. 16: DOL Fiduciary Hearings and Comment Letters: Part 2

Take a quick dive into the exciting world of ERISA with Faegre Drinker benefits and executive compensation attorneys Fred Reish and Brad Campbell. In this quick-hit series of updates, Fred and Brad offer a high-level view of current trends and recent ERISA developments. See the newest episode, DOL Fiduciary Hearings and Comment Letters: Part 2, below.

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ERISA Moments Ep. 15: DOL Fiduciary Hearings and Comment Letters: Part 1

Take a quick dive into the exciting world of ERISA with Faegre Drinker benefits and executive compensation attorneys Fred Reish and Brad Campbell. In this quick-hit series of updates, Fred and Brad offer a high-level view of current trends and recent ERISA developments. See the newest episode, DOL Fiduciary Hearings and Comment Letters: Part 1, below.

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ERISA Moments Ep. 14: What do PTEs 2020-02 and 84-24 Require For Rollover Recommendations?

Take a quick dive into the exciting world of ERISA with Faegre Drinker benefits and executive compensation attorneys Fred Reish and Brad Campbell. In this quick-hit series of updates, Fred and Brad offer a high-level view of current trends and recent ERISA developments. See the newest episode, What do PTEs 2020-02 and 84-24 Require For Rollover Recommendations?, below.

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In Case You Missed It: Spotlight on Benefits – Winter 2024

Written by members of Faegre Drinker’s benefits and executive compensation team, this blog features analysis and information on matters related to retirement plans, health and welfare plans, ESOPs, ERISA litigation, fiduciary governance, and other benefits issues.

This quarterly digest provides links to our most popular posts during the past few months so that you can catch up on what you missed or re-read them.


IRS Announces 2024 Retirement Plan Limits

By Sarah Bassler Millar, Mark Rosenfeld, Dawn Sellstrom and Inés Sosa
The IRS recently announced the 2024 cost-of-living adjustments to various benefit and contribution limits applicable to retirement plans. The IRS modestly increased the applicable limits for 2024.

Introducing ERISA Moments: Bite-Size Vodcasts on the Latest ERISA Developments

By Fred Reish and Bradford Campbell
Take a quick dive into the exciting world of ERISA with Faegre Drinker benefits and executive compensation attorneys Fred Reish and Brad Campbell. In this quick-hit series of updates, Fred and Brad offer a high-level view of current trends and recent ERISA developments.

When One Door Closes, Another Opens…Maybe Fourth Circuit Holds that Surcharge Is Not Equitable Relief Available Under ERISA but Paves the way for Unjust Enrichment Claims

By Rick Pearl
In an ERISA case for wrongful denial of health insurance benefits, the U.S. Court of Appeals for the Fourth Circuit addressed when a plaintiff may recover monetary relief under §§ 502(a)(1)(B) and (a)(3). The Fourth Circuit unsurprisingly held that ERISA § 502(a)(1)(B) limits recovery to benefits due under the terms of a plan, and a plaintiff cannot recover the cost of a denied surgery because the cost is not a “benefit” due; coverage for the cost, and payment to the provider, is the benefit. Unless a plaintiff pays the bill first, the plaintiff cannot recover the cost from an insurer.

ERISA Moments Ep. 13: Rollover Recommendations Will be Fiduciary Advice…And What About Withdrawals?

Take a quick dive into the exciting world of ERISA with Faegre Drinker benefits and executive compensation attorneys Fred Reish and Brad Campbell. In this quick-hit series of updates, Fred and Brad offer a high-level view of current trends and recent ERISA developments. See the newest episode, Rollover Recommendations Will be Fiduciary Advice…And What About Withdrawals?, below.

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De Minimis Financial Incentives to Participate in a 401(k) or 403(b) Plan

On December 20, 2023, the IRS issued Notice 2024-2, which provides question-and-answer guidance on various aspects of the SECURE 2.0 Act. This post focuses on the “de minimis financial incentives” under SECURE 2.0 Act Section 113.  (For an overview of SECURE 2.0 for defined contribution plan sponsors, click here.)

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ERISA Moments Ep. 12: Unexpected Fiduciaries: Wholesalers, IMOs and Others

Take a quick dive into the exciting world of ERISA with Faegre Drinker benefits and executive compensation attorneys Fred Reish and Brad Campbell. In this quick-hit series of updates, Fred and Brad offer a high-level view of current trends and recent ERISA developments. See the newest episode, Unexpected Fiduciaries: Wholesalers, IMOs and Others, below.

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