Industry & Regulatory NewsDiscussion Draft on Financial Privacy Introduced
Congressman Patrick McHenry (R-NC) has released a discussion draft of legislation to modernize financial privacy laws and give consumers more control over how their personal information is collected and utilized. A press release provides the following highlights of the proposal
- Modernizes the Gramm-Leach-Bliley Act to align consumer protections with financial system innovation
- Directs entities to disclose to consumers why they are collecting certain data along with the ability to opt out of the data collection—and to use data only for its stated purpose
- Improves transparency by requiring privacy terms and conditions in consumer disclosures to be easily understandable
- Provides a national standard that would preempt state privacy laws to provide consistency across the nation with respect to collection and use of personal information
Industry & Regulatory NewsHouse Proposal Would Expand 529 Eligible Expenses
Congressman Lloyd Smucker (R-PA) has introduced H.R. 8128, a bill to expand the allowable education expenses available for use from 529 education savings accounts. The bill would allow industry recognized apprenticeship programs registered and certified by an eligible Standards Recognition Entity as qualified education expenses. These programs would be in addition to existing apprenticeship programs registered and certified with the Secretary of Labor that qualify as higher education expenses.
The definition of qualified education expense would also be further expanded to include expenses related to a “career and technical education program” (as defined by the Carl D. Perkins Career and Technical Education Act of 2006) or a “career pathway” (as defined by the Workforce Innovation and Opportunity Act).
Industry & Regulatory NewsIRS Releases 2022 Draft Form 945
The IRS has made available a draft 2022 Form 945 Annual Return of Withheld Federal Income Tax. This form is used to report withheld federal income tax from nonpayroll payments such as distributions from tax-favored retirement plans. The form will be reviewed and additional details provided as warranted.
Industry & Regulatory NewsSenate Finance Proposal Includes ABLE Age Adjustment
The Enhancing American Retirement Now (EARN) Act, which cleared the Senate Finance Committee and heads to the full Senate for consideration, includes a proposal by Senator Bob Casey (D-PA) to modify the “eligible individual” definition for purposes of a qualified ABLE program. Under the proposal, an individual may be an eligible individual if entitled to benefits based on blindness or disability, and such blindness or disability occurred before the date on which the individual attains the age of 46 (the current age is 26). It is estimated that the change in age would allow over 6 million additional people with disabilities to save with ABLE accounts.
Industry & Regulatory NewsSenate Finance Committee Advances EARN Act
The Senate Finance Committee conducted a hearing today to consider the Enhancing American Retirement Now (EARN) Act. The bill was unanimously approved out of committee with one minor amendment. While text of the bill has not yet been made available, details of a summary released by the committee were previously announced. During the hearing, several other amendments were discussed and, while not included, many had broad support and could be included in the final full Senate version of the bill.
Industry & Regulatory NewsDOL Releases Spring 2022 Regulatory Agenda
The Department of Labor has posted online its upcoming guidance priorities. A number of the guidance items deal with retirement savings arrangements, including the following.
- Two items in the “prerule” stage include improving the effectiveness of retirement plan disclosures and guidance on pooled employer plans
- A former initiative to modernize the Form 5500 appears in the proposed rule stage
- A rulemaking to amend the definition of fiduciary to include persons who render investment advice for a fee to employee benefit plans and IRAs
- Revised procedures for granting prohibited transaction exemptions
- A final rule regarding pension benefit statement lifetime income illustrations as required under the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019
- Updates to the Voluntary Fiduciary Correction Program
- A third final rule concerning Form 5500 changes related to the SECURE Act
- A final rule regarding prudence and loyalty in selecting plan investments and exercising shareholder rights
- Amendments to the abandoned plan program
Industry & Regulatory NewsIRS Issues Yield Curves and Segment Rates for DB Plan Calculations
The IRS has issued Notice 2022-29, 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 May 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.
Industry & Regulatory NewsIRS Updates Letter Ruling Procedures for DB Plan Spin-Offs and Terminations
The IRS has issued Revenue Procedure (Rev. Proc.) 2022-28, which updates Rev. Proc. 2022-3, on whether the IRS will issue letter rulings or determination letters. The IRS will no longer issue letter rulings on whether an employer reversion of cash and the fair market value of other property received from a qualified plan occurs in connection with a spin-off/termination transaction that involved excess assets. For this Revenue Procedure, a “spin-off/termination transaction that involves excess assets” is defined as a transaction in which:
Industry & Regulatory NewsSenate Finance Releases Its Version of SECURE 2.0
The Senate Finance Committee has released an outline of its version of proposed retirement reform on the heels of passage of the Rise & Shine Act out of the Senate Health, Education, Labor and Pension (HELP) committee last week. A summary of the Enhancing American Retirement Now (EARN) Act released by the committee provides a brief description of each provision.
Industry & Regulatory NewsWashington Pulse: Some Big Changes May be in Store for the Davis-Bacon Act
The Davis-Bacon Act (DBA) has played a major role in the construction industry for over 90 years. Passed in 1931, it has been described by the Supreme Court as a “minimum wage law designed for the benefit of construction workers.” The DBA generally requires payment of locally prevailing wages under direct federal contracts and for covered contractors and their subcontractors. The employer’s obligation can be met by paying the applicable prevailing wage entirely as cash wages or by a combination of cash wages and employer-provided, bona fide fringe benefits—including pension and health benefits.