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WHA Financial Solutions' Compliance
Corner newsletter contains valuable information on timely compliance
and regulatory issues. Each newsletter is archived by date at www.whafs.com.
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EBSA Issues Proposed
Model Notice for "Critical Status" Multiemployer Pension Plans
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The Pension Protection Act of
2006 requires that multiemployer defined benefit pension plans notify
participants when the plan is in critical status and that benefits may be
reduced or eliminated. On March 25, 2008, the Employee Benefits Security
Administrator (EBSA) issued a Proposed Model Notice of Critical Status.
The notice and proposed regulations are not effective until finalized,
but plans may begin using the notice in the interim.
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New
FMLA Poster Insert for Military Leave Available for Use
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The
Department of Labor (DOL) has issued an insert that may be used until a
revised comprehensive version of the FMLA Poster is available. The insert
contains information on the new Military Family Leave provisions.
According to the DOL, employers are not required to post the insert,
although they highly recommend it.
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Deadline Extended for
Retiree Drug Subsidy Reconciliation
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Plans
participating in the Retiree Drug Subsidy Program have been granted a three
month extension for their payment reconciliation deadline. The extension
applies to plan years ending in 2006 or first quarter 2007. Please see
the Centers for Medicare and Medicaid Services link below for the revised
schedule.
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IRS Releases 2007 Version of Form 8839 for Determining
Adoption Credit
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The Internal Revenue Service (IRS) has released the 2007
Form 8839, which has been updated to reflect the 2007 dollar limits. This
form is used to calculate the amount of adoption credit, as well as to
calculate the amount of any employer-provided adoption benefits that may
be excludable from an employee's gross income if furnished pursuant to an
adoption assistance program.
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IRS Clarifies When DCAP or DCTC Tax Credits may be Used
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On February 8, 2008, the IRS issued Chief Counsel Advice
(CCA) 200812024, which provides guidance on when a "qualifying
relative" or a "qualifying child" may be used by a
taxpayer to claim the Dependent Care Tax Credit (DCTC) or in a Dependent
Care Assistance Program (DCAP). CCAs are written advice from the IRS
Chief Counsel issued to field employees, and even though they may not be
used or cited as precedent, they give quality insightful information.
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IRS to Begin Issuing Opinion and Advisory
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Pre-approved defined contribution plans that submitted their
plan by January 31, 2006 to comply with the Economic Growth and Tax
Relief Reconciliation Act of 2001 (EGTRRA) should soon receive their
opinion or advisory letter from the IRS. The IRS recently announced in
Announcement 2008-23 that it will begin issuing opinion and advisory
letters on March 31, 2008.
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Plan Document Showed Employer Endorsement of Voluntary
Plan
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In order for a voluntary plan to be exempt from ERISA, it must
meet the voluntary safe harbor criteria found in the DOL regulations. The
plan must not be endorsed by the employer and must have minimal employer
involvement. In Chase v. Prudential Ins. Co. of America, the U.S.
District Court Eastern Division of New York ruled that a voluntary long
term disability plan was subject to ERISA because the employer had
endorsed the program with a written plan document stating that the plan
was an ERISA plan and that the employer was the plan sponsor and plan
administrator.
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WHA Financial
Solutions, Inc.
800-362-7121
or 608-274-1820
The
information included in WHA Financial Solutions' Compliance Corner is
intended for general information purposes only. This information
does not and is not intended to constitute legal advice. Any
decisions whether to implement these ideas should be made by the reader
in consultation with professional financial, tax, and legal counsel.
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