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To expedite distribution of retirement assets from companies in Chapter 7 bankruptcy proceedings, the U.S. Department of Labor wants to allow bankruptcy trustees to use its Abandoned Plan Program. This program establishes a process to terminate abandoned plans so that plan participants and beneficiaries gain quicker access to their benefits; currently, however, bankruptcy trustees do […]
Even as the IRS announces it plans to issue guidance on the use of smartcards with qualified transportation fringe benefits, public comments on such guidance include allegations of impropriety from one vendor. The IRS asked for input on whether it should issue such guidelines (see related story) last May. Thompson Information Services requested copies of […]
Pension liabilities of the 100 largest U.S. corporate defined benefit pension plans decreased by $28 billion in November, while assets increased by $5 billion, bringing the Milliman 100 Pension Funding Index funded status deficit to $466 billion and the funded ratio of 74 percent. The November ratio still lags the year-end 2011 value of 78.7 percent, […]
Large corporations thinking about transferring hefty defined benefit plan payouts to insurance companies for them to manage now have judicial support for that approach. A federal judge in Texas has denied a bid by retired Verizon Communications executives to block the company from making a proposed shift off its books of $7.5 billion in pension […]
Typically, interference with an employee’s COBRA coverage rights raises legal claims under ERISA; however, employers should take heed that in some instances other federal laws are invoked. Recently, an employer was found to have violated federal labor law when it engaged in an unlawful lockout of union employees that included the cancellation of their health […]
Employer sponsors of health plans must count members in retiree-only plans and COBRA-eligible plans for purposes of paying into health reform’s Patient-Centered Outcomes Research Institute. Furthermore, employees covered under two or more “specified” policies can be counted (and taxed) more than once. The IRS final rule on employer payment of PCORI fees disregarded employer requests to exclude […]
Here’s a reminder that for COBRA compliance purposes, small employers must count their employee population differently if they are under common control. Recently, an employer was sued for providing just three, rather than 18, months of COBRA coverage. Because it had a workforce of fewer than 20 employees, the employer tried to fend off those […]
Sometimes an employer may delay transfers of payroll deductions to employees’ retirement accounts. That’s a breach of fiduciary responsibility, but a recent decision by the U.S. District Court for the District of Massachusetts may offer them some comfort. Managing retirement plan administration can be a burden for busy small business owners who aren’t financial professionals. […]
Employers that sponsor health plans are bracing themselves for a significant tax hit under health reform. Health reform’s transitional reinsurance program, which will require insurers and self-funded plans to pay billions of dollars to partly reimburse commercial insurers writing individual policies for patients with very high medical costs, imposes large costs on employers to further […]
An employer/plan administrator continues to get an expensive lesson on the risks of having both inadequate COBRA notice procedures and poor explanations of how those procedures work. An “inefficient, unwieldy” notice process — coupled with evasive and contradictory answers from employees on why a qualified beneficiary did not receive a COBRA election notice — led […]