Employee Benefits Legal Resource Site


Carol V. Calhoun

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New article: Section 403(b) Plan Design and Compliance
(Posted on December 5, 2018 by )


A new article, Section 403(b) Plan Design and Compliance, discusses the rules that apply when eligible tax-exempt organizations establish tax-sheltered annuities, custodial accounts, or retirement income accounts, as described in Section 403(b) of the Internal Revenue Code (403(b) plans).

This article addresses the following topics:

Read more.

New Article: Pre-Approved 403(b) Plans
(Posted on November 29, 2018 by )


Internal Revenue ServiceIn March 2017, the Internal Revenue Service (IRS) began issuing advisory and opinion letters to the first preapproved retirement programs described in Internal Revenue Code (I.R.C.) § 403(b) (403(b) plans). A new article, Pre-Approved 403(b) Plans, discusses preapproved 403(b) plans, including their advantages, legal pitfalls, and other issues that an eligible employer may consider when determining whether to convert its existing 403(b) plan into a preapproved plan.

The major topics are:

Read more.

2018 IRS Benefits & Contributions Limits Announced
(Posted on November 1, 2018 by )


irsOn November 1, 2018, the IRS issued IRS Notice 2018-83, announcing the changes in pensions and benefits limits for 2019. The maximum limits on employee pretax contributions to 401(k), 403(b), and 457(b) plans (without catch-ups) increased from $18,500 to $19,000, the maximum limit on annual additions (primarily to defined contribution plans) rose from $55,000 to $56,000, and the maximum limit on benefits (when expressed as an annual benefit) under a defined benefit plan rose from $220,000 to $225,000. A variety of other limits, including the limits on annual compensation taken into account and the compensation used in the definition of a key employee, also increased.

A chart showing details, and limits from 1996 to 2019, can be found at this link.

New Article: Nonqualified Deferred Compensation Rules for Tax-Indifferent Entities (Section 457A)
(Posted on October 26, 2018 by )


Social Security Wage Base for 2019 Updated
(Posted on October 11, 2018 by )


SSALogoThe Social Security Administration has now announced that the wage base (the maximum amount subject to Social Security taxes) for 2019 will be $132,900.

A chart showing Social Security limits from 1996 through 2019 can be found at this link.

New article: Executive Compensation Arrangements for Tax-Exempt Organizations
(Posted on September 14, 2018 by )


Lexis Practice AdvisorTax-exempt organizations face special legal challenges in developing compensation packages for their executives. A new article published in the Lexis Practice Advisor provides practical guidance on developing benefits for executives of nonprofits.

This article is divided into the following main topics:

Read more.

2018 Supplement to the Governmental Plans Answer Book Published
(Posted on September 12, 2018 by )


The 2018 supplement to the Fourth Edition of the Governmental Plans Answer Book has now been published.

The 2018 Supplement to Governmental Plans Answer Book gives subscribers the most relevant, current, and practice-oriented answers to the issues faced daily by plan administrators, attorneys, actuaries, consultants, accountants, and other pension professionals as they navigate the requirements and procedures involved in administering their plans. The 2018 Supplement to Governmental Plans Answer Book examines the following significant changes and case law in this area and includes:

  • Recent state-level legislative developments affecting design, eligibility, and related issues (see Q 2:126) and investment, including divestiture (see Q 7:98) and fiduciary education requirements (see Q 7:32).
  • Law sources and practical points to consider in discerning whether a participant is allowed to make a beneficiary designation by electronic means (see Q 12:5.1).
  • Court decision that recognizes, even on interpleader, deference to a claims administrator’s discretionary authority (see Q 12:25).
  • Updated explanations about community-property laws (see Chapter 12).
  • How a provision in the Constitution of the United States and in many states’ constitutions might preclude applying a revocation-on-divorce statute to a beneficiary designation or contract made before the statute was enacted or took effect (see Q 12:54).
  • Citations for the laws of three states that do not end a person’s minor status at age 18 (see Q 12:57).
  • Recent court decision that an order that conditions a payment on whether the payee remains unmarried is not a qualified domestic relations order (see Q 13:10.1).
  • Information about state laws that restrict a plan-approved domestic relations order to provisions more restrictive than those allowed for a non-governmental plan’s qualified domestic relations order (see Chapter 13).
  • A 2018 ethics interpretation about a lawyer’s duties concerning the lawyer’s errors (see Chapter 13).
  • Updated explanations about same-sex marriage and domestic partnerships (see Chapters 12 and 13).
  • The Securities and Exchange Commission’s Regulation Best Interest applicable to broker-dealers that advise employee benefit plans (see Q 7:2).
  • Expanded coverage of cases in text cross-referenced to Appendix E, Recent Court Decisions of Interest Involving Governmental Plans (see Appendix E).

For more information on this book, written by Carol V. Calhoun, Cynthia L. Moore, and Keith Brainard, you can use the following links:

Description | Table of Contents | Purchase

New article: Pre-approved Plan Design and Compliance
(Posted on August 13, 2018 by )


Lexis Practice AdvisorWith the IRS cutting back on determination letters for individually designed plans, more and more employers are switching to pre-approved plans. An article recently published in the Lexis Practice Advisor discusses practical considerations involved with such plans. Topics include:

New Immigration Rules Create Issues for Employer Health Plans
(Posted on August 9, 2018 by )


Department of Homeland SecurityA leaked draft of Proposed Department of Homeland Security (“DHS”) regulations indicates that certain non-US citizens may be disadvantaged in extending or adjusting their immigration status if they obtain health insurance coverage through the Health Insurance Marketplace (“Marketplace”) set up under the Patient Protection and Affordable Care Act (“ACA”) or Medicaid, or obtain benefits under the Children’s Health Insurance Program (“CHIP”) for their dependents (even US citizen dependents). From an employee benefits perspective, the proposed rules have three effects on employers:

  1. Employees may have questions about whether they can or should switch coverage from the Marketplace or CHIP to the employer’s health plan.
  2. Employers are required to give notices to employees on hiring about the availability of health insurance through the Marketplace, and annually about the availability of CHIP. Employers may want to consider adding information to these notices regarding the potential impact on immigration of accepting either of these benefits.
  3. Employers that wish to retain non-US citizen employees may wish to improve health benefits (particularly for dependents) to discourage use of the Marketplace or CHIP.

The change in regulations would have a number of effects on employers who hire non-US citizens, particularly in instances in which the employer is sponsoring them (such as for an H-1B visa or a green card) which are beyond the scope of this post. However, this post discusses the specific impact on employee benefits of the proposed regulations, and potential employer responses to them. Read more.

New Article: Substantial Risk of Forfeiture
(Posted on July 25, 2018 by )


Lexis Practice AdvisorAn article recently published in the Lexis Practice Advisor, Substantial Risk of Forfeiture, discusses the concept of substantial risk of forfeiture (SRF) under sections 83, 409A, 457(f), 457A, and 3121(v)(2) of the Internal Revenue Code and the different consequences of the failure to achieve a SRF under each such section.

Topics covered are:

It is accompanied by a Substantial Risk of Forfeiture Comparison Chart, which summarizes the rules.