The COVID-19 pandemic that ravaged 2020 spurred workers to take advantage of telemedicine and mental health benefits more frequently, and demand for those services isn’t expected to wane in the near future, experts say.
A recent article in Law360 examined three ways the pandemic had an impact on employee benefits over the past year, with McDermott partner Jacob Mattinson weighing in.
In recent guidance, the Department of Labor clarified the retirement plan standards for environmental, social and corporate governance (ESG) investing without mentioning the term ESG. The new guidance provides that, when selecting and monitoring plan investments, an Employee Retirement Income Security Act (ERISA) fiduciary must never sacrifice investment returns, take on additional investment risk or pay higher fees to promote non-pecuniary benefits or goals.
Teal Trujillo, an incoming associate in our Chicago office, also contributed to this On the Subject.
The Internal Revenue Service (IRS) recently issued practical and helpful guidance in a question-and-answer format for tax-qualified retirement plans and for an Individual Retirement Arrangement (IRA), regarding the legislative changes under the Setting Every Community Up for Retirement Enhancement Act of 2019 (the “SECURE Act”) and the Bipartisan American Miners Act of 2019 (the “Miners Act”).
Teal Trujillo, an incoming associate in our Chicago office, also contributed to this On the Subject.
The Internal Revenue Service (IRS) recently announced the cost-of-living adjustments to the applicable dollar limits for various employer-sponsored retirement and welfare plans for 2021. Nearly all of the dollar limits currently in effect for 2020 will remain the same, with only a few amounts experiencing minor increases for 2021.
With mass layoffs commonplace during the COVID-19 pandemic, employers asked the Internal Revenue Service for advice on how to deal with the partial termination rule relating to employer contributions to their employees’ 401(k) workplace retirement accounts.
It’s an obscure issue, but it’s a big deal for the employees that it affects: It could mean thousands of dollars more credited to an employee’s 401(k) account. It’s also important that employers get it right. In a recent article by Forbes, McDermott Will & Emery partner Jeff Holdvogt advises that IRS auditors can catch this issue looking back at prior years.
“This is a complicated rule, and it’s not top of mind, so we could absolutely see employers realizing, ‘Hey, it turns out we incurred a partial termination. We have to go back and provide additional vesting,’” Holdvogt says.
The Coronavirus Aid, Relief and Economic Security (CARES) Act, passed by US Congress in March in response to the COVID-19 pandemic, permits a “qualified individual” to increase the amount they can borrow from a 401(k). Such individuals may borrow 100% of their account balance up to $100,000 (less any outstanding loans).
The deadline for taking enhanced loans is September 22. In a recent article by Forbes, McDermott Will & Emery partner Jeff Holdvogt highlights some of the tax implications individuals should consider.
What do unused paid-time-off (PTO) days, student loan debt and the coronavirus have in common? An opportunity for employers to provide financial relief to employees who are increasingly putting off vacations due to the COVID-19 pandemic.
In a recent article by the Society of Human Resource Management, Jeff Holdvogt, a partner in McDermott’s Chicago office, explained that more employees, particularly Millennials, are telling employers that benefits to help pay off student loan debt would go a long way to attracting and retaining them.
Prior to the pandemic, ultra-low unemployment at roughly 3.3% put a spotlight on ‘lifestyle benefits’ for employees such as gym memberships and pet sitting. When the COVID-19 crisis hit, the focus immediately shifted for many plan sponsors.
Some employers are now offering high-deductible health plans (HDHPs) paired with health savings accounts (HSAs). Scaling back on company matches to 401(k) plans and contributions to profit sharing accounts are two other areas where employers are trying to save money, said Lisa Loesel, an employee benefits partner at McDermott.
“Depending on what kind of plan they have and the terms set forth for them, we have seen plan sponsors delay the timing of their contributions, change the amount, move from a fixed to a discretionary amount or even cut their contributions indefinitely,” Loesel said in a recent article for PLANSPONSOR Magazine.
Among sponsors offering a pension plan, more are de-risking their plans. “The market happens to be favorable for doing this right now,” she says.
Imagine if you were playing on a baseball team and the opposing players argue that you are violating the rules of soccer. That’s what it’s like when private parties and the Department of Labor (DOL) challenge Employee Stock Ownership Plan (ESOP) valuations. Plaintiffs play a very different valuation ballgame, which confounds experts who go up against them in a dispute involving allegations that an ESOP paid more than “fair market value” for stock of the sponsor company. In a recent webinar, McDermott attorney Richard Pearl discussed valuation concepts and some fundamental issues under the Employee Retirement Income Security Act.
Earlier this year, the US Pension Benefit Guaranty Corporation (PBGC) issued a final rule, modifying PBGC regulations that apply to defined benefit pension plans. Among those changes were revisions to: (i) the reportable event notification requirements; (ii) annual financial and actuarial information (Form 4010) reporting; (iii) single-employer plan termination rules; and (iv) the premium rate calculation rules. The rule was generally effective on March 5, 2020, but some provisions have different applicability dates.
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