RETIREMENT ENHANCEMENT AND SAVINGS ACT & THE GOVERNMENT SHUTDOWN

As 2018 drew to a close, there seemed to be a real possibility that meaningful retirement legislation would be signed into law. After the November midterms, the prospects for passage of the Retirement Enhancement and Savings Act (RESA) legislation improved. Yet in late December, the stalemate over funding for a border barrier and the failure to reach a spending agreement eliminated the chances for a continuing resolution and resulted in the government shutdown. Another piece of legislation that will need to be reintroduced is the Receiving Electronic Statements To Improve Retiree Earnings (RETIRE) Act, which was designed to amend the Employee Retirement Income and Security Act (ERISA) and the Internal Revenue Code (Code) to allow plan documents required for participants, beneficiaries, and other individuals to be delivered electronically. Read more »

EXPANDING AND RETAINING ACCESS TO WORKPLACE RETIREMENT PLANS

In August, President Trump issued an executive order (EO) designed to broaden the availability of workplace retirement plans, especially for smaller employers who may be limited by rules and regulations, as well as to potentially limit unnecessary costs and burdens that may hinder the formation of the plans, with the ultimate goal being to strengthen retirement security in America. The EO further mandated that the Secretary of Labor examine the regulations on required minimum distributions from retirement plans as they relate to life expectancy and distribution periods. Read more »

Student Loan Repayment Benefit Approved by IRS in Private Letter Ruling

On August 17, 2018, the Internal Revenue Service (IRS) released a Private Letter Ruling (PLR) approving employer 401(k) matching contributions based on an employee making student loan payments. The PLR approves a benefit for a workforce that is increasingly burdened with student loan debt, and is the latest in an overarching effort of government and employers to help relieve this burden. Read more »

THE END OF THE DOL FIDUCIARY RULE

On June 21, 2018, the Court of Appeals for the Fifth Circuit officially vacated the Department of Labor’s (DOL) 2016 fiduciary rule in its entirety, including the related prohibited transaction exemptions and the Best Interest Contract (BIC) exemption. The Court held that the DOL exceeded its rulemaking authority under ERISA in enacting the rule. Read more »

Fifth Circuit Strikes Down Fiduciary Rule

In a two-to-one decision, the Court of Appeals for the Fifth Circuit vacated the Department of Labor’s (DOL) partially implemented Fiduciary Rule, including the “best interest contract” exemption and other exemptions. Read more »

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Tax Reform Efforts Persist

As noted in the second quarter legislative update, President Trump continues to press Congress to join together and pass tax reform. However, delays, distractions, and complications have considerably reduced any potential changes this year. We have seen other legislation take priority over tax reform to address the debt limit; fund the government; provide funds for disaster relief, and also to reauthorize the Federal Aviation Administration. Additionally, the U.S. budget deficit is proving to be a major obstacle to tax reform and could ultimately derail a tax reform plan. The GOP had hoped to use a budget reconciliation bill to move tax reform; however, this process is not likely to be successful, as sixty votes would be needed in the Senate to pass a tax reform package, which would require buy-in from some democrats. Read more »

Fiduciary Rule Effective

The Department of Labor’s (DOL) Fiduciary Rule went into effect on June 9, 2017. However, the DOL published field assistance bulletin 2017-02 in May that stated that, until January 1, 2018, they “will not pursue claims against fiduciaries who are working diligently and in good faith to comply with the fiduciary duty rule and exemptions, or treat those fiduciaries as being in violation of the fiduciary duty rule and exemptions.” Read more »