ERISA News

The Department of Treasury and Small Business Administration have jointly announced the reopening of the Paycheck Protection Program the week of January 11. Community financial institutions will begin offering First Draw PPP Loans Monday, January 11, and Second Draw PPP Loans starting Wednesday, January 13. Loans will be available to all participating lenders soon after.

The Pension Benefit Guaranty Corporation (PBGC) has issued final regulations that amend earlier agency guidance on the determination of withdrawal liability when a participating employer withdraws from a multiemployer (union) defined benefit pension plan. The regulations being amended are entitled, Allocating Unfunded Vested Benefits to Withdrawing Employers and Notice, Collection and Redetermination of Withdrawal Liability.

Final regulations, entitled Independent Contractor Status Under the Fair Labor Standards Act, issued by the Department of Labor’s Wage and Hour Division, are published in today’s Federal Register. They are described as being intended to clarify distinctions between “employee” and “independent contractor” status. The guidance was issued in proposed form in September 2020. Accompanying the final regulations is an agency news release.

The IRS has issued News Release MS-2021-01, announcing the postponement of certain tax-related deadlines for Mississippi victims of Hurricane Zeta, for hurricane-related events beginning October 28, 2020. In addition to extending certain tax filing and tax payment deadlines, the relief includes completion of many time-sensitive, tax-related acts described in IRS Revenue Procedure 2018-58 and Treasury Regulation 301.7508A-1(c)(1), which include filing Form 5500 for retirement plans, completing rollovers, making retirement plan loan payments, etc.

Published in today’s Federal Register are IRS final regulations that implement a provision of the 2017 Tax Cuts and Jobs Act (TCJA) that provides an extended period—beyond the normal 60 days—to roll over amounts of certain retirement plan loans that are offset and treated as distributions. These final regulations were released in pre-publication form on December 8, 2020.

The Department of Labor’s (DOL’s) Wage and Hour Division has issued an update to its question-and-answer guidance on paid employee leave under provisions of the Families First Coronavirus Response Act (FFCRA). Specifically, this update includes the addition of the following.

The IRS has posted at its website the 2021 tax year version of Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., and Form 5498, IRA Contribution Information. As the title implies, Form 1099-R is filed by financial organizations and service providers to report to account owners and the IRS distributions from tax-qualified retirement savings arrangements. Form 5498 more narrowly reports IRA-related information—including contributions to IRAs, SEP and SIMPLE IRA employer plans, end-of-year fair market values, rollovers, conversions, recharacterizations, etc.

Today is the last day for eligible taxpayers to take IRA and employer-sponsored retirement plan distributions that qualify for special tax benefits under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This legislation was enacted in March 2020 as a response to the coronavirus (COVID-19) pandemic. There has been some industry and media confusion over whether more recent pandemic relief legislation has provided an extended opportunity to qualify for such benefits, but it has not.

Final regulations entitled Independent Contractor Status Under the Fair Labor Standards Act, issued by the Department of Labor’s Wage and Hour Division, have been received by the federal Office of Management and Budget (OMB). The OMB provides final review of regulatory guidance before its official release. Generally, only if found to be in need of revision, is such guidance returned to the originating agency for changes. Unless this proves to be the case, official release of these final regulations could be imminent.

On December 21, 2020, Congress passed additional measures to provide relief from the widespread economic effects of the coronavirus pandemic. On December 27, 2020, the president signed the bill into law. While both houses of Congress have been working on various provisions since the CARES Act was enacted last March, no agreements were reached until now. The coronavirus provisions are contained in a larger spending bill that funds the federal government through next September. The bill, entitled the Consolidated Appropriations Act, 2021 (CAA), contains relief for various industries, small businesses, and individuals. Although there is no broad employee benefit relief, the items discussed below may interest those that work with employers and with employer-sponsored plans.