- Mass Layoffs: In the event a business lays off a substantial percentage of its workforce – even for an intended short period of time – the layoff may trigger a partial plan termination requiring certain immediate vesting. It is important not to forget about these types of plan provisions.
- Fiduciary Committees: As the first quarter of 2020 comes to a close at the end of March, many businesses may wish to postpone fiduciary committee meetings. However, especially in highly volatile times, it is important to maintain oversight of the retirement plan and investment options. Communication to employees regarding oversight, historical market returns, and investment choices within the retirement plan are important considerations. Consider holding your fiduciary committee meetings via telephone or conference meeting. It may be wise to utilize your ERISA legal counsel in such meetings in order to have tough conversations about investment options or contributions.
- Retirement Plan Employer Contributions: We may see a short-term revenue drop for many businesses. It is important for both safe harbor plans and retirement plans in general, whether it is a matching contribution or employer contribution, to properly suspend contributions if such an action is deemed necessary.
- Testing and 5500 Reports: Many retirement plan testing results are delivered in early and mid-March for calendar year plans. Do not ignore these testing results where something may have failed due to employees working from home.
- SECURE ACT Provisions: There are provisions that plans must consider today, for example the shift from age 70 required minimum distribution to age 72. These provisions will require plan updates in most cases. Do not allow tele-commuting and confusion in these times to result in a failure to amend your plan and a need for self or voluntary correction later.
- Plan Loans: Most plan documents will allow for retirement plan loans with employees potentially located at home or in another area. It is important to ensure that retirement plan administration is operating in a work-at-home environment. Access to plan materials and loan validation according to plan documents is critical.
- Hardship Distributions: Employers must continue to administer their retirement plan according to the plan documents. As of the date of this Alert, there is no FEMA declared disaster despite President Trump’s declared national emergency to allow for a Hardship Distribution related to COVID-19 conditions. A hardship distribution related to COVID-19 impact may be allowed for Section 213(d) medical care but must be limited to such expenses. Many local areas are preventing evictions for a certain period of time. Employers must continue to administer their retirement plan according to the plan documents.
Electronic Alerts are written by Barran Liebman attorneys for their clients and friends. Alerts are not intended as legal advice, but as employment law, labor law, and employee benefits announcements. If this has been forwarded to you, and you would like to begin receiving Electronic Alerts directly, please email or call Traci Ray at 503-276-2115. Copyright ©2020 by Barran Liebman LLP.
Las Alertas electrónicas son escritas por abogados de Barran Liebman para sus clientes y amigos. Las Alertas no son proveídas como asesoramiento legal, sino solo como anuncios de leyes de empleo, leyes laborales y beneficios de empleo. Si esto ha sido remetido a usted y quisieras empezar a recibir las Alertas directamente, por favor mándanos un correo electrónico o llama a Traci Ray al 503-276-2115. Derechos de autor ©2020 por Barran Liebman LLP.