IRS notice warns against use of certain multiple employer welfare benefits arrangements

Article Abstract:

The IRS has issued Notice 95-34 in response to perceived abuses of the multiple employer exception to the voluntary employees' beneficiary association funding limitations of IRC section 419A. The IRS provides the exception for groups of 10 or more employers because the arrangement is insurance-like, and contributions to the plan are fully deductible. The Notice identifies instances when the IRS will disallow the exemption and the deductions because the plan is being used to for other purposes that funding legitimate welfare benefits.

Finance, Retirement benefits, Voluntary employees' beneficiary associations

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Federal common law of restitution requires return of employer contribution made by mistake

Article Abstract:

The US Court of Appeals for the 7th Circuit ruled in UIU Severance Pay Trust Fund v. Local Union No. 18-U that employer contributions made by mistake to a severance pay plan covered by ERISA should be returned under the common law doctrine of restitution. Common law was used because there was no ERISA provision authorizing such a refund, with the explanation that ERISA permits the return to employers of mistaken contributions but does not establish a cause of action for that purpose.

Cases, Restitution, Severance pay, Mistake (Law)

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More flexibility for trusts as beneficiaries of retirement plan benefits

Article Abstract:

The IRS has issued additional proposed regulations under IRC section 401(a)(9) which aid in the administration of distributions from defined contribution plans to trusts. The regulations clarify and simplify the rules for making statutory minimum required distributions to trusts. The rules on revocability and disclosure have been relaxed.

Laws, regulations and rules, Defined contribution plans

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