Relief Measures Impacting Employee Benefit Plan Sponsors

In response to Hurricanes Harvey and Irma, the IRS announced that employer-sponsored retirement plans can make participant loans and hardship distributions available to participants and certain members of their families who live or work in the affected disaster areas designated for individual assistance by the Federal Emergency Management Agency (FEMA) – relaxing procedural and administrative rules that normally apply to participant loans and hardship distributions, including the abatement of the six-month ban on employee contributions following the hardship distribution.
 
This relief also allows individuals who live outside the disaster area to take a loan or hardship distribution to assist family or other dependents who live or work in the disaster area. However, the IRS has stressed that the tax treatment of such loans and distributions remains unchanged. The relief is available through January 31, 2018.
 
The Department of Labor has issued compliance guidance for impacted plans and FAQs for affected participants and beneficiaries.
 
The Pension Benefit Guaranty Corporation (PBGC) has announced it will waive late premium payment penalties and extending certain other deadlines for affected plans. The PBGC’s announcement provides information on the disaster relief, including which plans are eligible and how to make a claim for relief.

In an effort to help to those impacted, government agencies have announced relief measures, from tax extensions and hardship distributions to tax-exempt employer assistance, and even guidance on cyber threats related to hurricane relief.

For questions on employee benefit plan services, contact Ed Ryan, CPA at 703.652.1473 or please feel free to leave us a message below.

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Material discussed in this article is meant to provide general information and should not be acted on without professional advice tailored to your firm’s individual needs.



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