United States: 2009-2010 Regulatory Plans for Employee Benefits Are Published

Originally published December 14, 2009

In recent days, the principal regulators of U.S. employee benefits have published their guidance plans for the coming months.

• The U.S. Treasury and Internal Revenue Service released their joint 2009-2010 Priority Guidance Plan, often informally referred to as the IRS Business Plan.
• The U.S. Department of Labor (DOL) issued its Fall 2009 Semi-Annual Regulatory Agenda. This publication takes the form of a Federal Register notice to comply with certain administrative requirements and the agenda itself, available on the DOL Web site with most entries supported by a fact sheet.

TAX GUIDANCE

The IRS Business Plan addresses 72 items generally related to a variety of employee benefit arrangements. The Plan suggests, for the current cycle, an emphasis on guidance other than in the form of regulations. The priority guidance projects for retirement plans and other forms of employee benefits include the following. (Some new initiatives are carried over from prior cycles; section references are to Internal Revenue Code provisions.)

Retirement Plans

• Guidance on group trusts under Rev. Ruls. 81-100 and 2004-67
• Notice on cumulative list of changes in plan qualification requirements
• Guidance on various international tax issues related to tax-favored retirement plans
• Guidance relating to lifetime income from defined contribution plans (This is a joint project with DOL; see the further summary below.)
• Guidance relating to certain annuity distributions from defined benefit pension plans
• Notice on the definition of readily tradable securities for employee stock ownership plans (ESOP)
• Announcement on the GUST pre-approved defined benefit program
• Guidance on § 403(b) plan terminations
• Revenue procedure on § 403(b) prototype program
• Final and proposed regulations addressing hybrid plan issues under § 411(a)(13) and § 411(b)(5), as added by the Pension Protection Act of 2006 (PPA)
• Guidance on governmental plan status under § 414(d)
• Guidance on procedures for ruling requests under § 414(e) for church plans
• Notice on certain retirement plan provisions of the Heroes Earnings Assistance and Relief Tax Act of 2008
• Guidance on eligible combined plans under § 414(x), as added by the PPA
• Update of revenue procedure on multiemployer plan amortization extension requests
• Final regulations under § 430, the minimum funding rules for defined benefit plans, as added by the PPA
• Proposed regulations under § 432 (multiemployer plans in endangered or critical status) and related excise taxes under § 4971(g), as added by the PPA
• Guidance under § 101(j) of the Employee Retirement Income Security Act of 1974 (ERISA) regarding notice requirements applicable to single-employer plans that become subject to funding-based benefit limitations as added by the PPA
• Guidance on distributions from § 457(b) plans for unforeseeable emergencies
• Proposed regulations on certain reporting requirements for qualified plans

Executive Compensation

• Proposed regulations under § 83 to incorporate the holding in Rev. Rul. 2005-48
• Final regulations under § 274 (limiting the deductibility for personal use of corporate aircraft)
• Guidance on § 409A correction program
• Guidance on the application of § 409A(b) (regarding deferred compensation funded through a rabbi trust in certain situations)
• Final regulations on income inclusion under § 409A
• Guidance under § 457(f) on ineligible plans
• Guidance under § 457A (regarding certain offshore deferred compensation)

Health Care And Other Benefits

• Guidance on applying § 105(h) nondiscrimination rules to self-insured retiree medical plans
• Notice on a sample cafeteria plan under § 125
• Final regulations on cafeteria plans under § 125
• Proposed regulations under Treas. Reg. § 1.125-4 on change in status
• Revenue ruling on the applicability of § 162(l) to COBRA premiums
• Proposed regulations under § 162(m) on the transition relief under Treas. Reg. § 1.162-27(f)(1)
• Guidance under § 419A
• Guidance on the employee retention credit under § 1400R
• Guidance under § 4980B regarding calculation of the applicable premium for COBRA continuation coverage
• Proposed regulations under § 4980G on interaction of § 4980G and § 125 with respect to comparable employer contributions to employees' HSAs
• Regulations under § 9812, as amended by the Mental Health Parity and Addiction Equity Act of 2008

ERISA GUIDANCE

DOL's Agenda covers 19 guidance projects related to employee benefits, including the following new initiatives in the order they are scheduled to issue. (In the ordinary course, dates projected in the Agenda may prove ambitious.)

• Lifetime Income Options For Participants And Beneficiaries In Retirement Plans: In January 2010, DOL plans to publish a request for information (RFI) asking 37 questions to solicit public commentary on how to enhance retirement security for all workers by reducing the chances that workers will run out of funds during their retirement years. This project is highlighted as a major initiative.
• Prohibited Transaction Exemption For Provision Of Investment Advice To Participants In Individual Account Plans: Following up on its withdrawal of the regulation finalized in the last days of the Bush Administration, DOL plans in February 2010 to propose a new regulation to implement the PPA statutory exemption for investment advice provided to plan participants.
• Definition Of "Fiduciary" – Investment Advice: In June 2010, DOL plans to propose a regulation to amend the current regulatory definition of "fiduciary" to include more persons, such as pension consultants, as fiduciaries.
• Annual Funding Notice For Defined Benefit Plans: In August 2010, DOL plans to propose a regulation that would require defined benefit pension plan administrators to provide workers with detailed information of their plan's funded status in an annual notice, written in a manner that can be understood by the average worker.
• Health Care Arrangements Established By State And Local Governments For Non-Governmental Employees: In September 2010, DOL plans to propose a regulation that would clarify when a health care arrangement established by a state or local government that covers private sector employees does not constitute an "employee welfare benefit plan" for purposes of ERISA.
• Periodic Pension Benefit Statements: Also in September, DOL plans to propose a regulation in requiring plan administrators to automatically furnish timely benefit statements to plan participants.

As to regulations already proposed, the Agenda projects the following timetable for finalizing those projects:

Following the release of the written Agenda, Phyllis Borzi, Assistant Secretary of DOL's Employee Benefits Security Administration, described in an online Q&A session the following additional regulatory items on which DOL is working:

• Final rules on the timing and issuance of qualified domestic relations orders (QDRO), expected in April 2010.
• Additional guidance on Michelle's Law.
• Transition guidance on the new Form 5500 annual reporting rules for § 403(b) plans.

© 2010 Sutherland Asbill & Brennan LLP. All Rights Reserved.

This article is for informational purposes and is not intended to constitute legal advice.