Recap of IRS Employee Plans 2011 1st Quarter Guidance

April 10, 2011

Keeping on top of the employee plan guidance published by the Internal Revenue Service (IRS) and other relevant agencies can be critical to efforts of plan sponsors, fiduciaries, administrators and other service provider’s ability to anticipate plan design or other actions needed to maintain compliance or manage other concerns.  The following is a recap of the more significant the IRS Employee Plan guidance published by the IRS between January 1 and March 31, 2011. 

  • Notice 2011-33, 2011-19 I.R.B.Updates for the corporate bond weighted average interest rate for plan years beginning in April 2011; the 24-month average segment rates; the funding transitional segment rates applicable for April 2011; and the minimum present value transitional rates for March 2011.
  • Notice 2011-22, 2011-12 I.R.B. 557Updates for the corporate bond weighted average interest rate for plan years beginning in March 2011; the 24-month average segment rates; the funding transitional segment rates applicable for March 2011; and the minimum present value transitional rates for February 2011.
  • Announcement 2011-21, 2011-12 I.R.B. 567This announcement designates Form 8955-SSA, Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits, as the form to be used to satisfy the reporting requirements of §6057(a) of the Code for plan years beginning on or after January 1, 2009, and sets forth the due dates for filing the form for the 2009 plan year and subsequent plan years. .
  • Notice 2011-19, 2011-11 I.R.B. 550: This notice provides guidance regarding when securities of the employer are readily tradable on an established securities market or readily tradable on an established market for purposes of certain provisions of the Internal Revenue Code relating to employer securities held by certain qualified retirement plans. .
  • Announcement 2011-16, 2011-7 IRB 500This announcement corrects a typographical error in Rev. Rul. 2011-3.
  • Rev. Rul 2011-7, 2011-10 I.R.B.This revenue ruling provides guidance clarifying how the section 403(b) plan termination provisions apply. .
  • Announcement 2011-8, 2011-5 IRB 446This announcement corrects an error in Rev. Proc. 2011-8 in the user fee schedule that applies to a non-mass submitter of a master or prototype (M&P) plan.
  • Notice 2011-13, 2011-9 I.R.B. 529Updates for the corporate bond weighted average interest rate for plan years beginning in February 2011; the 24-month average segment rates; the funding transitional segment rates applicable for February 2011; and the minimum present value transitional rates for January 2011.
  • Notice 2011-7, 2011-5 I.R.B. 437Updates for the corporate bond weighted average interest rate for plan years beginning in January 2011; the 24-month average segment rates; the funding transitional segment rates applicable for January 2011; and the minimum present value transitional rates for December 2010.
  • Notice 2011-3, 2011-2 IRB 263The notice provides guidance on the special rules relating to funding relief for single-employer defined benefit pension plans (including multiple employer defined benefit pension plans) under the Preservation of Access to Care for Medicare. Beneficiaries and Pension Relief Act of 2010 (PRA 2010), Pub. L. No. 111-192.
  • Rev. Rul. 2011-3, 2011-4 I.R.B. 326The covered compensation tables under Code §401 for the year 2011 are provided to determine contributions to defined benefit plans and permitted disparity.
  • Rev. Proc. 2011-4, 2011-1 I.R.B. 123Annual EP/EO revenue procedure on letter rulings.
  • Rev. Proc. 2011-5, 2011-1 I.R.B. 167Annual EP/EO revenue procedure on technical advice.
  • Rev. Proc. 2011-6, 2011-1 I.R.B. 195Annual EP determination letter revenue procedure.
  • Rev. Proc. 2011-8, 2011-1 I.R.B. 237Annual EP/EO revenue procedure on user fees.

For Help With These Or Other Risk Management Matters

If you need assistance in accessing, assessing or auditing,  updating or defending your employee benefit or compensation arrangements and practices in response to this recent guidance or with other labor and employment, employee benefit, compensation or internal controls practices, please contact the author of this update, attorney Cynthia Marcotte Stamer here or at (469)767-8872.

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 23 years of work helping employers; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; and others design, administer and defend innovative workforce, compensation, employee benefit  and management policies and practices. Her experience includes extensive work helping employers implement, audit, manage and defend wage and hour and other workforce and internal controls policies, procedures and actions.  The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer works, publishes and speaks extensively on wage and hour, worker classification and other human resources and workforce, employee benefits, compensation, internal controls and related matters.  She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters. Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.

About Solutions Law Press

Solutions Law Press™ provides business risk management, legal compliance, management effectiveness and other resources, training and education on human resources, employee benefits, data security and privacy, insurance, health care and other key compliance, risk management, internal controls and operational concerns. If you find this of interest, you also be interested reviewing some of our other Solutions Law Press resources including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information here.

©2011 Cynthia Marcotte Stamer.  Non-exclusive right to republish granted to Solutions Law Press.  All other rights reserved.


Defined Contribution Plans Investing In Publically Traded Employer Securities Face New Requirements

May 19, 2010

Employer and other sponsors, fiduciaries and administrators of 401(k) and other defined contribution pension plans that hold publically traded employer securities should review and update their plan documentation, communications and practices in response to new Internal Revenue Service (IRS) final regulations implementing new investment diversification requirements for these programs under Internal Revenue Code (Code) § 401(a)(35) and Employee Retirement Income Security Act (ERISA) § 204(j), as amended by the Pension Protection Act of 2006.

The new regulations for defined contribution plans investing in publically traded employer securities took effect immediately today (May 19, 2010) upon their publication here in the Federal Register. 

Covered defined contribution plans generally will be required to comply with these new regulations beginning by the first plan year beginning after December 31, 2010 to maintain qualified status under Code § 401(a) and to comply with ERISA.

If you need help reviewing or responding to these new regulations or addressing other employee benefit, compensation or labor and employment concerns, contact the author of this update, Cynthia Marcotte Stamer at (469) 767-8872 or here

About Ms. Stamer

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, management attorney and consultant Ms. Stamer is nationally and internationally recognized for more than 23 years of work helping businesses manage labor and employment, employee benefits, performance management and discipline, compliance and internal controls, risk management, and public policy matters including significant, cutting edge experience advising employer and other health plan sponsors, fiduciaries, insurers, administrators and others design, administer, and defend defensible, cost-effective health and other employee benefit programs.  

The Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee, a Council Representative on the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, and the editor and publisher of Solutions Law Press HR & Benefits Update and other Solutions Law Press Publications, Ms. Stamer also is recognized for her publications, industry leadership, workshops and presentations on these and other health industry and human resources concerns. She regularly speaks and conducts training for the ABA, Institute of Internal Auditors, Society for Professional Benefits Administrators, Southwest Benefits Association and many other organizations.  Publishers of her many highly regarded writings on health industry and human resources matters include the Bureau of National Affairs, Aspen Publishers, ABA, AHLA, Aspen Publishers, Schneider Publications, Spencer Publications, World At Work, SHRM, HCCA, State Bar of Texas, Business Insurance, James Publishing and many others.  You can review other highlights of Ms. Stamer’s experience hereHer insights on these and other matters appear in Managed Care Executive, Modern Health Care, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, MDNews, Kentucky Physician, and many other national and local publications. 

If you need help with human resources or other management, concerns, wish to ask about compliance, risk management or training, or need legal representation on other matters please contact Cynthia Marcotte Stamer here or (469)767-8872. 

Other Recent Updates and Resources

If you found this information of interest, you also may be interested in reviewing other updates and publications by Ms. Stamer including:

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here or e-mailing this information here or registering to receive our Solutions Law Press distributions here. For important information about this communication click here.    If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to here.

©2010 Solutions Law Press. All rights reserved.


Employee Benefit Plan Sponsors & Fiduciaries Urged To Review Bonding, Credentials of Staff & Service Providers Under ERISA

December 14, 2009

By Cynthia Marcotte Stamer

Businesses sponsoring employee benefit plans and officers, directors, employees and others acting as fiduciaries with respect to these employee benefit plans should take steps to confirm that all of the appropriate fiduciary bonds required by the Employee Retirement Income Security Act of 1974, as amended (ERISA) are in place, that all employee benefit plans sponsored are appropriately covered, and that all individuals serving in key positions requiring bonding are covered and appropriately qualified to serve in that capacity under ERISA and the terms of the bond.  Adequate attention to these concerns not only is a required component of ERISA’s fiduciary compliance, it also may provide invaluable protection if a dishonesty or other fiduciary breach results in a loss or other exposure.

ERISA generally requires that every employee benefit plan fiduciary, as well as every other person who handles funds or other property of a plan (a “plan official”), be bonded if they have some discretionary control over a plan or the assets of a related trust.  While some narrow exceptions are available to this bonding requirement, these exceptions are very narrow and apply only if certain narrow criteria are met.  

Plan sponsors and other plan fiduciaries should take steps to ensure that all of the bonding requirements applicable to their employee benefit plans are met at least annually.  Monitoring these compliance obligations is important not only for the 401(k) and other retirement plans typically associated with these requirements, but also for self-insured medical and other ERISA-covered employee benefit plans.

The bonding and credentialing audit should include adopting a written policy requiring appropriate credentialing and bonding and verifying that appropriate bonds are in place for all internal personnel and outside service providers subject to the bonding requirements.  

Steps should be taken to ensure that the required fiduciary bonds are secured in sufficient amounts and scope to meet ERISA’s requirements.  In addition to confirming the existence and amount of the fiduciary bonds, plan sponsors and fiduciaries should confirm that each employee plan for which bonding is required is listed in the bond and that the bond covers all individuals or organizations that ERISA requires to be bonded.  For this purpose, the review should verify the sufficiency and adequacy of bonding in effect for both internal personnel as well as outside service providers.  In the case of internal personnel, the adequacy of the bonds should be reviewed annually to ensure that bond amounts are appropriate.  Unless a service provider provides a legal opinion that adequately demonstrates that an ERISA bonding exemption applies, plan sponsors and fiduciaries also should require that third party service providers provide proof of appropriate bonding as well as to contract to be bonded in accordance with ERISA and other applicable laws, to provide proof of their bonded status or documentation of their exemption, and to provide notice of events that could impact on their bonded status.

When verifying the bonding requirements, it also is a good idea to conduct a criminal background check and other prudent investigation to reconfirm the credentials and suitability of individuals and organizations serving in fiduciary positions or otherwise acting in a capacity covered by ERISA’s bonding requirements.  ERISA generally prohibits individuals convicted of certain crimes from serving, and prohibits plan sponsors, fiduciaries or others from knowingly hiring, retaining, employing or otherwise allowing these convicted individuals during or for the 13-year period after the later of the conviction or the end of imprisonment, to serve as:

  • An administrator, fiduciary, officer, trustee,   custodian, counsel, agent, employee, or representative in any   capacity of any employee benefit plan,    
  • A consultant or adviser to an employee benefit plan,  including but not limited to any entity whose activities are in  whole or substantial part devoted to providing goods or services  to any employee benefit plan, or
  • In any capacity that involves decision-making authority or custody or control of the moneys, funds, assets, or property of any employee benefit plan.

Knowing or intentional violation of this prohibition may expose violating party to fines of up to $10,000, imprisonment for not more than five years, or both.  Even where the violation is not knowing or willful, however, allowing disqualified persons to serve in fiduciary roles can have serious consequences such as exposure to Department of Labor penalties and personal liability for breach of fiduciary duty for damages resulting to the plan if it is established that the retention of services was an imprudent engagement of such an individual that caused the loss.  When conducting such a background check, care should be taken to comply with the applicable notice and consent requirements for conducting third party conducted background checks under the Fair Credit Reporting Act (FCRA) and otherwise applicable law.  As such background investigations generally would be conducted in such a manner as to qualify as a credit check for purposes of the FCRA, conducting background checks in a manner that violates the FCRA credit check requirements itself can be a source of significant liability.

Curran Tomko Tarski LLP Attorneys Can Help

If your organization needs assistance with monitoring, assessing, managing or defending these or other labor and employment, compensation or benefit practices, please contact the author of this article, Curran Tomko Tarski LLP Labor & Employment Practice Group Chair Cynthia Marcotte Stamer at cstamer@cttlegal.com, (214) 270-2402, or another Curran Tomko Tarski LLP attorney of your choice.

Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization and Chair of the American Bar Association RPTE Employee Benefits & Other Compensation Group and a nationally recognized author and speaker, Ms. Stamer is experienced with advising and assisting employers with these and other labor and employment, employee benefit, compensation, risk management  and internal controls matters.  Ms. Stamer is experienced with assisting employers, fiduciaries, bankruptcy trustees, investors, purchasers and others about defined benefit plan and other employee benefit, labor and employment, compensation and other related concerns involved with distressed businesses or benefit plans, bankruptcy and restructuring transactions and other corporate or plan related events. Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization and Chair of the American Bar Association RPTE Employee Benefits & Other Compensation Group and a Joint Committee on Employee Benefit Council Member, Ms. Stamer has advised and represented these and other business clients on employee benefit, labor and employment, compensation, employee benefit and other personnel and staffing matters for more than 20 years.  Her experience includes significant experience representing and advising employee benefit plan sponsors,  fiduciaries, and service providers and their affiliates; investors, creditors, bankruptcy trustees, and others about employee benefit, labor and employment and related services and compensation concerns affecting transactions involving bankrupt or distressed corporations. Ms. Stamer also speaks and writes extensively on these and other related matters. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.   For additional information about the experience and services of Ms. Stamer and other members of the Curran Tomko Tarksi LLP team, see here.

Other Information & Resources

We hope that this information is useful to you. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here or e-mailing this information here or registering to participate in the distribution of our Solutions Law Press HR & Benefits Update distributions here.  Examples of other recent updates you may have missed include:

For important information concerning this communication click here.   If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject here.

 ©2009 Cynthia Marcotte Stamer. All rights reserved.