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2016 Qualified Plan Limits

2016 Qualified Plan Limits

October 27, 2015

Authored by: Julie Wagner and Lisa Van Fleet

They’re here—the 2016 IRS plan limitations-but they’re not new. Because the change in the cost-of-living index doesn’t trigger an adjustment, the qualified plan limits identified here do not change in 2016. See the chart below to see the 2016 limits as well as a summary of the limits over the preceding three years. Note that certain other limitations do change for 2016 (e.g. certain IRA limits), but not the qualified plan limits reported here.

Type of Limitation 2016 2015 2014 2013 Elective Deferrals (401(k), 403(b), 457(b)(2) and 457(c)(1)) $18,000 $18,000 $17,500 $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 $5,500 $5,500 SIMPLE 401(k) or regular SIMPLE plans, Catch-Up Deferrals $3,000 $3,000 $2,500 $2,500 415 limit for Defined Benefit Plans $210,000 $210,000 $210,000 $205,000 415 limit for Defined Contribution Plans $53,000 $53,000 $52,000

Supreme Court’s Same-Sex Marriage Ruling in Obergefell: Effect on Benefit Plans

Grooms Wedding RingTwo years after recognizing same-sex marriages for purposes of federal law, the U.S. Supreme Court has gone a step further, requiring that all states recognize same-sex marriages as valid if they were valid in the jurisdiction where they were performed.  Further, states are required to license same-sex marriages no differently than opposite sex marriages.  In short, the Supreme Court struck down existing state bans on same-sex marriage.

Effect on 401(k) Plans and Other Qualified Plans: 401(k) and other qualified retirement plans are not impacted by Obergefell, since the previous Windsor decision, along with guidance issued by the IRS following Windsor, already required qualified retirement plans to recognize same-sex spouses.  Following Windsor, same-sex marriages were to be treated no differently than opposite-sex marriages for all purposes, including automatic survivor benefits (spousal annuities),

Proposed Rule Would Make No-Fault Clawbacks Mandatory for Public Companies

Guy GrabbingLast week the Securities and Exchange Commission (SEC) proposed a new Rule 10D-1 that would direct national securities exchanges and associations to establish listing standards requiring companies to adopt, enforce and disclose policies to clawback excess incentive-based compensation from executive officers.

  • Covered Securities Issuers. With limited exceptions for issuers of certain securities and unit investment trusts (UITs), the Proposed Rule 10D-1 would apply to all listed companies, including emerging growth companies, smaller reporting companies, foreign private issuers and controlled companies. Registered management investment companies would be subject to the requirements of the Proposed Rule only to the extent they had awarded incentive-based compensation to executive officers in any of the last three fiscal years.
  • Covered Officers.   The Proposed Rule would apply to current and former Section 16 officers, which

“King” of the Road

“King” of the Road

July 6, 2015

Authored by: Chris Rylands and Lisa Van Fleet

ACAIn Roger Miller’s 1964 hit by the above name, he tells the tale of “a man of means by no means,” a man just scraping to get by. While he may not have a phone, a pool, pets, or cigarettes (and really, what does he need that last item for anyway?), after the Supreme Court’s 6-3 decision on June 25, however, such a man might be able to secure a premium tax credit to help pay for health insurance (yes, we realize he’d probably be Medicaid eligible, but just work with us here).

But what does the ruling mean for employers? At first, it might appear that it doesn’t mean very much; life under the Affordable Care Act will continue to move along much as it has for the last few

Tibble: Much Ado About Nothing?

OMG HeadlineEveryone seems to be talking about last month’s Supreme Court decision in Tibble v. Edison International, even though its holding wasn’t all that momentous. But I’m not complaining. As an ERISA lawyer, I love when ERISA developments hit mainstream news because, for at least one brief fleeting moment, there is a connection between the ERISA world in which I dwell and the rest of the world.

That said, some question whether Tibble warrants the level of attention it is generating. Some say Tibble merely affirms a well-known principle of ERISA law—that is that an ERISA fiduciary has an ongoing duty to monitor plan investments. Others see Tibble as a reflection of enhanced scrutiny of the duty to monitor plan investments, as well as recognition of a statute of limitations that facilitates enforcement of that

Are You My Fiduciary?

Are You My Fiduciary?

May 5, 2015

Authored by: Lisa Van Fleet

Baby DuckHow many of you remember the classic children’s’ story “Are you My Mother?” by P.D. Eastman?  In that delightful story, we follow a confused but determined baby bird who is looking for his mother.  He sets off to find her, asking various creatures along the way (a dog, a cow, a plane) whether they are his mother, and in the end happily finds his way beneath her protective wing.

The parallels between this story and the proposed Conflict of Interest Regulations are clear (at least to some of us).  The proposed guidance examines the various service providers encountered by retirement plans and IRA owners, as well as their participants and beneficiaries (“retirement investors”) and evaluates whether or not such service providers are fiduciaries who offer a protective wing.  Moreover, the guidance expands

DOL’s Expansion of the Definition of Investment Advice (or “Fiduciary”)

Who's Holding Your Piggy Bank?Acting on reaction to a proposed and subsequently withdrawn regulation from October 2010 and attempting to address concerns expressed by both interested parties to the initial proposed regulation and an economic analysis by the Council of Economic Advisors (that the Investment Company Institute considers flawed), the Department of Labor has issued a new proposed regulation expanding the definition of investment advice. The DOL’s stated purpose in doing so is to protect retirement plan and IRA investors from practices engaged in by some advisors whose interest in providing investment advice is conflicted and not in the best interest of the participant or IRA owner.

The proposed rule does not expand the definition of fiduciary per se, but instead it expands the areas of advice that are rendered by

EEOC Finally Lets the Wellness Cat Out of the Bag

WellnessOn April 16, the Equal Employment Opportunity Commission (the “EEOC”) finally gave a peek into its thinking about what constitutes a “voluntary” wellness program under the Americans with Disabilities Act (the “ADA”). Recall that, while there are extensive wellness rules under HIPAA and ACA for these types of programs, there was always a gray area with regard to whether these programs were considered “voluntary” for ADA purposes. The EEOC recently started suing companies over their programs and was heavily criticized for doing so without issuing any guidance (aside from a couple of non-binding opinion letters). These proposed regulations are the beginnings of the guidance the critics have requested. While not binding, they are a good starting point for understanding where the EEOC may end up.

Under the proposed rules,

ACA Reporting and Disclosure: The Complexity Continues (Part 3 of 3)

Welcome back to the third and final segment of our 3-part discussion of the ACA reporting and disclosure forms. In Part 1, we focused on the basics: identifying the various forms, the reporting entities (focusing on employer as filers), and deadlines for filing. In Part 2, we discussed the differences between the draft and final forms. In Part 3 we will focus on the penalties for failing to file. For purposes of the following discussion, we will assume the reporting entity is an employer.

Penalties for Non-Compliance: The penalty for failure to comply with the ACA reporting and disclosure requirements is substantial. A separate penalty is assessed for each failure to file a return and each failure to provide information statements on a timely and accurate basis.

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ACA Reporting and Disclosure: The Complexity Continues (Part 2 of 3)

462876067Welcome back to Part 2 in our 3-part discussion of the ACA reporting and disclosure forms. In Part 1, we focused on the basics: identifying the various forms, the reporting entities (focusing on employer as filers), and deadlines for filing. In Part 2, we will discuss the differences between the draft and final forms. In Part 3 we will focus on the penalties for failing to file.

Deviations from Draft Form: The forms themselves are unchanged from previous drafts. Instructions for the “B Forms” are likewise nearly the same. One minor change is that employers may list a TIN for an employee who does not have a SSN available.

Instructions for the “C Forms” include several changes and clarifications worth noting:

  • As with the 1095-B, a TIN may be used
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