The Washington Report
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November 18, 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
Note to Subscribers: Holiday Publication Schedule
The Washington Report will not be published on November 25, 2020, or December 2, 2020. Publication will resume on December 9. Have a safe and enjoyable Thanksgiving holiday!
Retirement
IRS and PBGC Issue Guidance Extending CARES Act Contribution Deadline to January 4, 2021
On November 16, 2020, the Internal Revenue Service (IRS) issued Notice 2020-82, which extends the deadline for contributions to single-employer defined benefit plans under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, to January 4, 2021. The CARES Act provided that cash contributions otherwise due during calendar year 2020 can be made by January 1, 2021, and still be considered timely. Since January 1 is a holiday, plan sponsors would have effectively needed to make contributions by December 31, 2020, if their trustee would be unable to receive contributions on January 1. Notice 2020-82 provides that contributions will be considered timely under the CARES Act if they are made no later than January 4, 2021 (which is the first business day of 2021). This extended deadline also applies to elections to apply funding balances to the minimum required contribution and to add excess contributions to the prefunding balance.
Notice 2020-82 does not change the treatment of contributions otherwise due in calendar 2020 that are made after January 4, 2021. Thus, the calculations for late contributions shown in Notice 2020-61 are unaffected.
The Pension Benefit Guaranty Corporation (PBGC) has also revised Technical Update 20-2 to provide that contributions for a prior plan year made by the extended January 4, 2021, deadline can be reflected in the market value of assets for PBGC premium purposes.
IRS Notice 2020-82 is available here.
IRS Notice 2020-61 is available here.
PBGC Technical Update 20-2 (revised November 16, 2020) is available here.
PBGC Practitioner Frequently Asked Questions are available here.
DOL Releases Final Regulation on Registration Requirements for Pooled Plan Providers
On November 12, 2020, the Department of Labor’s (DOL’s) Employee Benefits Security Administration (EBSA) released a final regulation establishing registration requirements for pooled plan providers. The regulation implements the registration requirements for pooled plan providers pursuant to the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act). The SECURE Act amended ERISA and the Internal Revenue Code to establish a new type of multiple employer plan called a “pooled employer plan.” Pooled employer plans must be administered by a “pooled plan provider.” The SECURE Act allows pooled plan providers to start operating pooled employer plans beginning on January 1, 2021, but requires that pooled plan providers register with the Secretary of Labor and the Secretary of the Treasury before they begin operations as a pooled plan provider.
The final regulation establishes an electronic registration process for businesses that want to offer pooled employer plans. With the exception of November 25, 2020, to January 31, 2021, the process requires pooled plan providers to register at least 30 days before beginning operations. Plans must also submit supplemental filings regarding specific reportable events and a final filing after the provider’s last pooled employer plan has been terminated and ceased operations. For the period of November 25, 2020, to January 31, 2021, the requirement to register at least 30 days prior to operating a pooled employer plan is waived, provided registration occurs no later than the start of the plan.
Filing: Pooled plan providers must register by electronically submitting the new EBSA Form PR. The new electronic filing system will be available on November 25, 2020, at https://www.efast.dol.gov/. While filers may begin using the system on November 25, an informational version of the new Form PR and instructions will be made available at https://www.dol.gov/agencies/ebsa in the “coming days.”
The final regulation becomes effective upon official publication in the Federal Register.
Please note that some government websites are experiencing technological issues. Readers may need to try different browsers if they encounter difficulties opening links.
The news release is available at: https://www.dol.gov/newsroom/releases/ebsa/ebsa20201112
The final regulation is temporarily available at: https://www.dol.gov/sites/dolgov/files/EBSA/temporary-postings/registration-requirements-for-pooled-plan-providers-final-rule.pdf
(Disclaimer: This final rule was submitted to the Office of the Federal Register (OFR) for publication, and will be placed on public inspection at the OFR and published in the Federal Register. This version of the final rule may vary slightly from the published version if the OFR makes minor technical or formatting changes during the review process. Only the version published in the Federal Register is the official final rule.)
Other HR/Employment
EEOC Publishes Fiscal Year 2020 Agency Financial Report
On November 16, 2020, the Equal Employment Opportunity Commission (EEOC) published its Fiscal Year 2020 Agency Financial Report. The EEOC reported that the agency “continues to make significant progress in managing pending inventories of charges, hearings and appeals, and secured record recovery for victims of discrimination during fiscal year 2020, which ended Sept. 30.” With a focus on agency-wide inventory reduction strategies, building on technological enhancements and new digital systems, and the hiring of front-line staff, the EEOC reduced the private sector charge workload by 3.7% to 41,951, the lowest pending inventory in 14 years. This builds on a 12.1% decrease in FY 2019. At the same time, the agency increased the percentage of charges resolved with an outcome favorable to the charging party by nearly 2%, to 17.4%.
In addition to its educational, training, and outreach events, the EEOC also prioritized COVID-19-related outreach, including the publication of the agency’s technical question and answer document, What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws. According to the EEOC, this question and answer document was viewed approximately 1 million times on the agency’s website.
The news release is available here.
The EEOC’s Fiscal Year 2020 Agency Financial Report is available here.
The EEOC’s What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws is available here.
Aon Publications
Departments Publish Final Rules on Price Transparency for Health Plans
The Departments of Labor, Health and Human Services, and Treasury (the Departments) have issued final rules requiring price transparency from employer group health plans and health insurance issuers. The final rules require plans and issuers to provide out-of-pocket cost estimates for covered individuals and publicly post online in-network contracted rates and out-of-network allowed amounts for medical and prescription drug services.
The Aon bulletin on the final rules is available here.
Year-End Update: Recent Developments and Other Guidance Potentially Affecting Retirement Plans for 2020 and 2021
The Retirement Legal Consulting & Compliance practice has prepared a summary of plan amendments for 2020 and 2021 which highlights these key considerations:
- Required amendments for defined benefit (DB) and defined contribution (DC) plans;
- Discretionary amendments for DB and DC plans, resulting from recent announcements and/or tax law changes;
- Discretionary amendments to consider when terminating DB plans; and
- Other discretionary amendments and considerations due to recent litigation.
Included in this summary are important changes and updates from the Setting Every Community Up for Retirement Enhancement Act of 2019 and the Coronavirus Aid, Relief, and Economic Security Act, and how these legislative updates impact retirement plans.
The Aon document is available here.