Year End Planning Alert from the Employee Benefits & Executive Compensation Group

December 3, 2009

Types : Alerts

As we approach the end of the calendar year, some employee benefit plan deadlines  require your attention.  You may also wish to focus on some other items noted below before 2010 arrives or shortly thereafter in the new year.

Year-End 2009 Deadline for Pension Protection Act Amendments

Qualified pension, profit-sharing, and 401(k) savings plans must be amended by the end of the 2009 plan year (December 31, 2009 for calendar year plans), to comply with certain Pension Protection Act changes.  The necessary amendments address plan funding requirements, optional forms of benefits, maximum benefits payable, rollovers, and vesting.

New HIPAA Rules and Business Associate Agreements

New rules under the Health Insurance Portability and Accountability Act concerning security measures for private health information require employer action.  Most notably, each employer’s business associate agreements must be changed to incorporate a reference to the new security rules.

HEART Benefit Plan Issues for Military Personnel

The Heroes Earnings Assistance and Relief Tax Act provides several employee benefit-related advantages to eligible military personnel and their families.  These new requirements affect survivor benefits under qualified pension and savings plans, qualified reservist distributions of employee contributions from plans, and distributions of unused flexible spending account funds.

New Automatic Enrollment Rules

The IRS has issued detailed regulations concerning automatic enrollment in a 401(k) or 403(b) plan.  Employers should consider reviewing the rules to insure compliance and whether to adopt the new “safe harbor” provisions of the regulations.

Michelle Law Impact on Group Health Plans

Effective for plans years beginning on or after October 9, 2009, group health plans must be amended to allow full-time college students who are covered under the plan as dependents to take up to 12 months medical leave without losing coverage.

403(b) Plan Deadline

Sponsors of 403(b) plans have until December 31, 2009 to have a written plan document in place.

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