Retirement Plans
Employer-sponsored retirement plans are a fundamental benefit offering of most companies. Most of these plans are “tax-qualified,” making employers and employees eligible for favorable tax treatment of contributions made to those plans. While 401(k) plans are the most common retirement planning vehicle utilized by employers, many employers maintain other retirement plans, including traditional defined benefit plans, cash balance pension plans, profit sharing plans, employee stock ownership plans, plans for smaller employers (SEPs and SIMPLE IRAs), plans for non-profit or governmental employers (457(b) and 403(b) plans), and even collectively bargained plans.
Each employer-sponsored retirement plan must comply with applicable law, which, depending on the plan, may include ERISA, the Internal Revenue Code, rules and regulations adopted by the Department of Labor, and requirements of the Pension Benefit Guaranty Corporation.
Regardless of the type of retirement plan or plans an employer sponsors, there are a myriad of issues involving the establishment and ongoing operation and administration of these plans. Jackson Walker employee benefits and executive compensation attorneys are familiar with these complex issues and address them on a regular basis. Common issues include but are not limited to:
- Choosing or adjusting plan design and features
- Resolving administrative questions, including issues involving eligibility, compensation exclusions, vesting, plan loans, and hardship withdrawals
- Ensuring completion of annual compliance testing and reporting
- Addressing documentation and operational errors through IRS or DOL correction programs
- Communicating with employees and handling claims and appeals
- Adopting custom-designed plans which implement integrated age-weighted or cross-testing features to maximize benefits
- Resolving controlled group and affiliated service group concerns
- Contracting with service providers and managing service provider transitions
- Selecting and monitoring plan investments through retirement plan committee structure or third party consultant
- Reducing financial statement fluctuation risk from defined benefit pension plans
- Responding to government agency investigations or audits
- Performed analysis for large diversified businesses in assessing controlled group responsibilities for employee benefits
- Advised employers on transitions between retirement plan providers, including review of plan document changes and service agreements
- Drafted complex defined benefit pension plans for governmental entities
- Developed self-correction methodology to correct significant operational error and assisted with plan termination for privately-held business
- Negotiated pension changes with collective bargaining units
- Advised closely held business on documentation failures in connection with a rollover as a business startup (ROBS) arrangement
- Advised clients in connection with significant plan design changes, including perform protected benefits analysis
- Facilitated plan transitions in connection with corporate transactions, including plan mergers and terminations
- Represented plan sponsors in IRS team audits of pension and defined contribution plans
- Advised clients on fiduciary liability with respect to retirement plan administration and developed related “checklist” for a fiduciary risk review
- Converted various pension plans to different types of retirement plans
- Advised not-for-profit organization on method to correct excess deferrals made to its 457(b) plan
- Corrected complex pension plan funding issues for privately-held business
- Advised client on segregated business units for nondiscrimination testing as qualified separate lines of business (QSLOBs)
July 20, 2021
Insights
Qualified Retirement Plan Correction Program Expanded and Revised
By Greta Cowart
The Internal Revenue Service updated and expanded the ability to correct plan operational and document defects with the new and improved Employee Plans Compliance Resolution System (Rev. Proc. 2021-30) (EPCRS). Issued and effective generally as of July 16, 2021, the EPCRS revises and expands the prior version of the same program in a number of ways, and continues its goal to encourage voluntary corrections with limited fees while protecting employees and their retirement benefits. This article highlights some of the more significant changes for employers sponsoring qualified retirement plans.
