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DISCLAIMER: This blog is published for general information only - it is not intended to constitute legal advice and cannot be relied upon by any person as legal advice.  U.S. Treasury Regulations require us to notify you that any tax-related material in this blog (including links and attachments) is not intended or written to be used, and cannot be used, for the purpose of avoiding tax penalties, and may not be referred to in any marketing or promotional materials.  While we welcome you to contact our authors, the submission of a comment or question does not create an attorney-client relationship between the Firm and you. 


UPDATED: Summer Break - Massachusetts Employers Get Extension on Paid Family and Medical Leave Implementation


UPDATE: The Massachusetts Department of Family and Medical Leave announced that along with the start of contributions being delayed from July 1, 2019 to October 1, 2019, the following aspects of the program are also delayed:

- the deadline for providing notice to employees is delayed from June 30, 2019 to September 30, 2019;

- the deadline for applications for an exemption from the state program is delayed from September 20, 2019 to December 20, 2019;

- and the contribution rate is increased from .63 percent of an employee's wages to .75 percent of an employee's wages.


Those closely following the timeline for implementation of Massachusetts’s new Paid Family and Medical Leave law are aware that on July 1, 2019, employers were required to begin making payroll withholdings for the program.

We say "were" because yesterday Governor Charlie Baker, Senate President Karn Spilka, and House Speaker Robert DeLeo announced an agreement that contributions to fund the program, which were supposed to kick in on July 1, will be delayed until October 1, 2019.

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Who is a Highly Compensated Employee?

Identifying an employer’s highly compensated employees is crucial to the administration of qualified retirement plans, as well as 403(b) plans that provide employer contributions. This post provides an overview of the rules for determining who is a highly compensated employee.

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Recap of Change to Retirement Plan Rollover Rules for Plan Loan Offsets

The Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”) includes a provision that changed the rollover rules for certain plan loan offset distributions and that may not be well known to retirement plan sponsors and participants.

Money purchase, profit sharing, 401(k) and 403(b) plans may make loans available to plan participants.  If a participant with an outstanding loan terminates employment and fails to repay the loan in accordance with its terms (including repayment by the end of any cure period established under the plan), the plan will reduce (offset) the terminated participant’s vested account balance by the principal and accrued interest outstanding on the loan.  This means the entire outstanding loan balance will be treated as a distribution from the plan paid directly to the terminated participant, and the taxable portion of the distribution will be subject to income tax (and the 10% penalty tax for early distributions, if applicable).

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Revenue Procedure 2019-19: Enhancements to EPCRS are Great News for Plan Sponsors

Newly published Revenue Procedure 2019-19 modifies and supersedes prior IRS guidance regarding the Employee Plans Compliance Resolution System (EPCRS) to allow plan sponsors to self-correct an expanded number of problems that may affect retirement plan operations or documents. The new guidance, which took effect April 19, 2019, provides a significant opportunity for plan sponsors to correct loan defaults and other minor operational failures without going through the expensive and often time consuming voluntary correction program (VCP) procedure.

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Handling Missing Participants under Code Section 409A

Deferred compensation payments are due to one of your former executives, but the former executive is nowhere to be found. You know that the IRS has strict timing rules for payments subject to Code Section 409A (but maybe not as strict as you think). The end of the tax year is approaching fast. What to do?

Missing participants can be a problem for benefit plan sponsors in a variety of contexts. Sponsors of qualified plans can turn to IRS and DOL guidance on what do to when a missing participant is owed required minimum distributions or the plan is being terminated and assets must be distributed.

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