Ritual marks the onset of a new year — but it’s not just about revelry and pageantry. It’s also about making sure plan-related duties that are on a calendar-year timeline are fulfilled in time.
In a recent blog post, the Snell & Wilmer law firm provides a reminder of what needs to be done before the ball drops.
- the impact of the new mortality tables that are generally effective for plan years beginning on or after Jan. 1, 2018; and
- whether the current plan terms comply with the final regulations issued under Code Section 417(e), if the plan permits participants to receive bifurcated distribution options.
- Plan sponsors of defined benefit plans that maintain an intranet website must post portions of the plan’s Form 5500 on it.
- Single-employer DB plan sponsors must provide participants with an annual notice of the plan’s funding status within 120 days of the end of the plan year to which the notice relates. However, plans with fewer than 100 participants can take longer fulfilling this requirement — they do not have to provide the notice until the Form 5500 concerning that plan year is due.
- Section 101(j) of ERISA requires plan administrators to provide notices to participants if the plan is subject to any restrictions on paying benefits.
- DB plans should provide individual benefit statements every three years or upon request; plans also may notify participants annually that the statement is available and how they may obtain one.
- If the plan’s terms require it, plan administrators must provide notice of the suspension of benefits, during the first month during which the benefit is suspended, to participants who continue employment beyond normal retirement age and to rehired retirees.
- Amending the plan to document disaster relief the IRS provided.
- The IRS provided such relief in 2016 for individuals affected by storms in Louisiana and Hurricane Matthew. The IRS permits employers to offer hardship distributions and loans for such individuals even if their plans did not provide for them. Employers who do so must amend their plans to allow for hardship distributions and/or loans by Dec. 31, 2017.
- The IRS also provided disaster relief in 2017 for individuals affected by Hurricanes Harvey, Irma and Maria and by the California wildfires Employers that offer qualified hurricane distributions or loan relief to participants must amend their plans by Dec. 31, 2019 to make the necessary changes.
- Making mid-year changes to a safe harbor plan under guidance the IRS issued in 2016. An employer that wants to make changes to a safe harbor plan, it should consider doing so before Dec. 31, 2017 and, depending on the change, before providing the safe harbor notice.
- On Jan. 18, 2017, the IRS issued proposed regulations that will allow employers to use forfeitures to make qualified nonelective contributions (QNECs) and qualified matching contributions (QMACs). Under current regulations, QNECs and QMACs must meet certain distribution requirements and be fully vested when contributed to the plan. If an employer wants to use forfeitures in such a way, it should review and amend its plans.
- Employers should distribute a summary annual report (SAR), which generally is due nine months after the plan year ends. If the plan received an extension for filing the Form 5500, the SAR must be distributed by two months after the date on which the Form 5500 was due.
- Neither a QACA nor an EACA may be adopted mid-year; if an employer wishes to add either to its plan for the 2017 plan year, it must adopt an amendment by Dec. 31, 2017 for calendar year plans.
- a comparative chart of detailed investment-related information about the plan’s designated investment alternatives, at least annually; and
- individual benefit statements at least annually; defined contribution plans also must provide the statement upon request.
Both Kinds of Plans
- Generally, a plan must be amended by the last day of the 2017 plan year to reflect and changes that were made to its design.
- The IRS has not yet released the 2017 required amendments list; plan sponsors should watch for its release and prepare to address the items on the 2017 list and amend their plans by Dec. 31, 2019 if need be.
- Summary Plan Descriptions (SPDs) must be updated once every 10 years, and once every five years if the plan has been amended during the five-year period.