ERISA Roundup - Q4 2020
A NOTE FROM BDO’S NATIONAL ERISA PRACTICE LEADER
The start of a new year is a momentous occasion. For many of us, that’s especially true this year as we look forward to 2021 as a fresh beginning.
In the Employee Benefit Plan arena, we are anticipating a continued focus on telehealth and expanded benefits offerings as well as increased leveraging of employer digital communications for a work-from-home world. Additionally, Statement in Auditing Standards (SAS) 136 will bring significant changes to the industry - we at BDO are working diligently to lead implementation and share insights as we adopt the new standard.
In this issue of our ERISA Roundup, you’ll find informative pieces discussing ESOPs – one specifically geared toward architecture and engineering firms and another piece on potential exit strategies for retiring business owners. As always, I encourage you to follow along with our regular insights at www.bdo.com/erisa.
Wishing you the very best in the new year,
Beth Garner, Partner; Leader - Employee Benefit Plan Audits
IN THIS ISSUE...
Benefits Outlook for 2021: Telehealth, Mental Health, Digital Communications
The year 2020 was notable for the COVID-19 pandemic changing not only how and where people work, but also shifting (often dramatically) employee benefit needs.
Tech Re-strategizes Amid COVID-19 Complications
COVID-19 has caused disruption across all industries, forcing tech companies to evolve their strategies in order to weather the storm and capitalize on changes in customer need.
Why ESOPs Are Becoming More Popular Among Architecture and Engineering Firms
Every year, the National Center for Employee Ownership (NCEO) publishes a list of the nation’s 100 largest employee-owned companies.
2021 Cost-of-Living Adjustments for Qualifies Retirement Plans
The government’s annual cost-of-living adjustments (COLA) for 2021 have been announced by the Internal Revenue Service (IRS) and the Social Security Administration (SSA).
Documenting Late 401(k) Plan Deposits Due to COVID-19
Plan sponsors have a fiduciary obligation to ensure that participant 401(k) contributions (including participant loan repayments) are deposited into participant accounts as soon as reasonably possible.
Employee Ownership: Employee Stock Ownership Plans and Employee Ownership Trusts
As business owners inch closer to retirement, the decision about what should happen to their business, and to some degree their legacy as a business owner, becomes more pressing.
PBGC Revises Timeline to Calculate Premiums
The Pension Benefit Guaranty Corp. (PBGC) recently issued new guidance that gives single-employer pension plan sponsors an opportunity to reduce the variable-rate premiums that they owe for 2020, if they were planning on delaying their 2019 contributions until after they filed their premiums.
2021 DEADLINES AND IMPORTANT DATES FOR PLAN SPONSORS
January 2021
January 25: Action: File PBGC Form 200 by Jan. 25, Notice of Failure to Make Required Contributions, if plan sponsor of a single-employer defined benefit plan does not make a Jan 15 required contribution, causing the plan to have more than $1 million in unpaid contributions.
January 31: Action: Census data due Jan 31. Plan sponsor confirms the accuracy of the prior year’s census data to the recordkeeper. This information is used for ADP/ACP testing.
January 31: Distribution: Distribute IRS Form 1099-R to participants by Jan. 31.
January 31: Action: File Form 1096 paper transmittal by Jan. 31 for 2020 tax year.
February 2021
February 1: Action: Form 945 must be filed with the IRS by Feb 1.
February 15: Action: Review and approve compliance testing results sent by plan administrator by Feb. 15.
March 2021
March 1: Action: Multiple employer welfare arrangement (MEWA) plans must file the annual form M-1 by March 1.
March 2: Distribution: Distribute Form 1095-C to employees by March 2, to give information on health care coverage for 2019. (IRS changed this date from Jan. 31.
March 30: Action: Plans with publicly traded employer stock that follow Article 6A of the Regulation S-X (SEC format) must file Form 11-K with the Securities and Exchange Commission by March 30.
View All Deadlines and Important Dates
CONTRIBUTION PLAN LIMITS AND OTHER ROLLING NOTICES FOR 2021
In addition to those important deadlines and dates, plan sponsors should be aware of the contribution plan limits and other rolling notices for 2021:
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Employee salary deferral limits for 401(k), 403(b) and 457 plans will be $19,500. Age 50 catch-up contribution limit increases to $6,500.
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Health Savings Account contribution limit is $3,600 (single) and $7,200 (family). Age 55 catch-up contribution stays at $1,000.
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Traditional and Roth Individual Retirement Account contribution limit will be $6,000. catch-up contributions for participants age 50 and over is $1,000.
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Limitation for the annual benefit under a defined benefit plan under Section 415(b)(1)(A) will be $230,000.
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The dollar amount used to define “highly compensated employee” under Section 414(q)(1)(B) will be $130,000.
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Newly eligible employees must receive a Summary Plan Description (SPD) within 90 days after becoming covered by the Plan.
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Provide quarterly statements and fee information to participants.
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