Industry & Regulatory NewsIRS Extends Remedial Amendment Period for SECURE Act, Miners Act, and Certain Provisions of CARES Act
The IRS issued Notice 2022-33 which extends the deadline for amendments to retirement plans and Individual Retirement Arrangements (IRAs) to adopt provisions enacted under the SECURE Act, the Miners Act, and some provisions under the CARES Act. The Notice provides that qualified plans, IRAs, and non-governmental 403(b) plans must be amended to adopt applicable provisions of each act no later than December 31, 2025. The previous deadline for such amendments under Notice 2020-68 and Notice 2020-86 was December 31, 2022.
Industry & Regulatory NewsIRS Issues Deadline Relief for Island of St. Croix, U.S. VI Water Shortage
The IRS has announced the postponement of certain tax-related deadlines for victims of a water shortage and health impact from unprecedented sargassum seagrass influx on the island of St. Croix, U.S. Virgin Islands. The tax relief postpones various tax-filing deadlines that began July 15, 2022. Affected individuals and households who reside or have a business on the Island of St. Croix, as well as taxpayers with records located in the covered area that are needed to meet covered deadlines, qualify for relief.
Industry & Regulatory NewsAnother Cryptocurrency Proposal Introduced in Senate
Senators Debbie Stabenow (D-MI), and John Boozman (R-AR), along with Senators Cory Booker (D-NJ) and John Thune (R-SD), have introduced the “Digital Commodities Consumer Protection Act.” According to a press release, the proposal would give the Commodity Futures Trading Commission (CFTC) new tools and authorities to regulate “digital commodities”—which would include Bitcoin and Ether. The bill sponsors serve on the Senate Committee on Agriculture, Nutrition & Forestry, which has oversight of the CFTC which regulates commodities markets.
A previous proposal by Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) was announced in June.
Industry & Regulatory NewsSenate Proposal Would Modify Fiduciary Investment Selection Requirements
Senator Mike Braun (R-IN) and seven republican co-sponsors have introduced S. 4613, the Maximize Americans’ Retirement Security Act. The bill would amend ERISA as follows:
- Require plan fiduciaries to select investments solely on pecuniary factors
- Require participant notification of an explanation of why pecuniary factors were not sufficient to select the investment and how non-pecuniary factors are consistent with the interests of participants if a fiduciary cannot distinguish between investments on pecuniary factors alone
- Define pecuniary factors as any factors that a fiduciary prudently determines is expected to have a material effect on the risk of return of an investment
Department of Labor guidance regarding what is “pecuniary” and the extent to which non-pecuniary factors can be considered when selecting investments has changed throughout the years. The proposal was referred to the Senate Committee on Health, Education, Labor, and Pensions.
Industry & Regulatory NewsAdditional ACA FAQs Released
The Departments of Labor, Health and Human Services and Treasury issued a joint FAQ related to the coverage of contraceptive products as preventive services by group health plans or issuers. The FAQ provides the following:
- Group health plans and issuers are required to cover items or services that are integral to the furnishing of a recommended preventive service. The FAQ clarifies that coverage of anesthesia for a tubal litigation procedure or pregnancy tests required prior to the provision of an intrauterine device would be considered preventive services.
Industry & Regulatory NewsFederal Prime Interest Rate Increased to 5.50 Percent
Effective July 27, 2022, the Federal prime interest rate increased from 4.75 percent to 5.50 percent. The prime interest rate is largely determined by the federal funds rate, as set by the Federal Reserve’s Federal Open Market Committee (FOMC). As Department of Labor regulations require a retirement plan loan interest rate to be comparable to interest rates charged by entities that are in the business of lending money in similar circumstances, plan sponsors typically use a benchmark such as the prime rate to set the interest rate on plan loans. The next FOMC meeting is scheduled for September 20 and 21, 2022.
Industry & Regulatory NewsHHS Proposal Revises Section 1557 of ACA
The Department of Health and Human Services (HHS) has introduced a notice of proposed rulemaking implementing Section 1557 of the Affordable Care Act (ACA). Section 1557 prohibits discrimination on the basis of race, color, national origin, sex, age, and disability in covered health programs and activities. HHS has introduced a final rule twice before but was unable to implement the rule following civil litigation. The proposed rule seeks to clarify Section 1557 by addressing gaps identified in prior regulation, as follows.
Industry & Regulatory NewsDOL Guidance on Employee Benefit Plan Audit Independence at OMB
The Office of Management and Budget has received a final rule from the Department of Labor (DOL) titled, “Interpretive Bulletin Relating to the Independence of Employee Benefit Plan Accounts.”
The DOL has long had in place a 1975 interpretive bulletin, acknowledging that further guidance may be issued concerning the question of independency of an accountant retained by an employee benefit plan. In 2019, the American Institute of Certified Public Accountants (AICPA) issued a new Statement of Auditing Standards (SAS) 136 which updated audit requirements for employee benefit plans. Required implementation of these new requirements was delayed until plan years ending after December 15, 2021.
Industry & Regulatory NewsDOL Releases Proposed Amendment to QPAM Exemption
July 26, 2022 — The Department of Labor has announced a proposed amendment to the Class Prohibited Transaction Exemption 84-14, also known as the Qualified Professional Asset Manager (QPAM) Exemption. According to a DOL news release, the proposed amendment expands the types of misconduct that disqualify plan asset managers from using the exemption by
Industry & Regulatory NewsIRS Issues Yield Curves and Segment Rates for DB Plan Calculations
The IRS has issued Notice 2022-32, 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 July 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.