QUESTION: We are required to file Form 5500 for several of our company’s employee benefit plans, and we are not sure that we will be able to file all of them on time. What do we need to do to get an extension? ANSWER: An extension for filing Form 5500 (Annual Return/Report of Employee Benefit Plan) is obtained by filing Form 5558 (Application for Extension of Time to File Certain Employee Plan Returns) on or before the regular Form 5500 due date, which is seven months after the end of the plan year. Filing Form 5558 will extend the due date to 2-1/2 months beyond the regular deadline ..read more

Tolomeo v. R.R. Donnelley & Sons, Inc., 2023 WL 3455301 (N.D. Ill. 2023) Participants in a “mega” 401(k) plan (i.e., a plan with over $500 million in assets) brought this lawsuit claiming that their employer and plan benefits committee breached their fiduciary duty of prudence by allowing the plan to pay excessive bundled recordkeeping and administrative fees, and that the employer and its board of directors breached their duty to monitor those fees. The court denied the employer’s motion to dismiss the case under the Seventh Circuit’s “newly formulated pleading standard” for t ..read more

IRS Notice 2023-43 (May 25, 2023) Available at https://www.irs.gov/pub/irs-drop/n-23-43.pdf The IRS has issued Notice 2023-43, providing interim guidance on the expanded self-correction program under the Employee Plans Compliance Resolution System (EPCRS). As background, the SECURE 2.0 Act made sweeping changes to self-correction under EPCRS (see our Checkpoint article). While the changes technically took effect December 29, 2022, the extent to which the SECURE 2.0 Act changes plans’ current self-correction options is uncertain because the new law also grants the IRS cons ..read more

Form 8915-F (Qualified Disaster Retirement Plan Distributions and Repayments) and Instructions (Rev. Jan. 2023) Form Instructions The IRS has issued revised Form 8915-F and Instructions for individual taxpayers to report retirement plan distributions due to qualified disasters and repayments of disaster distributions. Form 8915-F is a “forever form,” designed to be used for distributions for qualified 2020, 2021, and later disasters, and for each year of reporting income from and repayment of those distributions (see our Checkpoint article). The revised Form 8915-F reflects several changes in ..read more

QUESTION: Due to the COVID-19 emergency, we have been required to extend deadlines for participants and beneficiaries to submit claims and appeals under our employee benefit plans. How does the end of the COVID-19 national emergency affect these extensions? ANSWER: Various plan-related deadlines have been extended—but for no longer than one year—by disregarding (tolling) the COVID-19 “outbreak period,” which ends 60 days after the end of the national emergency unless another end date is announced by the agencies (see our Checkpoint article). The COVID-19 national emergency ended on April ..read more

Hughes v. Northwestern University, 63 F.4th 615, 2023 WL 2607921 (7th Cir. 2023) Available at http://media.ca7.uscourts.gov/cgi-bin/OpinionsWeb/processWebInputExternal.pl?Submit=Display&Path=Y2023/D03-23/C:18-2569:J:Brennan:aut:T:fnOp:N:3020799:S:0 On remand from the U.S. Supreme Court (see our Checkpoint article), the Seventh Circuit Court of Appeals reexamined defined contribution plan participants’ allegations that the plan’s fiduciaries had breached ERISA’s duty of prudence by (1) failing to monitor and incurring excessive recordkeeping fees (in part due to revenue shari ..read more

QUESTION: We heard that SECURE 2.0 permits certain penalty-free distributions relating to personal or family emergency expenses. Can you tell us more about these distributions? ANSWER: SECURE 2.0 (see our Checkpoint article) adds a new exception to the 10% early distribution tax for distributions made after December 31, 2023, for purposes of meeting participants’ unforeseeable or immediate financial needs relating to necessary personal or family emergency expenses. Only one emergency personal expense distribution is permissible per calendar year in an amount up to the lesser of ..read more

Kaplan v. Saint Peter’s Healthcare Sys., 2023 WL 2071725 (D.N.J. 2023) Available at https://www.govinfo.gov/content/pkg/USCOURTS-njd-3_13-cv-02941/pdf/USCOURTS-njd-3_13-cv-02941-5.pdf A trial court has reconsidered whether a church-affiliated hospital’s retirement plan was a church plan exempt from ERISA’s funding and other requirements, reaching a different conclusion this time. As background, ERISA’s church plan exemption provides that a plan “established and maintained” by a church includes a plan “maintained” by a principal-purpose organization—an organization controlled b ..read more

Presidential Veto H.J. Res. 30 President Biden issued the first veto of his presidency on March 20, 2023, blocking H.J. Res. 30, a bill that would have nullified a DOL rule allowing retirement plan fiduciaries to consider the potential financial benefits of investing in funds that take into account climate change and other environmental, social, and corporate governance (“ESG”) factors without automatically running afoul of fiduciary duty requirements (see our Checkpoint article). The extent to which ESG considerations can be analyzed when selecting plan investments has been a subject o ..read more

QUESTION: We understand that SECURE 2.0 significantly expands the rules for self-correcting 401(k) plan errors. Can you tell us more about these changes? ANSWER: SECURE 2.0 (see our Checkpoint article) expands access to self-correction for 401(k) plans in multiple ways. As of December 29, 2022, self-correction under the IRS Employee Plan Compliance Resolution System (EPCRS) may cover any eligible inadvertent failure that would disqualify the plan, unless (1) the IRS identifies the error before actions have been taken that show a specific commitment to self-correct, or (2) the se ..read more