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2017 Qualified Plan Limits Released

The IRS recently released updated limits for retirement plans.  Our summary of those limits (along with the limits from the last few years) is below.

Type of Limitation 2017 2016 2015 2014 Elective Deferrals (401(k), 403(b), 457(b)(2) and 457(c)(1)) $18,000 $18,000 $18,000 $17,500 Section 414(v) Catch-Up Deferrals to 401(k), 403(b), 457(b), or SARSEP Plans (457(b)(3) and 402(g) provide separate catch-up rules to be considered as appropriate) $6,000 $6,000 $6,000 $5,500 SIMPLE 401(k) or regular SIMPLE plans, Catch-Up Deferrals $3,000 $3,000 $3,000 $2,500 415 limit for Defined Benefit Plans $215,000 $210,000 $210,000 $210,000 415 limit for Defined Contribution Plans $54,000 $53,000 $53,000 $52,000 Annual Compensation Limit $270,000 $265,000 $265,000 $260,000 Annual Compensation Limit for Grandfathered Participants in Governmental Plans Which Followed 401(a)(17) Limits (With Indexing) on July 1, 1993 $400,000 $395,000 $395,000 $385,000 Highly Compensated Employee 414(q)(1)(B) $120,000 $120,000 $120,000 $115,000 Key employee in top heavy plan (officer) $175,000

Using Public Policy to Create IRA Irony

Using Public Policy to Create IRA Irony

October 26, 2016

Authored by: benefitsbclp

confusionYou might recall that the Department of Labor (DOL) took the position earlier this year that it had to protect individual retirement accounts and annuities as well as IRA owners by extending certain ERISA protections to them. In its promulgation of the amended investment advice regulation (otherwise known as the fiduciary rule) and the related prohibited transaction exemptions, it extended its reach deep into parts of the individual retirement plan structure where it had not ventured before.  (Its authority to do so is presently the subject of numerous lawsuits.)   It did so contending that public policy requires it to protect the IRAs and IRA owners from its perceived conflicts of interest emanating from the investment advisory and sales arms of financial services organizations.

Clouds, With A Nearly 100% Chance of a Business Associate Agreement

HHScloud recently posted guidance on its website addressing HIPAA’s approach to cloud computing.  Basically, any time a cloud service provider has electronic protected health information (ePHI), it’s a business associate.  This is true even if the cloud provider only stores encrypted ePHI and even if the cloud provider does not have the encryption key (and therefore, in theory, could not access the data).  This means that both health plans and their business associates who use outsourced cloud computing services must have business associate agreements with those services.

At first blush, this might seem like it doesn’t directly touch the health plan, but cloud computing can take many forms. For example, if your company has an off-site data server that is managed by a third party and ePHI is stored

IRS Overhauls the Retirement Plan Correction Program

IRS Overhauls the Retirement Plan Correction Program

October 20, 2016

Authored by: Katharine Finley and benefitsbclp

old-way-new-wayWith the looming end of the determination letter program as we know it, the IRS has issued an updated Revenue Procedure for the Employee Plans Compliance Resolutions System (EPCRS). Released on September 29, 2016, Rev. Proc. 2016-51 updates the EPCRS procedures, replaces Rev. Proc. 2013-12 and integrates the changes provided in Rev. Proc. 2015-27 and Rev. Proc. 2015-28. The updated revenue procedure is effective January 1, 2017 and its provisions cannot be used until that date. Rev. Proc. 2013-12, as modified by Rev. Proc. 2015-27 and Rev. Proc. 2015-28, should be used for any corrections under the EPCRS for the remainder of 2016. Highlights from the new revenue procedure are outlined below.

Changes

  • Determination Letter Applications. Determination letter applications are no longer

PBGC Proposed Rule May Offer DC Plans New Tool for Finding Missing Participants

where-are-youFor many years, the PBGC has been helping reunite missing participants with their benefits under single-employer defined benefit plans. Now, a new PBGC proposed rule may open up the program to missing participants under other terminated plans.

Under this proposed rule, terminated defined contributions plans may choose to transfer benefits of missing participants to the PBGC or to establish an IRA to receive the transfer and send information to the PBGC about the IRA provider.   The PBGC will attempt to locate the missing participants and add them to a searchable database. The PBGC notes that once the program is established, it may issue guidance making the reporting requirement mandatory for defined contribution plans as authorized under section 4050 of ERISA.

The PBGC will accept the transfer of accounts of

EEOC Clarifies ADA and GINA Wellness Incentive Rules

stethoscope-and-dollar-billsWhile the litigation over wellness programs rages on, the EEOC is still marching forward with the implementation of its wellness rules that we wrote about previously.  As most people in the wellness space are aware, the EEOC’s rules under ADA and GINA do not align completely with the HIPAA wellness rules, particularly on the issue of the amount of the incentive.  The ADA and GINA rules apply to all wellness programs, whether participation-only or health contingent, and generally limit the incentive that is available to 30% of the cost of self-only coverage.

One open question under the ADA and GINA rules was how to calculate the incentive when an employer offers multiple tiers of coverage (e.g. Gold, Silver, Bronze) under a health plan. The ADA and GINA rules address the calculation

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