Thursday, October 9, 2008

DOL Final Regulation - Amendments to Safe Harbor for Distributions From Terminated Individual Account Plans and Termination of Abandoned Individual Ac

The DOL announced final rules on the distribution of benefits for missing nonspouse beneficiaries in terminated plans, the selection of annuity providers, and cross trading:

WASHINGTON — The U.S. Department of Labor has announced final rules pertaining to the requirements of the Pension Protection Act of 2006 (PPA). The new rules relate to distribution of 401(k) benefits for missing nonspouse beneficiaries in terminated plans, selection of annuity providers and cross trading of securities by plans governed by the Employee Retirement Income Security Act (ERISA).

The PPA amended the Internal Revenue Code to allow the rollover of certain retirement benefits of a deceased participant into a tax-favored inherited individual retirement account (IRA) created on behalf of a nonspouse beneficiary. The new rule (and a related class exemption) conforms to the PPA by amending existing distribution requirements for terminated defined contribution plans, including abandoned plans, to require rollovers into inherited IRAs for missing nonspouse beneficiaries.

In the annuity area, the department is issuing two final rules on selection of annuity providers. One rule limits the application of the "safest available" standard of Interpretive Bulletin 95-1 to defined benefit plans. The other is a final regulation providing guidance, in the form of a safe harbor, for the selection of annuity providers by fiduciaries for benefit distributions from individual account plans.

The final rule on cross trading addresses the content of the policies and procedures which must be adopted by an investment manager before engaging in cross trades of securities between clients, including employee benefit plans. The written policies and procedures must be fair and equitable to all account participants and must provide for appointment of a compliance officer who is responsible for periodically reviewing purchases and sales of securities made pursuant to the exemption to ensure compliance with the written policies and procedures.

Related Links

DOL Final Regulation - Amendments to Interpretive Bulletin 95-1

The DOL announced final rules on the distribution of benefits for missing nonspouse beneficiaries in terminated plans, the selection of annuity providers, and cross trading:

WASHINGTON — The U.S. Department of Labor has announced final rules pertaining to the requirements of the Pension Protection Act of 2006 (PPA). The new rules relate to distribution of 401(k) benefits for missing nonspouse beneficiaries in terminated plans, selection of annuity providers and cross trading of securities by plans governed by the Employee Retirement Income Security Act (ERISA).

The PPA amended the Internal Revenue Code to allow the rollover of certain retirement benefits of a deceased participant into a tax-favored inherited individual retirement account (IRA) created on behalf of a nonspouse beneficiary. The new rule (and a related class exemption) conforms to the PPA by amending existing distribution requirements for terminated defined contribution plans, including abandoned plans, to require rollovers into inherited IRAs for missing nonspouse beneficiaries.

In the annuity area, the department is issuing two final rules on selection of annuity providers. One rule limits the application of the "safest available" standard of Interpretive Bulletin 95-1 to defined benefit plans. The other is a final regulation providing guidance, in the form of a safe harbor, for the selection of annuity providers by fiduciaries for benefit distributions from individual account plans.

The final rule on cross trading addresses the content of the policies and procedures which must be adopted by an investment manager before engaging in cross trades of securities between clients, including employee benefit plans. The written policies and procedures must be fair and equitable to all account participants and must provide for appointment of a compliance officer who is responsible for periodically reviewing purchases and sales of securities made pursuant to the exemption to ensure compliance with the written policies and procedures.

Related Links

DOL Final Regulation - Selection of Annuity Providers - Safe Harbor for Individual Account Plans

The DOL announced final rules on the distribution of benefits for missing nonspouse beneficiaries in terminated plans, the selection of annuity providers, and cross trading:

WASHINGTON — The U.S. Department of Labor has announced final rules pertaining to the requirements of the Pension Protection Act of 2006 (PPA). The new rules relate to distribution of 401(k) benefits for missing nonspouse beneficiaries in terminated plans, selection of annuity providers and cross trading of securities by plans governed by the Employee Retirement Income Security Act (ERISA).

The PPA amended the Internal Revenue Code to allow the rollover of certain retirement benefits of a deceased participant into a tax-favored inherited individual retirement account (IRA) created on behalf of a nonspouse beneficiary. The new rule (and a related class exemption) conforms to the PPA by amending existing distribution requirements for terminated defined contribution plans, including abandoned plans, to require rollovers into inherited IRAs for missing nonspouse beneficiaries.

In the annuity area, the department is issuing two final rules on selection of annuity providers. One rule limits the application of the "safest available" standard of Interpretive Bulletin 95-1 to defined benefit plans. The other is a final regulation providing guidance, in the form of a safe harbor, for the selection of annuity providers by fiduciaries for benefit distributions from individual account plans.

The final rule on cross trading addresses the content of the policies and procedures which must be adopted by an investment manager before engaging in cross trades of securities between clients, including employee benefit plans. The written policies and procedures must be fair and equitable to all account participants and must provide for appointment of a compliance officer who is responsible for periodically reviewing purchases and sales of securities made pursuant to the exemption to ensure compliance with the written policies and procedures.

Related Links

DOL Final Regulation - Statutory Exemption for Cross-Trading of Securities

The DOL announced final rules on the distribution of benefits for missing nonspouse beneficiaries in terminated plans, the selection of annuity providers, and cross trading:

WASHINGTON — The U.S. Department of Labor has announced final rules pertaining to the requirements of the Pension Protection Act of 2006 (PPA). The new rules relate to distribution of 401(k) benefits for missing nonspouse beneficiaries in terminated plans, selection of annuity providers and cross trading of securities by plans governed by the Employee Retirement Income Security Act (ERISA).

The PPA amended the Internal Revenue Code to allow the rollover of certain retirement benefits of a deceased participant into a tax-favored inherited individual retirement account (IRA) created on behalf of a nonspouse beneficiary. The new rule (and a related class exemption) conforms to the PPA by amending existing distribution requirements for terminated defined contribution plans, including abandoned plans, to require rollovers into inherited IRAs for missing nonspouse beneficiaries.

In the annuity area, the department is issuing two final rules on selection of annuity providers. One rule limits the application of the "safest available" standard of Interpretive Bulletin 95-1 to defined benefit plans. The other is a final regulation providing guidance, in the form of a safe harbor, for the selection of annuity providers by fiduciaries for benefit distributions from individual account plans.

The final rule on cross trading addresses the content of the policies and procedures which must be adopted by an investment manager before engaging in cross trades of securities between clients, including employee benefit plans. The written policies and procedures must be fair and equitable to all account participants and must provide for appointment of a compliance officer who is responsible for periodically reviewing purchases and sales of securities made pursuant to the exemption to ensure compliance with the written policies and procedures.

Related Links

Employee Plans News – Fall 2008 Edition

The IRS released Employee Plans News - Fall 2008 Edition. It contains the following articles:

  • Weathering the Storm: Advising Clients about Loans and Hardship Withdrawals from Retirement Plans
  • Web Spins
  • Update on Pre-Approved Plan Program for 403(b) Plans
  • Take Our Survey: Help Us Expand and Improve Our
    Self-Correction Program!
  • Relief for Hurricane Victims
  • Critical Priorities...With Monika Templeman
  • Remind Your Clients to Do the Right Thing Even When Times are Tough!
  • Spotlight on ERPA
  • We're Glad You Asked!
  • Highlights of the Retirement News for Employers
  • Employee Plans Completes Another Successful IRS Nationwide Tax Forum Season
  • Employee Plans Published Guidance
  • Ordering the Form 5500, Schedules, and Instructions
  • VCP Applications – Appendix F
  • DOL Corner
  • PBGC Insights
  • Calendar of EP Benefits Conferences.