ERISA Corrections Beyond EPCRS – Recording Now Available

We recently hosted a Lunch & Learn webinar on a topic that is both nuanced and crucial for retirement plan professionals: ERISA corrections outside the guidance of the IRS’s Employee Plans Compliance Resolution System (EPCRS).

The session brought together financial advisers, recordkeepers, TPAs, plan auditors, and other industry professionals for a practical discussion on how to address plan issues that fall into the “gray areas” of compliance—those not directly addressed by EPCRS.

🔍 What We Covered:

  • Real-life examples of errors that didn’t qualify for EPCRS treatment
  • Creative but compliant strategies for resolution
  • Legal considerations and risk mitigation techniques
  • Best practices for documenting and communicating corrections

Whether you’re responsible for plan administration, auditing, or advising plan sponsors, this webinar provided actionable insights to help you handle unusual or complex correction scenarios with confidence.

🎥 Missed the Webinar?

No problem! The full recording is available here:
👉 Watch the webinar

We’re grateful to everyone who attended and engaged with thoughtful questions and comments. If you’d like to discuss a specific correction scenario or need help navigating an issue outside EPCRS, feel free to reach out to our team.

Stay tuned for upcoming events and resources focused on practical ERISA compliance!

Attorney Lisa Dursey Returns to ERISA Benefits Law as Partner

ERISA Benefits Law Group, PLLC is delighted to welcome back ERISA attorney Lisa Dursey as Partner to the firm. Lisa returns to ERISA Benefits Law after serving as general counsel for a cybersecurity artificial intelligence company and homeschooling her two children.

Lisa D. Dursey
(602) 661-7785
[email protected]
Bio: https://erisabenefitslaw.com/lisa-dursey/

Lisa’s ERISA practice focuses on advising employers on the design, implementation, and administration of all types of employee benefits plans. She is passionate about providing comprehensive, easily digestible, and pragmatic advice for her clients. Clients seek her guidance to help them realize the maximum value from their employee benefit programs.

Lisa assists clients with a wide range of benefits matters, including qualified and nonqualified retirement plans, executive compensation programs, health and welfare programs, and other fringe benefit programs. She regularly advises employers on design changes to their benefit plans to address regulatory updates and to optimize the company’s benefit offerings. Lisa is also experienced in helping plan sponsors correct operational failures, including through corrective filings with the IRS and Department of Labor when necessary.

Lisa’s return provides ERISA Benefits Law further depth to meet our clients’ needs. Lisa, Kristi and Erwin bring a team approach to each client and each matter, allowing us to apply the necessary expertise to continue solving your ERISA and employee benefits-related legal issues as efficiently and effectively as possible.

Learn More – Lisa’s Full Bio

IRS Announces 2024 HSA Contribution Limits, HDHP Minimum Deductibles and HDHP Maximum Out-of-Pocket Amounts

The IRS has announced 2024 HSA and HDHP limits as follows:

Annual HSA contribution limitation. For calendar year 2024, the annual limitation on deductions for HSA contributions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $4,150 (up from $3,850 in 2023), and the annual limitation on deductions for HSA contributions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $8,300 (up from $7,750 in 2023).

High deductible health plans. For calendar year 2024, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,600 for self-only coverage or $3,200 for family coverage (up from $1,500 and $3,000 in 2023), and with respect to which the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $8,050 for self-only coverage or $16,100 for family coverage (up from $7,500 and $15,000 in 2023).

Rev. Proc 2023-23

Impact of SECURE Act 2.0 on Employers

The Consolidated Appropriations Act, 2023, a 4,155-page omnibus bill, was approved by Congress in its final form on December 23, 2022, and is expected to be signed by President Joe Biden before government funding runs out on December 30, 2022. The text of the SECURE 2.0 of 2022 is called “Division T” of the Appropriations Act and can be found on pages 2046 through 2404 of the bill. The Senate Finance Committee has issued a summary of the SECURE Act 2.0.

The SECURE Act 2.0 contains several important rules for employers operating retirement plans. Many of these rules mandate that employers make operational changes to their retirement plans, and complying with these regulatory changes will require careful administration by all employers. Following is a non-comprehensive overview of some of the Act’s most important provisions for employers.

Increased RMD Age

A beneficiary of qualified retirement plans and regular IRAs is currently required to start taking distributions from his or her account by April 1 following the year he or she attains age 72. Effective on January 1, 2023, the Act raises the age for required minimum distributions (RMDs) as follows:

  • To age 73 for a person who reaches age 72 after December 31, 2022 and age 73 before January 1, 2033; and
    • To age 75 for a person who reaches age 74 after December 31, 2032.

Higher Catch-Up Limits for Plan Participants Ages 60 to 63

Participants over age 50 who make elective deferrals to 401(k), 403(b), and SIMPLE plans are permitted to make “catch-up” contributions in addition to their regular contributions. The current maximum amounts for 2023 are $7,500 for 401(k) and 403(b) plans and $3,500 for SIMPLE plans. These amounts are adjusted for inflation.

Starting in 2025, plan participants can make an additional catch-up contribution after attaining 60 and prior to attaining age 64. For 403(b) and 401(k) plans, the amount is the greater of $10,000 or 50% more than the regular catch-up amount. For SIMPLE plans, the amount is the greater of $5,000 or 50% more than the regular catch-up amount.

“Rothification” Requirement for Catch-Up Contributions

Starting in 2024, catch-up contributions to 401(k) and 403(b) plans must be treated as Roth contributions. There is an exception for employees who made $145,000 (as adjusted for inflation) or less in the previous year.

Matching of Student Loan Repayments

Employers have long wondered how to help employees who have large student loan burdens. The SECURE Act 2.0 provides an answer: it permits an employer to make matching contributions under a 401(k) plan, 403(b) plan, or SIMPLE IRA with respect to “qualified student loan payments.” A qualified student loan payment is broadly defined as any indebtedness incurred by the employee solely to pay qualified higher education expenses of the employee.

Non-Monetary Incentives for Employees

The Act permits employers to offer de minimis financial incentives, not paid for with plan assets, such as low-dollar gift cards, to boost employee participation in workplace retirement plans. Such de minimis financial incentives would have previously been prohibited.

Expanded Automatic Enrollment

Effective for plan years beginning after 2024, newly adopted 401(k) and 403(b) plans will be required to automatically enroll participants upon becoming eligible to make elective deferrals. The initial automatic enrollment percentage must be at least 3% of compensation and must be increased annually until it is at least 10%. Employees will be able to opt out of making these elective deferrals.

Exceptions to Early Withdrawal Penalty

The SECURE Act 2.0 adds a variety of additional exceptions to the 10% penalty for pre-age 59 1/2 withdrawals from IRAs and retirement plans.

Effective in 2023, the following types of distributions are exempt from the penalty: (1) Distributions of up to $22,000 for individuals affected by a federally declared disaster that occurred on or after January 26, 2021; (2) Distributions to individuals with a terminal illness; and (3) Corrective distributions made to highly compensated employees from 401(k) and 403(b) plans as a result of the plan’s failure to pass certain nondiscrimination tests.

Effective in 2024, the following types of distributions are exempt from the penalty: (1) Distributions of up to $1,000 for unforeseeable or immediate emergency expenses; and (2) Distributions to victims of domestic abuse, up to the lesser of $10,000 or 50% of the account balance. Both of these distributions have the option to allow repayment to the plan within 3 years.

Effective 3 years after the date of the enactment of the SECURE Act 2.0, distributions of up to $2,500 per year for the payment of premiums for certain long term care insurance contracts.

Please contact us with any questions about how to implement the changes required by the SECURE Act 2.0.

IRS Announces COLA Adjusted Retirement Plan Limitations for 2023

The Internal Revenue Service today released Notice 2022-55 announcing cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2023.

Highlights Affecting Plan Sponsors of Qualified Plans for 2023

  • The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $20,500 to $22,500.
  • The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan increased from $6,500 to $7,500.
  • The limitation under Section 408(p)(2)(E) regarding SIMPLE retirement accounts remains is increased from $14,000 to $15,500.
  • The limit on annual contributions to an IRA increased from $6,000 to $6,500. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
  • The limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) is increased from $245,000 to $265,000.
  • The limitation for defined contribution plans under Section 415(c)(1)(A) is increased for 2022 from $61,000 to $66,000.
  • The annual compensation limit under Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $305,000 to $330,000.
  • The dollar limitation under Section 416(i)(1)(A)(i) concerning the definition of “key employee” in a top-heavy plan is increased from $200,000 to $215,000.
  • The dollar amount under Section 409(o)(1)(C)(ii) for determining the maximum account balance in an employee stock ownership plan subject to a five year distribution period is increased from $1,230,000 to $1,330,000, while the dollar amount used to determine the lengthening of the five year distribution period is increased from $245,000 to $265,000.
  • The limitation used in the definition of highly compensated employee under Section 414(q)(1)(B) is increased from $135,000 to $150,000.

The IRS previously updated Health Savings Account limits for 2023. See our post here.

The following chart summarizes various significant benefit Plan limits for 2021 through 2023:

Type of Limitation202320222021
415 Defined Benefit Plans$265,000$245,000$230,000
415 Defined Contribution Plans$66,000$61,000$58,000
Defined Contribution Elective Deferrals$22,500$20,500$19,500
Defined Contribution Catch-Up Deferrals$7,500$6,500$6,500
SIMPLE Employee Deferrals$15,500$14,000$13,500
SIMPLE Catch-Up Deferrals$3,500$3,000$3,000
Annual Compensation Limit$330,000$305,000$290,000
SEP Minimum Compensation$750$650$650
SEP Annual Compensation Limit$330,000$305,000$290,000
Highly Compensated$150,000$135,000$130,000
Key Employee (Officer)$215,000$200,000$185,000
Income Subject To Social Security Tax  (FICA)$160,200$147,000$142,800
Social Security (FICA) Tax For ER & EE (each pays)6.20%6.20%6.20%
Social Security (Med. HI) Tax For ERs & EEs (each pays)1.45%1.45%1.45%
SECA (FICA Portion) for Self-Employed12.40%12.40%12.40%
SECA (Med. HI Portion) For Self-Employed2.90%2.90%2.90%
IRA Contribution$6,500$6,000$6,000
IRA Catch-Up Contribution$1,000$1,000$1,000
HSA Max. Contributions Single/Family Coverage$3,850/ $7,750$3,650/ $7,300$3,600/ $7,200
HSA Catchup Contributions$1,000$1,000$1,000
HSA Min. Annual Deductible Single/Family$1,500/
$3,000
$1,400/ $2,800$1,400/ $2,800
HSA Max. Out Of Pocket Single/Family$7,500/
$14,100
$7,050/ $14,100$7,000/ $14,000

IRS Announces 2023 HSA Contribution Limits, HDHP Minimum Deductibles and HDHP Maximum Out-of-Pocket Amounts

The IRS has announced 2023 HSA and HDHP limits as follows:

Annual HSA contribution limitation. For calendar year 2023, the annual limitation on deductions for HSA contributions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,850 (up from $3,650 in 2022), and the annual limitation on deductions for HSA contributions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $7,750 (up from $7,300 in 2022).

High deductible health plans. For calendar year 2023, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,500 for self-only coverage or $3,000 for family coverage (up from $1,400 and $2,800 in 2022), and with respect to which the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $7,500 for self-only coverage or $15,000 for family coverage (up from $7,050 and $14,100 in 2022).

Rev. Proc 2022-24

IRS Announces COLA Adjusted Retirement Plan Limitations for 2022

The Internal Revenue Service today released Notice 2021-61 announcing cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2022.

Highlights Affecting Plan Sponsors of Qualified Plans for 2022

  • The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $19,500 to $20,500.
  • The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan remains unchanged at $6,500.
  • The limitation under Section 408(p)(2)(E) regarding SIMPLE retirement accounts remains is increased from $13,500 to $14,000.
  • The limit on annual contributions to an IRA remains unchanged at $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
  • The limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) is increased from $230,000 to $245,000.
  • The limitation for defined contribution plans under Section 415(c)(1)(A) is increased for 2022 from $58,000 to $61,000.
  • The annual compensation limit under Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $290,000 to $305,000.
  • The dollar limitation under Section 416(i)(1)(A)(i) concerning the definition of “key employee” in a top-heavy plan is increased from $185,000 to $200,000.
  • The dollar amount under Section 409(o)(1)(C)(ii) for determining the maximum account balance in an employee stock ownership plan subject to a five year distribution period is increased from $1,165,000 to $1,230,000, while the dollar amount used to determine the lengthening of the five year distribution period is increased from $230,000 to $245,000.
  • The limitation used in the definition of highly compensated employee under Section 414(q)(1)(B) is increased from $130,000 to $135,000.

The IRS previously updated Health Savings Account limits for 2021. See our post here.

The following chart summarizes various significant benefit Plan limits for 2020 through 2022:

Type of Limitation202220212020
415 Defined Benefit Plans$245,000$230,000$230,000
415 Defined Contribution Plans$61,000$58,000$57,000
Defined Contribution Elective Deferrals$20,500$19,500$19,500
Defined Contribution Catch-Up Deferrals$6,500$6,500$6,500
SIMPLE Employee Deferrals$14,000$13,500$13,500
SIMPLE Catch-Up Deferrals$3,000$3,000$3,000
Annual Compensation Limit$305,000$290,000$285,000
SEP Minimum Compensation$650$650$600
SEP Annual Compensation Limit$305,000$290,000$285,000
Highly Compensated$135,000$130,000$130,000
Key Employee (Officer)$200,000$185,000$185,000
Income Subject To Social Security Tax  (FICA)$147,000$142,800$137,700
Social Security (FICA) Tax For ER & EE (each pays)6.20%6.20%6.20%
Social Security (Med. HI) Tax For ERs & EEs (each pays)1.45%1.45%1.45%
SECA (FICA Portion) for Self-Employed12.40%12.40%12.40%
SECA (Med. HI Portion) For Self-Employed2.90%2.90%2.90%
IRA Contribution$6,000$6,000$6,000
IRA Catch-Up Contribution$1,000$1,000$1,000
HSA Max. Contributions Single/Family Coverage$3,650/ $7,300$3,600/ $7,200$3,550/ $7,100
HSA Catchup Contributions$1,000$1,000$1,000
HSA Min. Annual Deductible Single/Family$1,400/ $2,800$1,400/ $2,800$1,400/ $2,800
HSA Max. Out Of Pocket Single/Family$7,050/ $14,100$7,000/ $14,000$6,900/ $13,800

IRS Announces 2022 HSA Contribution Limits, HDHP Minimum Deductibles and HDHP Maximum Out-of-Pocket Amounts

The IRS has announced 2022 HSA and HDHP limits as follows:

Annual HSA contribution limitation. For calendar year 2022, the annual limitation on deductions for HSA contributions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,650 (up from $3,600 in 2021), and the annual limitation on deductions for HSA contributions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $7,300 (up from $7,200 in 2021).

High deductible health plans. For calendar year 2022, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,400 for self-only coverage or $2,800 for family coverage (unchanged from 2021), and with respect to which the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $7,050 for self-only coverage or $14,100 for family coverage (up from $7,000 and $14,000 in 2021).

Rev. Proc 2021-25

COVID Stimulus Bill provides Free COBRA Coverage

On March 11, 2021, the American Rescue Plan Act of 2021 (“ARPA”) was signed into law by President Biden. The ARPA includes several significant health, pension funding, executive compensation and other tax changes. Notably, the ARPA provides temporary COBRA and Affordable Care Act subsidies intended to help people maintain health insurance during the pandemic.

Six months of free cobra

The ARPA provides employers a 100% COBRA subsidy for “assistance eligible individuals” where the qualifying event is an involuntary termination of employment or reduction in hours. An “assistance eligible individual” is any COBRA qualified beneficiary who loses group health coverage on account of a covered employee’s reduction in hours of employment or involuntary termination of employment. The subsidy applies not only to federal COBRA coverage, but also to state law programs that provide comparable continuation coverage.

For a period of up to six months, an “assistance eligible individual” is treated as having paid their COBRA coverage in full if the individual timely elects COBRA coverage. This means the person to whom the premiums are usually paid cannot collect the premium from the assistance eligible individual. One hundred percent of the premium is subsidized by the federal government via a tax credit mechanism.

Tax Credit

The tax credit works by allowing the “person to whom premiums are payable” (the employer for a self-insured plan and the insurer for a fully insured plan) to claim a tax credit for the COBRA premium assistance that was provided to an assistance eligible individual for any period of COBRA coverage during the subsidy period of April through September 2021.

This credit applies against that entity’s liability for the Medicare Hospital Insurance (“HI”) tax (i.e., the 1.45% Medicare payroll tax). It also applies as a credit against any applicable similar tax under the Railroad Retirement Tax Act (“RRTA”) imposed on compensation paid to railroad employees and representatives. The amount of the credit generally cannot exceed the HI tax (or RRTA tax), reduced by any credits otherwise allowed under other COVID-19 relief acts (the Coronavirus Aid, Relief, and Economic Security Act or the Families First Coronavirus Response Act).

The ARPA provides that the IRS could allow such credits to be advanced, and the IRS may issue further guidance about the mechanics of such an advance.

DURATION OF SUBSIDY PERIOD

The ARPA COBRA subsidy period is between April 1, 2021 and September 30, 2021. Importantly, the ARPA subsidy is available only to those whose initial COBRA period ends (or would have ended if COBRA had been elected/did not lapse) either during or after this six-month period.  The subsidy does not lengthen the COBRA period.

OPTIONAL New Election Right

Employers are permitted to allow individuals who are eligible for ARPA COBRA relief to change elections to other plan options that have the same or lower cost premiums. This election right is optional and employers are not required to offer it.

Notification Requirement

Plan administrators must notify eligible employees by May 31, 2021 (60 days after April 1, 2021), and the notice must include a description of the extended election options as well as certain plan information. The U.S. Department of Labor is required to issue model COBRA notices addressing the subsidy, and we expect the government agencies to issue guidance on various issues related to the subsidy in the coming weeks.

Please reach out to your ERISA Benefits Law contact if you have any questions about the implementation of this COBRA relief.

American Rescue Plan Act of 2021, H.R. 1319

Presence Not Required – IRS Extends Remote Signature Procedures for Qualified Plans

The IRS has extended temporary relief allowing plan representatives to witness participant elections or spousal waivers via videoconference until June 30, 2021. 

The IRS initially provided relief from the physical presence requirement from January 1, 2020 through December 31, 2020 in IRS Notice 2020-42 in response to the COVID-19 related social distancing restrictions. On December 22, 2020, the IRS extended that relief through June 30, 2020 through IRS Notice 2021-03.

The relief provides that participant elections required to be witnessed by a plan representative or notary public, including spousal consent, may be satisfied using alternative procedures that do not require physical presence. For a participant election witnessed by a notary public, the physical presence requirement is deemed satisfied with remote notarization using live audio-video technology that satisfies certain requirements. For a participant or spousal election witnessed by a plan representative, the physical presence requirement is deemed satisfied if an audio-video system is used that satisfies the following requirements:

  1. The individual signing the election presents a valid photo ID to the plan representative during the videoconference (transmitting the ID before or after the videoconference is not good enough);
  2. The video conference is live and allows direct interaction between the participant and plan representative;
  3. The individual faxes or electronically transmits a legible copy of the signed document to the plan representative on the same day it is signed; and
  4. After receiving the signed document, the plan representative acknowledges that the signature has been witnessed by the plan representative and transmits the signed document, including the acknowledgement, back to the individual using an electronic medium the individual can easily access.

Notice 2021-03