ERISA Roundup - Q1 2021
A NOTE FROM BDO’S NATIONAL ERISA PRACTICE LEADER
As everyone shakes off the winter cold and prepares for spring, BDO’s ERISA Center of Excellence has been working diligently to bring you a fresh set of insights around the latest topics in employee benefit plans.
We are excited to announce a brand-new avenue where you can hear about all things ERISA and other HR-related topics in our recently launched podcast series, BDO Talks ERISA! In keeping with the theme of the upcoming National Employee Benefits Day (April 6), our latest episode focuses on mental wellness and tips to avoid burnout. This Roundup includes all of the details on current podcast episodes.
In addition to insights to help you navigate the CARES Act and other regulatory relief efforts, SAS 136, and much more, we close out this quarter reflecting on the disproportionate strain the pandemic has placed on the financial wellness of women. We share practical tips for employers seeking to initiate better financial preparedness among their female employees.
As always, I encourage you to follow along with our regular insights at www.bdo.com/erisa. Be sure to join our conversation at BDO Talks ERISA and connect to let us know what you like (and what topics you would like to hear more about in future episodes!).
Sincerely,
Beth Garner, Partner; Leader - Employee Benefit Plan Audits
IN THIS ISSUE...
Strengthening Women’s Financial Wellness in the Wake of the Pandemic
While nearly everyone has been affected by the COVID-19 pandemic, the economic impact has been especially acute for women.
Consolidated Appropriations Act: What Plan Sponsors Need to Know About Retirement Plan Relief
The Consolidated Appropriations Act, 2021 (CAA), which was enacted on December 27, 2020, is mostly known for the $900 billion it provided in additional stimulus funding for pandemic relief.
“Free” COBRA Group Health Care for up to Six Months for Involuntarily Terminated (or Reduced Hours)
The American Rescue Plan Act of 2021 (ARPA), enacted on March 11, 2021, creates a requirement that employers treat the total payment for Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage due from certain eligible individuals as being “paid in full” for April 1 through September 30, 2021 (Subsidy Period).
Hardship Distributions: What Plan Sponsors Need to Know About Complying with Recent Changes
Efforts to keep up with the myriad of challenges that retirement plan sponsors faced in 2020 may have caused some to overlook significant changes related to hardship distributions that were enacted before the onset of the COVID-19 pandemic.
BDO Talks ERISA Podcast Series
Welcome to BDO Talks ERISA – a monthly podcast about best practices around all things ERISA and any other HR-related topics.
Correcting Potential Errors Relating to CARES Act Loans
During the first year of the COVID-19 pandemic, Congress provided plan sponsors with a broad toolkit to help employees access retirement assets and manage loan repayments.
SAS 136: What Plan Sponsors Need to Know About Upcoming Changes to ERISA Plan Audits
Plan sponsors will need to take the time to understand SAS 136 and its effect on the audit process.
Practical Matters: FAQs for Plan Sponsors and Employees on CARES Act Relief
The Coronavirus Aid, Relief and Economic Security (CARES) Act was a rapid response by the federal government to help businesses and employees cope with the economic issues caused by the pandemic.
The Long-Term Impact of CARES Act Loans and Distributions on Retirement Savings
The Coronavirus Aid, Relief and Economic Security (CARES) Act allowed plan sponsors to relax loan and distribution rules in 2020, giving participants greater access to funds during the pandemic.
The Fallacy of the December 31 Closing for ESOP Transactions
As more and more companies discover the advantages of employee ownership, the number of new ESOP transactions closing on or just before December 31 continues to grow.
2021 DEADLINES AND IMPORTANT DATES FOR PLAN SPONSORS
April 2021
April 26: Action: File PBGC Form 200 by April 26, if plan sponsor of a single-employer defined benefit plan does not make the April 15 required contribution, causing the plan to have more than $1 million in unpaid contributions.
April 28: Distribution: Send annual funding notice to participants of single- and multi-employer defined benefit plans over 100 participants by April 28.
May 2021
May 14: Action: Distribution: Defined contribution plans must send fee and benefit information to participants by May 14.
May 15: Action: File PBGC Form 10 by May 15, Post-Event Notice of Reportable Events if plan sponsor of a singleemployer defined benefit plan does not make an April 15 required contribution, causing the plan to have more than $1 million in unpaid contributions.
June 2021
June 29: Action: Plans with publicly traded employer stock that use an ERISA format must file Form 11-K with the Securities and Exchange Commission by June 29.
View All Deadlines and Important Dates
CONTRIBUTION PLAN LIMITS AND OTHER ROLLING NOTICES FOR 2021
In addition to those important deadlines and dates, plan sponsors should be aware of the contribution plan limits and other rolling notices for 2021:
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Employee salary deferral limits for 401(k), 403(b) and 457 plans will be $19,500. Age 50 catch-up contribution limit increases to $6,500.
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Health Savings Account contribution limit is $3,600 (single) and $7,200 (family). Age 55 catch-up contribution stays at $1,000.
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Traditional and Roth Individual Retirement Account contribution limit will be $6,000. catch-up contributions for participants age 50 and over is $1,000.
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Limitation for the annual benefit under a defined benefit plan under Section 415(b)(1)(A) will be $230,000.
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The dollar amount used to define “highly compensated employee” under Section 414(q)(1)(B) will be $130,000.
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Newly eligible employees must receive a Summary Plan Description (SPD) within 90 days after becoming covered by the Plan.
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Provide quarterly statements and fee information to participants.
New Podcast! BDO Talks ERISA
In February, our ERISA Center of Excellence launched a monthly podcast - BDO Talks ERISA! This series covers best practices around all things ERISA and any other HR-related topics, including:
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How to avoid common compliance issues
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How to navigate the ins-and-outs of ERISA’s fiduciary provisions
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Our own experiences working for BDO’s ERISA Services group
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A deeper dive into the insights we share through our BDO ERISA Center of Excellence
Listen to new episodes at BDO.com/BDOTalksERISA or subscribe on Apple Podcast or Spotify. If you have suggestions for future topics or have a question for us to answer, send an email to [email protected].
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