The Washington Report
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October 21, 2020
Note to subscribers: Due to the current environment, information is changing at a rapid rate. While we do our best to provide timely updates, it is possible that the information shared in the newsletter may change or be revised after our publication deadline. Stay healthy and safe! ~The Washington Report team
Health
Maximum Newly Available Amount for EB-HRAs Remains at $1,800 for 2021
On October 16, 2020, the Internal Revenue Service (IRS) released in Revenue Procedure 2020-43 the inflation-adjusted maximum dollar amount that may be made newly available for excepted benefit health reimbursement arrangements (EB-HRAs) or other account-based group health plans for plan years beginning after December 31, 2020, and before January 1, 2022. Due to indexing methodology requiring rounding down to the nearest $50 increment, this amount remains $1,800 for the 2021 plan year.
IRS Revenue Procedure 2020-43 is available here.
Retirement
PBGC Updates Maximum Monthly Guarantees for Single-Employer Plans
On October 16, 2020, the Pension Benefit Guaranty Corporation (PBGC) updated its tables showing maximum monthly guarantees for single-employer plans for various ages and payment forms. The guarantee limits for single-employer plans that fail in 2021 will be 3.81% higher than the limits that applied for 2020. The guarantee limits for multiemployer plans are not indexed and therefore have not changed.
The tables for 2021 and earlier years are available here.
PBGC Announces 2021 Premium Rates for Single-Employer and Multiemployer Plans
On October 15, 2020, the PBGC announced the 2021 flat-rate premiums for single-employer and multiemployer plans. For the 2021 plan year, the per-participant flat-rate premium for single-employer plans is $86.00 (up from $83.00 in 2020) and $31.00 for multiemployer plans (up from $30.00 in 2020). For plan years beginning in 2021, the variable-rate premium (VRP) for single-employer plans is $46.00 per $1,000 of unfunded vested benefits, up from a 2020 rate of $45.00. For 2021, the VRP is capped at $582 times the number of participants (up from a 2020 cap of $561). Plans sponsored by small employers (generally fewer than 25 employees) may be subject to a lower cap.
For additional information on VRPs, current and historical data, and scheduled increases for years after 2021, please refer to the premium rate website.
The 2021 PBGC premium rates are available here.
Aon Webinar
Impact of COVID-19 on Organizations, Financial Markets, and Retirement Programs: Is Hindsight 20/20? Preparing Your Retirement Plan Finances for Year-End Amidst Ongoing Uncertainty
The 2020 COVID-19 pandemic has had significant impacts on organizations, financial markets, and retirement programs. As we approach year-end, it is time to consider how these changes should be reflected in year-end financials and 2021 budgets.
Register for Aon’s webinar on October 28 at 11:30 a.m. CT/12:30 p.m. ET, to receive an update on this quickly evolving environment and insights on:
- Reflecting COVID-19 in year-end corporate financial statements;
- Using accounting strategies to reduce income statement volatility;
- Investing in a prolonged low interest rate environment;
- Settling pension liability; and
- Understanding legislative uncertainty.
Join us as Aon’s experts share their insights on important topics in these unprecedented times.
Register for Aon’s webinar here.