News

A plaintiff in a 401(k) plan sponsored by Colgate-Palmolive Co. has filed a lawsuit against several parties after an unknown individual defrauded the plan of her entire $750,000 account. The plaintiff has named the plan sponsor, the recordkeeper Alight Solutions, and the plan trustee Mellon Bank, as defendants in the lawsuit. The plaintiff alleges the parties breached their fiduciary duty by failing to safeguard her assets.

The Pension Benefit Guaranty Corporation (PBGC) has released a final rule outlining terms for underfunded multiemployer plans seeking special financial assistance (SFA) under the American Rescue Plan (ARP) Act of 2021. ARP allows certain financially troubled multiemployer plans to apply for special financial assistance in accordance with rules developed by PBGC. The rule is scheduled to be published on July 8, 2022.

The IRS has released the latest version of Publication 1179 (Revenue Procedure 2022-25), General Rules and Specifications for Substitute Forms 1096, 1098, 1099, 5498, and Certain Other Information Returns.

Some organizations, such as IRA trustees or custodians, may prefer to draft and use substitute forms rather than IRS-provided information return forms. In addition to specifications for properly creating substitute forms, the guidance addresses such issues as inclusion of logos, slogans, and advertisements, as well as penalties for information return filing failures, and delivery requirements.

Most of you have probably experienced the following scenario: An employee comes to you and says that they made a mistake during open enrollment, and they would like to make a change to their elections. If they realize their mistake and notify you before the beginning of the FSA or HRA plan year, you are permitted to make any change that they would like to make.

With changes to workplace arrangements and working conditions following the COVID pandemic, employers are seeking ways to allow their employees to use already contributed commuter benefits funds, and to differentiate their welfare benefits package. Questions surround the use of dollars allocated for 2021 plan years, and what to do for 2022 and 2023 with many unknowns about the future.

Most private sector employers, including non-profit organizations, are subject to ERISA. Most government plans, as well as church and church-related plans are excluded.

On April 29, 2022, the Internal Revenue Service released the 2023 maximum amounts for high deductible health plans (HDHPs) and Health Savings Accounts.

Normally the IRS adjusts the standard mileage rates at the beginning of each year, but occasionally they announce changes at other times to correspond with current costs.

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
• Empowers consumers to understand how personal information is being collected and used by a service provider when they agree to a service provider’s privacy policy, and ensures consumers have the right to terminate collection of their data or request deletion of their data
• 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

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).