American Benefits Council
Benefits Byte


May 16, 2014

The Benefits Byte is the American Benefits Council’s regular e-mail and online newsletter for members only, providing timely reports on legislative, regulatory and judicial developments, along with updates on the Council’s activities in support of employer-sponsored benefit plans.

The Benefits Byte is published by the American Benefits Council, based on staff reports and edited by Jason Hammersla, Council director of communications. Contact information for Council staff related to specific topics can be found at the end of each story.

Click here to read past issues on the Benefits Byte Archive page.

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IRS Guidance Clarifies Treatment of Mid-Year Plan Amendments Under Windsor

The Internal Revenue Service (IRS) issued Notice 2014-37 on May 15, providing additional guidance for retirement plan administration under the U.S. Supreme Court's decision in U.S. vs. Windsor. Specifically, the notice amplifies Notice 2014-19 (issued April 4) to provide guidance on mid-year amendments to safe harbor 401(k) plans.

In light of the Windsor ruling, which struck down key sections of the Defense of Marriage Act, retirement plans must recognize same-sex marriages for purposes of issuing survivor benefits, obtaining spousal consent, eligibility for joint and survivor annuities and other administrative functions. In some cases, a plan amendment must be made to comply with the with the “state of celebration” standard established by the IRS under Revenue Ruling 2013-17.

Question No. 8 of Notice 2014-19 established that “the deadline to adopt a plan amendment is the later of (i) the otherwise applicable deadline under section 5.05 of Revenue Procedure 2007-44 [which established the staggered remedial amendment period,] or its successor, or (ii) December 31, 2014. Moreover, in the case of a governmental plan, any amendment made pursuant to this notice need not be adopted before the close of the first regular legislative session of the legislative body with the authority to amend the plan that ends after December 31, 2014.”

Under prevailing regulations, a 401(k) safe harbor plan must be adopted before the beginning of the plan year and be maintained throughout a full 12-month plan year, except as otherwise provided under sections 1.401(k)-3(g) of the tax code (relating to the reduction or suspension of safe harbor contributions) or other general guidance.

Notice 2014-37 clarifies that a 401(k) or (m) safe harbor plan can adopt a mid-year amendment pursuant to Notice 2014-19. “A plan will not fail to satisfy the requirements to be a […] 401(k) or (m) safe harbor plan merely because the plan sponsor adopts a mid-year amendment pursuant to Q&A-8 of Notice 2014-19.” This guidance is being provided to help non-calendar year plans, which would have had difficulty meeting the deadline without a mid-year amendment.

For more information, contact Jan Jacobson, senior counsel, retirement policy, at (202) 289-6700.

ERISA Advisory Council Announces 2014 Discussion Topics

The ERISA Advisory Council (EAC), a group of benefits experts established by Congress and appointed by the U.S. Department of Labor (DOL) to identify emerging benefits issues and advise the Secretary of Labor on health and retirement policy, has released its working group topics for 2014. These topics are:

The chair of the EAC for the 2014 term will be Neal S. Schelberg, senior partner at Proskauer Rose LLP (a Council board member company), representing employers on the panel. Other EAC members from Council board/member organizations are:

  • Ralph C. Derbyshire, senior vice president and deputy general counsel for FMR (Fidelity Investments) LLC, representing investment management.
  • Josh Cohen, head of institutional defined contribution at Russell Investment Group, representing investment counseling.
  • Christina R. Cutlip, managing director and head of plan sponsor services for TIAA-CREF, representing employers.
  • Kevin T. Hanney, director of pension investments for United Technologies Corporation, representing employers.
  • David C. Kaleda, a principal in the Fiduciary Responsibility group at Groom Law Group, Chartered. representing corporate trusts.
  • Mark Schmidke, shareholder at Ogletree, Deakins, Nash, Smoak & Stewart, representing Insurance.

Final reports from prior years are available on the EAC website. For more information, particularly if you are interested in testifying on the Council’s behalf, contact Jan Jacobson, senior counsel, retirement policy, at (202) 289-6700. 

The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council's members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.

Notice: the information contained herein is general in nature. It is not, and should not be construed as, accounting, consulting, legal or tax advice or opinion provided by the American Benefits Council or any of its employees. As required by the IRS, we inform you that any information contained herein was not intended or written to be used or referred to, and cannot be used or referred to (i) for the purpose of avoiding penalties under the Internal Revenue Code, or (ii) in promoting, marketing or recommending to another party any transaction or matter addressed herein (and any attachment).