Coffee Talk with Benefits Seyfarth Shaw LLP

Signed into law in the waning days of 2022, the SECURE 2.0 Act contains over 90 provisions impacting qualified retirement plans. Several of these provisions materially expand how Roth contributions are to be used, that impact employers and participants alike. We are witnessing the Rothification of retirement accounts. Grab your cup of coffee and tune in to hear Richard and Sarah chat with Seyfarth colleague Ben Spater about the many Roth related changes in SECURE 2.0. We will continue to discuss the multitude of other (non-Roth) provisions in SECURE 2.0 in future episodes as well. So bookmark us!

The Internal Revenue Code provides significant tax benefits for both employers and employees participating in a 401(k) or 403(b) plan. In exchange for these tax benefits, the plan must satisfy a litany of requirements, notably that a plan be administered in accordance with its plan document. Failure to do so could result in the plan’s loss of its tax-qualified status, which would result in adverse tax consequences for the employer and plan’s participants. A common failure is not following the participant’s contribution election, or perhaps failing to auto-enroll a participant otherwise eligible to be. So how do employee contribution failures occur, and how are they typically corrected? How do the IRS correction procedures treat automatic deferral plans? Grab your cup of coffee and tune in to hear Richard and Sarah chat with Seyfarth colleague Sarah Magill about these pressing questions and more!

‘Missing’ or lost participants often raise a handful of legal and administrative issues for plan sponsors. The lack of definitive guidance has led to confusion for plan sponsors in deciding what to do about missing participants. While the IRS and DOL have their own separate concerns, both agencies are concerned and likely to inquire about a plan’s missing participants upon audit. What steps should plan sponsors take to decrease the chance that a participant will go missing, and what does the IRS and DOL expect you to do to find missing participants? Grab your cup of coffee and tune in to hear Richard and Sarah chat with their first external guest, Gary Chase of Willis Towers Watson, about these pressing questions that frankly, every retirement plan struggles with.

In December 2019, The Setting Every Community Up for Retirement Enhancement Act (SECURE Act) was enacted and signed into law. The Act was the most significant piece of legislation impacting employee benefit plans since the Pension Protection Act in 2006, and includes a plethora of changes to the laws governing employer-sponsored retirement plans, specifically impacting defined contribution and defined benefit plans, IRAs, 529 plans and governmental plans. And then the pandemic hit. So while the SECURE Act has been in place for over two years, many employers are still grappling with what adjustments they need to make. How has the SECURE Act impacted post-death required minimum distributions? How has it impacted long-term part-time employees and their participation in defined contribution plans? Grab your cup of coffee and tune in to hear Richard and Sarah chat with Seyfarth’s Irine Sorser about these pressing questions and more!

With interest rates on the rise, defined benefit pension plan sponsors and participants alike may be wondering how their pension plans and pension benefits are impacted. Rising interest rates lower lump sum values, which begs the question of who is impacted; the plan sponsor, the plan participant, or both? Do rising interest rates create any compliance issues? Does a pension plan sponsor have a legal obligation to explain to participants what rising interest rates will do? Grab your cup of coffee and tune in to hear Richard and Sarah chat with Seyfarth Partner Adam Greetis about these pressing questions and more!

Termination of employment is a distribution event under many retirement plans, and particularly under individual account defined contribution plans. But what does it mean to terminate employment? Is there such a thing as a “sham” termination? It’s an important question for plans sponsors to consider before distributing a retirement benefit following the plan participant’s departure, as a distribution attributable to a termination that is not bona fide could be considered a plan disqualification defect, putting the plan’s tax-qualified status at risk. So how does a plan sponsor determine whether there was a “termination of employment” that constitutes a true distribution event? Does the possibility of being rehired put a distribution made on account of a prior termination of employment from that employer at risk? Grab your cup of coffee and tune in to hear Richard and Sarah chat with Seyfarth Partner Christina Cerasale about these pressing questions and more!