Industry & Regulatory News

This credit applies to qualified plans (defined contribution and defined benefit plans under IRC Sec. 401(a) and 403(a)), and SEP and SIMPLE plans.

Representative Andy Biggs (R-AZ) has introduced H.R. 107, the Freedom for Families Act, which proposes the following.

• Provide that distributions from health savings accounts (HSAs) during periods of qualified caregiving are not includible in gross income
• Remove the requirement that an individual be covered under a high deductible health plan in order to contribute to an HSA
• Increase the annual contributions limits to $9,000 for single coverage and $18,000 for family coverage

Under the proposal, periods of qualified caregiving are defined as any period during which an individual is on leave or not employed because of the following reasons.

• Birth of the employee’s child and the period required to care for such child
• Placement of a child with the employee for adoption or foster care
• Caring for the employee’s spouse, son, daughter, or parent, because of a serious health condition
• A serious health condition that makes the employee unable to perform the functions of her position
• Certain emergencies as a result of covered active duty or notification of order to covered active duty in the Armed Forces by the employee’s spouse, son, daughter, or parent

The bill has been referred to the House Committee on Ways and Means.

The IRS has issued Notice 2023-12, which contains updated guidance on factors used in certain defined benefit (DB) pension plan minimum funding and present value calculations. Updates include the corporate bond monthly yield curve, the corresponding spot segment rates for January used under Internal Revenue Code Section (IRC Sec.) 417(e)(3), and the 24-month average segment rates under IRC Sec. 430(h)(2). IRC Sec. 417 contains definitions and special rules for minimum survivor annuity requirements in DB plans. IRC Sec. 430 addresses minimum funding standards for single-employer DB plans.

The IRS has issued Revenue Ruling 2023-03, which contains the applicable federal rates (AFR) for February 2023. These rates are used for such purposes as calculating distributions from retirement savings arrangements that meet the requirements for substantially equal periodic payments (a 10 percent early distribution penalty tax exception), also referred to as "72(t) payments."

Retirement legislation has been a welcome area of bipartisan cooperation in the U.S. Congress, marked by a history of Republican and Democratic bill co-sponsorship and support. A recent example is the Setting Every Community Up for Retirement Enhancement Act—the SECURE Act—passed and signed into law in 2019. The SECURE Act has been hailed as the most important retirement enhancement legislation in more than a decade.

May 3, 2022 - Senators Maggie Hassan (D-NH) and Susan Collins (R-ME) have introduced S. 4103, the Helping Parents Save for College Act. The bill would provide low- and middle-income parents with a tax credit for contributions to 529 education savings accounts by expanding the Saver’s Credit. The credit would be worth up to 50 percent of 529 account contributions, with a maximum credit of $2,000 for low-and-middle income families.

The IRS released a new withholding form on January 4, 2022: Form W-4R, Withholding Certificate for Nonperiodic Payments and Eligible Rollover Distributions. The IRS also issued a revised Form W-4P, Withholding Certificate for Pension or Annuity Payments. As a result, payers and individuals will have a new process for calculating and electing federal income tax withholding on retirement distributions. Although the IRS will not require payers to use the new and revised forms until January 1, 2023, payers may start using them in 2022.

December 28, 2021 – The Department of Labor’s Employee Benefits Security Administration (EBSA) has issued a notice with final forms revisions for Form 5500, Annual Return/Report of Employee Benefit Plan, and Form 5500-SF, Annual Return/Report of Small Employee Benefit Plan, relating to annual reporting changes for multiple-employer plans (MEPs) and pooled employer plans (PEPs). It specifically revises the Form 5500 and Form 5500-SF instructions for the 2021 reporting year for multiple-employer plans. It is effective for plan years beginning on or after January 1, 2021.

Plan participants have more time to roll over certain plan loan offsets under the Tax Cuts & Jobs Act of 2017 (TCJA). These are known as qualified plan loan offsets (QPLOs). In response to this legislative change, the IRS released proposed regulations in August 2020. The IRS finalized the regulations in December 2020, with only one modification: the applicability date.

At the end of 2019, the President signed the most comprehensive retirement reform package in over a decade: the Setting Every Community Up for Retirement Enhancement (SECURE) Act. The SECURE Act is one of multiple bills that were included in the Further Consolidated Appropriations Act, 2020 (FCAA).