COBRA Litigation Risk on the Rise

If you are an employer that is subject to COBRA, you are probably aware that there are significant penalties that the Department of Labor can assess if you fail to offer coverage or give proper COBRA notice to employees or beneficiaries who lose the health coverage that you provide. These penalties are up to $110 per day for each violation, and they can add up quickly. This alone causes most employers and vendors to take COBRA compliance seriously. What you may not know is that these same employees or beneficiaries can also sue you for common and inadvertent COBRA compliance issues.

COBRA Litigation Risk on the Rise

COBRA Lawsuits

Unfortunately, there appears to be a new wave of class-action lawsuits targeting employers who may have used an outdated COBRA notice or maybe did not give clear instructions on where to mail COBRA premiums or really any number of other COBRA compliance violations.

One of the firms filing these lawsuits is ClassAction.com. Visiting their web site you will note a list of common mistakes employers make that can lead to litigation. These mistakes involve more than just missing deadlines in providing a COBRA election notice. The list includes contacting only the employee losing health coverage and forgetting to also contact the covered spouse and dependent children—remember each covered family member has an individual COBRA election right.

The ClassAction.com website also boasts about million dollar settlements recently won on behalf of individuals whose COBRA rights were either violated or not administered properly. This should be a wake-up call for employers to examine their COBRA procedures to ensure full compliance. Given the number of furloughs and lay-offs occurring throughout the U.S. due to COVID-19, this COBRA examination or audit becomes urgent.

Reviewing COBRA Practices

Findley stands ready to assist employers in reviewing their COBRA practices. This can even be in the context of a full ERISA audit. Since many employers outsource COBRA administration to a third party, Findley can also help employers review those administrative agreements and recommend changes to indemnification provisions to protect the employer from the administrator’s failures or omissions.

For more information about auditing COBRA administration and litigation risk, please contact Bruce Davis in the form below.

Published May 29, 2020

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Copyright © 2020 by Findley, Inc. All rights reserved.

2020 Defined Benefit Plan Compliance Calendar

Calendar Plan Year & Calendar Employer Tax Year*

defined benefits plan compliance calendar 2020 January through June
defined benefits plan compliance calendar 2020 July through December

January 2020  

15   Due date to make fourth required quarterly contribution for 2019 plan year

31   Last day to file Form 945 to report withheld federal income tax from distributions

31   Last day to furnish Form 1099-R to recipients of distributions during 2019 calendar year

February 2020

28   Last day to file Form 1096 and Form 1099-R on paper with the IRS

March 2020

31   Last day to file Form 1099-R electronically with the IRS

31   Deadline for enrolled actuary to issue AFTAP certification for current year to avoid presumption for benefit restrictions (if applicable)

April 2020

01   Presumed AFTAP takes effect unless and until enrolled actuary issues certification of AFTAP for current plan year (if applicable).

01   Last day to pay initial required minimum distributions to applicable plan participants

15   Due date to make first required quarterly contribution for 2020 plan year

15   Last day to file financial and actuarial information under ERISA section 4010 with PBGC (if applicable)

15   Last day for C corporation employer plan sponsors to make contributions and take tax deduction for 2019 without corporate tax return extension

15   Last day to furnish Annual Funding Notice (for plans covered by PBGC that have more than 100 participants)

May 2020

01   Last day to provide notice of benefit restrictions, if restrictions are applicable as of April 1, 2020

July 2020

31   Due date to make second required quarterly contribution for 2020 plan year

31   Last day to furnish Summary of Material Modifications (SMM) to participants and beneficiaries receiving benefits

31   Last day to file Form 5500 for 2019 without extension.

31   Last day to file Form 8955-SSA without extension

31   Last day to provide a notice to terminated vested participants describing deferred vested retirement benefits (in conjunction with Form 8955-SSA)

31   (or the day Form 5500 is filed, if earlier) – Last day to furnish Annual Funding Notice (for PBGC covered plans with 100 or fewer participants without extension)

31   Last day (unextended deadline) to file Form 5330 and pay excise tax on nondeductible contributions and prohibited transactions (if applicable)

September 2020

15   Last day to pay balance of remaining required contributions for 2019 plan year to satisfy minimum funding requirements.

30   Last day to furnish Summary Annual Report to participants and beneficiaries (for non-PBGC covered plans)

30   Last day for enrolled actuary to issue AFTAP certification for current plan year

October 2020

01   If enrolled actuary does not issue AFTAP certification for plan year, then AFTAP for the plan year is presumed to be less than 60 percent and plan will be subject to applicable benefit restrictions.

15   Last day to file Form 5500 (with extension)

15   Last date to file Form 8955-SSA (with extension)

15   Last day to provide a notice to terminated vested participants describing deferred vested retirement benefits (in conjunction with Form 8955-SSA)

15   Due date to make third required quarterly contribution for 2020 plan year

15   Last day to file PBGC comprehensive PBGC premium filing and pay premiums due (for plans covered by PBGC)

31   Last day to provide notice of benefit restrictions, if restrictions are applicable as of October 1, 2020

December 2020

15   Last day (with extension) to furnish Summary Annual Report (for non-PBGC covered plans)

31   Last day for enrolled actuary to issue a certification of the specific AFTAP for current year if a range certification was previously issued

31   Last day for plan sponsors to adopt discretionary plan amendments that would be effective for the current plan year

*This calendar is designed to provide a general overview of certain key compliance dates and is not meant to indicate all possible compliance dates that may affect your plan.

© 2020 Findley • All rights reserved

If you would like more specific information about each compliance item, you may review or print the calendar below.

Print 2020 Detailed Benefit Plan Compliance Calendar

Interested in other compliance calendars?

Defined Contribution

Health & Welfare

2020 Health and Group Benefits Plan Compliance Calendar

Calendar Plan Year & Calendar Employer Tax Year*

2020 Health and Group Benefits Plan Compliance Calendar January through June
2020 Health and Group Benefits Plan Compliance Calendar July through December

January 2020

31   Last day to report on Form W-2 to employees the cost of applicable employer-sponsored coverage under a group health plan

February 2020

28   Paper Filing – Last day for applicable large employer member to file one or more Forms 1094-C and to file Form 1095-C for each employee who was a full-time employee for any month of the calendar year 2019

28   Paper Filing – Last day for person that provides minimum essential health coverage to an individual during calendar year 2019 to file an information return with the IRS reporting the coverage. Filers will use Form 1094-B, Transmittal of Health Coverage Information Returns, to submit Forms 1095-B, Health Coverage, to IRS.

28   Notice of Breach of Unsecured Protected Health Information – breaches affecting fewer than 500 individuals. Last day for covered entities to notify HHS of a breach affecting fewer than 500 individuals. (Covered entities must notify affected individuals of such a breach without unreasonable delay and in no case later than 60 days following the discovery of a breach.)

March 2020

02   Last day to file electronically with DOL Form M-1 annual report for MEWAs (and certain entities claiming exception) for 2019 (without extension)

02   Last day for filers of IRS For 1095-B, Health Coverage, to furnish a copy of Form 1095-B to the person identified as the “responsible individual” on the form for coverage in 2018

02   Last day for an applicable large employer member to furnish a Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, to each of its full-time employees

31   Electronic Filing – Last day for an applicable large employer member to file one or more Forms 1094-C and to file a Form 1095-C for each employee who was a full-time employee for any month of the calendar year 2019 bb

31  Electronic Filing – Last day for person that provides minimum essential coverage to an individual during calendar-year 2018 to file an information return with the IRS reporting the coverage. Filers will use Form 1094-B, Transmittal of Health Insurance Offer and Coverage Information Returns, to submit Forms 1095-B, Health Coverage, to IRS

May 2020

15   Last day (unextended deadline) to file Form 990 series for a 2019 VEBA. An automatic filing extension of 6 months may be requested by filing Form 8868 by the due date of the Form 990

July 2020

28   Last day to furnish Summary of Material Modifications (SMM) to participants and beneficiaries receiving benefits

31   Last day to file Form 5500 for 2019 without extension

31   Last day (unextended deadline) to file Form 5330 and pay excise tax on disqualified benefits underfunded welfare plans

31   Last day (unextended deadline) to file Form 5330 and pay excise tax on certain excess fringe benefits

September 2020

30   Last day to furnish Summary Annual Report (SAR) for 2019 plan year to participants and beneficiaries if an extension to file Form 5500 was not obtained

October 2020

Prior to Oct. 15, 2020 – Medicare Part D Creditable Coverage Notice – Employers offering prescription drug coverage to Medicare Part D eligible individuals must notify those individuals whether the offered prescription drug coverage is creditable coverage. Notice must be provided prior to Oct. 15, 2020.

15   Last day to file Form 5500 with extension

December 2020

15   Last day (with extension) to furnish Summary Annual Report (SAR) for 2019 plan year to participants and beneficiaries

*This calendar is designed to provide a general overview of certain key compliance dates and is not meant to indicate all possible compliance dates that may affect your plan.

Copyright © 2020 by Findley, Inc. All rights reserved.

To access other selected requirements with no specific deadline plus a detailed description of each compliance item, click below.

View 2020 Detailed Health and Welfare Plan Compliance Calendar/Checklist and other selected requirements with no specific deadline

Interested in other compliance calendars?

Defined Benefit

Defined Contribution

2020 Defined Contribution Plan Compliance Calendar

Calendar Plan Year & Calendar Employer Tax Year*

defined contribution plan compliance calendar 2020 January through June
defined contribution plan compliance calendar 2020 July through December

January 2020

31   Last day to file Form 945 to report withheld federal income tax from distributions

31   Last day to furnish Form 1099-R to recipients of distributions in 2019

February 2020

14   Last day to furnish fourth quarter 2019 benefit statement to a participant or beneficiary in an individual account plan that permits participant investment direction

28   Last day to file Form 1096 and Form 1099-R on paper with the IRS

March 2020

15   Last day to refund excess contributions (ADP test) and refund or forfeit (if forfeitable) excess aggregate contributions (ACP test) for 2019 to avoid 10% excise tax (unless plan is an EACA)

31   Last day to file Form 1099-R electronically with the IRS

31   Last day (unextended deadline) to file Form 5330 and pay excise tax on 2018 plan year excess contributions or excess aggregate contributions where excess amounts not distributed (or forfeited, if forfeitable) by Mar. 15, 2019 (or by June 30, 2019 in case of an EACA)

April 2020

01   Last day to make required minimum distributions (for first distribution calendar year) to applicable plan participants

15   Last day to distribute excess deferrals in excess of 402(g) dollar limits for 2019 to applicable participants

15  Last day for C corporation employer plan sponsors to make contributions and take tax deductions for 2019 without corporate tax return extension

May 2020

15   Last day to furnish first quarter 2020 benefit statement to a participant or beneficiary in an individual account plan that permits participant investment direction

June 2020

30   Last day to refund excess contributions (ADP test) and refund or forfeit (if forfeitable) excess aggregate contributions (ACP test) for 2019 to avoid 10% excise tax – in case of an EACA

July 2020

29   Last day to furnish Summary of Material Modifications (SMM) to participants and beneficiaries receiving benefits

31   Last day to file Form 5500 for 2019 without extension

31   Last day to file Form 8955-SSA without extension

31   Last day to provide a notice to terminated vested participants describing deferred vested retirement benefits (in conjunction with Form 8955-SSA)

31   (or the day Form 5500 is filed, if earlier) – Last day (without 5500 extension) to furnish annual benefit statement to a participant or beneficiary in an individual account plan that does not provide for participant investment direction

31   Last day (unextended deadline) to file Form 5330 and pay excise tax on nondeductible contributions, prohibited transactions, certain employee stock ownership plan dispositions, and certain prohibited allocations of qualified securities by an ESOP (if applicable)

August 2020

14   Last day to furnish second quarter 2020 benefit statement to a participant or beneficiary in an individual account plan that permits participant investment direction

30   Last day to furnish annual participant fee disclosures in a participant-directed individual account plan (or up to 14 months from last disclosure notice, if later)

September 2020

15   Last day to pay balance of remaining required contributions for 2019 plan year to satisfy minimum funding requirements for plans subject to minimum funding requirements (such as money purchase pension plans)

30   Last day to furnish Summary Annual Report for 2019 plan year to participants and beneficiaries if an extension to file Form 5500 was not obtained

October 2020

15   Last day to file Form 5500 (with extension)

15   Last day to file Form 8955-SSA (with extension)

15   Last day to provide a notice to terminated vested participants describing deferred vested retirement benefits (in conjunction with Form 8955-SSA)

15   (or the day Form 5500 is filed, if earlier) – Last day (with 5500 extension) to furnish annual benefit statement to a participant or beneficiary in an individual account plan that does not provide for participant investment direction

15   Last day to adopt and implement retroactive corrective plan amendment to correct 2019 410(b) coverage or 401(a)(4) nondiscrimination failures

15   Last day for C corporation employer plan sponsors to make contributions and take a tax deduction for 2019 if 6-month automatic extension to file federal income tax return was obtained

November 2020

14   Last day to furnish third quarter 2019 benefit statement to a participant or beneficiary in an individual account plan that permits participant investment direction

December 2020

01   Last day to provide a notice of intent to use safe harbor contribution formula for 2020 plan year to eligible employees

01   Last day to provide an automatic contribution arrangement notice for 2020 plan year to all eligible employees

01   Last day to furnish a qualified default investment alternative (QDIA) notice for 2020 plan year to participants and beneficiaries on whose behalf an investment in a QDIA may be made

15   Last day (with 5500 extension) to furnish Summary Annual Report for 2019 plan year

31   Last day to refund excess contribution (ADP test) and refund or forfeit (if forfeitable) excess aggregate contributions (ACP test) for the 2019 plan year

31   Last day to make required minimum distributions to applicable participants for distribution calendar years other than for the first distribution calendar year

31   Last day for plan sponsors to adopt discretionary plan amendments that would be effective for the current plan year

*This calendar is designed to provide a general overview of certain key compliance dates and is not meant to indicate all possible compliance dates that may affect your plan.

Copyright © 2020 by Findley, Inc. All rights reserved.

If you would like more specific information about each compliance item, you may review or print the calendar below.

Print 2020 Detailed Defined Contribution Plan Compliance Calendar

Interested in other compliance calendars?

Defined Benefit

Health & Welfare

Pension Strategy Driver – 2020 PBGC Premium Rates Announced

For many sponsors of single-employer pension plans, the minimum cash funding requirement is no longer the most important number discussed with their actuaries every year. Instead, pension plan sponsors have shifted their focus to managing their PBGC premiums.

PBGC Premium Rates Chart 2007-2020. Flat-Rate vs. Variable-Rate

PBGC Premiums Defined

The PBGC premium is essentially a tax paid to a government agency to cover required insurance for the plan and the participant benefits in the event that the plan sponsor goes bankrupt. The annual premium is calculated in two parts – the flat-rate premium and the variable-rate premium – and is subject to a premium cap.

The flat-rate premium is calculated as a rate per person.

The PBGC variable-rate premium is an amount that each plan sponsor pays based on the underfunded status of its plan.

The variable-rate premium cap is a maximum amount that a plan sponsor of a significantly underfunded plan has to pay. It is calculated based on the number of participants in the plan. There are other caps that apply for small plans.

2020 Premiums Announced

For 2020, the flat-rate premium amount is $83 per person. This is 168% higher than the rate of $31 per person at the beginning of this decade.

For 2020, the variable-rate premium has jumped to $45 per $1,000 of the underfunded amount. Up until 2013, that rate was $9 per $1,000. That amounts to a 400% increase in just seven years.

The cap for 2020 is $561 per person; which means for a 10,000-life plan, the maximum PBGC variable premium is $5,610,000.

Therefore, the PBGC premium for a 10,000-life plan at the premium cap would total $6,440,000.

More information about various strategies to manage PBGC premiums can be found here: Managing PBGC Premiums: There is More Than One Lever.

More information regarding PBGC’s Current and Historical Premium Rates can be found on the PBGC’s website link above.

Questions? Contact the Findley consultant you normally work with, or contact Colleen Lowmiller at colleen.lowmiller@findley.com, 216.875.1913.

Published October 29, 2019

© 2019 Findley. All Rights Reserved.

Minimum Participation Rule Puts Pension Benefits at Risk

Almost all pension plans are subject to certain compliance tests that are outlined by the IRS. The compliance requirements are in place to make sure that if a plan sponsor’s contributions to a pension plan are deductible for tax purposes, then the pension plan’s benefits must not be designed too heavily in favor of the highest paid employees. One set of compliance rules for most pension plans are the minimum participation requirements. As some defined benefit pension plans continue operating, these rules are causing compliance concerns.

Minimum Participation Rule Details

Under Internal Revenue Code (IRC) Section 401(a)(26), a defined benefit pension plan must benefit a minimum of

  • 50 employees or
  • 40% of the employees of the employer.

If the pension plan is not benefiting any highly compensated employees (HCEs), it automatically satisfies the rule.

HCE is generally determined as an individual earning more than a specified dollar threshold established by the IRS for the prior year. This dollar limit is $125,000 based on 2019 earnings to determine HCEs for the 2020 year. All others are considered non-highly compensated employees (NHCEs).

Unintended Consequences

Today, many pension plans have been “partially frozen” for years, which means they have benefits accruing only for a specified group of employees. As time passes and ordinary turnover and retirement occur, the number of employees that accrue benefits in these defined benefit pension plans is decreasing.

Although the original purpose was to provide “meaningful” benefits to employees across the plan sponsor’s organization, these requirements are now causing accruals to be shut off as some plans approach and fall below the minimum threshold of employees accruing benefits.

For the affected employees, it comes at a time close to retirement age when their promised pensions, by design, would be accumulating at the highest rates, and defined contribution style benefits, like 401k plans, can’t realistically replace all lost future accruals.

Potential Strategies

Do Nothing and Wait

  • We can hope that legislative relief will be passed to eliminate the participation issues. However, Congress has considered addressing these issues over the last 5 to 7 years, and no movement towards enacting relief rules has been seen yet.

Merge Pension Plans

  • This provides immediate relief to minimum participation issues.
  • It could be a temporary solution if the benefits are also partially frozen across the combined defined benefit pension plan. Review the demographics to project how long this solution will last when weighing the advantages of this strategy for your situation.

Open the Pension Plan

  • Reopen the pension plan to additional participants. (Yes, this could make sense!)
  • More employees will be benefiting and eliminate minimum participation rule issues.
  • New plan participants can receive a different formula (something similar to the current plan formula but reduced, cash balance formula, variable annuity formula, etc.)
  • Consider if recruiting or employee retention issues can be reduced or alleviated by designing new pension benefits for targeted employee groups.
  • This can be designed to help bridge the time until the potentially affected employees reach retirement age.
  • Watch the mix of HCEs and NHCEs because the additional pension benefit design still needs to satisfy other IRS coverage, nondiscrimination, and design-based compliance rules.

Freeze Remaining Pension Benefits

  • The freeze can be for all participants or only for current and future HCEs.
  • Replacement benefits can be provided to address employee retention and retirement readiness issues.
    • Provide projected lost benefits as cash payment(s).
    • Executive employees can have some or all lost benefits replaced in a nonqualified deferred compensation plan or other executive compensation arrangement.
    • Design partial replacement benefits in a 401k plan.
  • Consider the impact of the pension plan freeze on other sponsored benefit plans. For example, are there benefits that are automatically available, or not available, based upon whether an employee is accruing benefits in the pension plan?
  • Curtailment accounting rules are triggered which may require an additional one-time expense to be recognized through income in the year of the benefit freeze.

In Perspective

There are many valid business reasons that explain why a plan sponsor would want to stop pension accruals for everyone except a specified group. We know the IRS rules were not intended to cause the loss of benefits for employees late in their careers. Regardless, several pension plan sponsors are at the point where their partially frozen pension plans are close to becoming noncompliant. While we continue to wait for legislative relief for this issue (that may never come), if you sponsor a partially frozen pension plan, you should determine when this will become an issue for you. Begin discussing possible strategies, and have an approach in place well ahead of time to minimize the disruption to your organization as much as possible.

Questions? Contact the Findley consultant you normally work with, or contact Colleen Lowmiller at colleen.lowmiller@findley.com, 216.875.1913.

Published October 28, 2019

© 2019 Findley. All Rights Reserved.

2019 Health and Welfare Plans Compliance Calendar/Checklist

Significant Due Dates – Calendar Plan Year & Calendar Employer Tax Year*

2019 Health and Group Benefits Compliance Calendar

January 2019

31   Last day to report on Form W-2 to employees the cost of applicable employer sponsored coverage under a group health plan

February 2019

28   Paper Filing – Last day for applicable large employer member to file one or more Forms 1094-C and to file Form 1095-C for each employee who was a full time employee for any month of the calendar year 2018

28   Paper Filing – Last day for person that provides minimum essential health coverage to an individual during calendar year 2018 to file an information return with the IRS reporting the coverage. Filers will use Form 1094-B, Transmittal of Health Coverage Information Returns, to submit Forms 1095-B, Health Coverage, to IRS.

28   Notice of Breach of Unsecured Protected Health Information – breaches affecting fewer than 500 individuals. Last day for covered entities to notify HHS of a breach affecting fewer than 500 individuals. (Covered entities must notify affected individuals of such a breach without unreasonable delay and in no case later than 60 days following the discovery of a breach.)

March 2019

01   Medicare Part D Creditable Coverage Disclosure to CMS – Last day for employers offering prescription drug coverage to Medicare Part D eligible individuals to disclose to CMS whether coverage is creditable prescription drug coverage by submitting a completed online Creditable Coverage Disclosure to CMS Form

01   Last day to file electronically with DOL Form M-1 annual report for MEWAs (and certain entities claiming exception) for 2018 (without extension)

04   Last day for filers of IRS For 1095-B, Health Coverage, to furnish a copy of Form 1095-B to the person identified as the “responsible individual” on the form for coverage in 2018

04   Last day for an applicable large employer member to furnish a Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, to each of its full-time employees

31   Electronic Filing – Last day for an applicable large employer member to file one or more Forms 1094-C and to file a Form 1095-C for each employee who was a full time employee for any month of the calendar year 2018. [IRS 2018 Instructions for Forms 1094-C and 1095-C provide that, while generally the Forms must be filed by March 31 when filing electronically, for calendar year 2018 the Forms are required to be filed by April 1, 2019 when filing electronically.]

31  Electronic Filing – Last day for person that provides minimum essential coverage to an individual during calendar-year 2018 to file an information return with the IRS reporting the coverage. Filers will use Form 1094-B, Transmittal of Health Insurance Offer and Coverage Information Returns, to submit Forms 1095-B, Health Coverage, to IRS. [The IRS 2018 Instructions for Forms 1094-B and 1095-B provide that, while generally the Forms must be filed by March 31 (when filing electronically) of the year following the calendar year of coverage, for Forms filed in 2019 reporting coverage provided in calendar year 2018 the Forms are required to be filed by April 1, 2019 when filing electronically.]

May 2019

15   Last day (unextended deadline) to file Form 990 series for a 2018 VEBA. An automatic filing extension of 6 months may be requested by filing Form 8868 by the due date of the Form 990

July 2019

29   Last day to furnish Summary of Material Modifications (SMM) to participants and beneficiaries receiving benefits

31   Last day to file Form 5500 for 2018 without extension

31   Last day (unextended deadline) to file Form 5330 and pay excise tax on disqualified benefits under funded welfare plans

31   Last day (unextended deadline) to file Form 5330 and pay excise tax on certain excess fringe benefits

31   Last day for plan sponsor of a self-insured plan to file Form 720 and pay the PCORI fee for 2018 plan year

September 2019

30   Last day to furnish Summary Annual Report (SAR) for 2018 plan year to participants and beneficiaries if an extension to file Form 5500 was not obtained

October 2019

14   Prior to Oct. 15, 2019 – Medicare Part D Creditable Coverage Notice – Employers offering prescription drug coverage to Medicare Part D eligible individuals must notify those individuals whether the offered prescription drug coverage is creditable coverage. Notice must be provided prior to Oct. 15, 2019.

15   Last day to file Form 5500 with extension

December 2019

15   Last day (with extension) to furnish Summary Annual Report (SAR) for 2018 plan year to participants and beneficiaries

*This calendar is designed to provide a general overview of certain key compliance dates and is not meant to indicate all possible compliance dates that may affect your plan.

Copyright © 2019 by Findley, Inc. All rights reserved.

To access other selected requirements with no specific deadline plus a detailed description of each compliance item, click below.

View 2019 Detailed Health and Welfare Plan Compliance Calendar/Checklist and other selected requirements with no specific deadline

Interested in other compliance calendars?

Defined Benefit

Defined Contribution

2019 Defined Contribution Plan Compliance Calendar

Calendar Plan Year & Calendar Employer Tax Year*

January - June 2019 Defined Contribution Plan Calendar Image

January 2019

31   Last day to file Form 945 to report withheld federal income tax from distributions

31   Last day to furnish Form 1099-R to recipients of distributions in 2018

February 2019

14   Last day to furnish fourth quarter 2018 benefit statement to a participant or beneficiary in an individual account plan that permits participant investment direction

28   Last day to file Form 1096 and Form 1099-R on paper with the IRS

March 2019

15   Last day to refund excess contributions (ADP test) and refund or forfeit (if forfeitable) excess aggregate contributions (ACP test) for 2018 to avoid 10% excise tax (unless plan is an EACA)

April 2019

01   Last day to make required minimum distributions (for first distribution calendar year) to applicable plan participants

01   Last day to file Form 1099-R electronically with the IRS

01   Last day (unextended deadline) to file Form 5330 and pay excise tax on 2017 plan year excess contributions or excess aggregate contributions where excess amounts not distributed (or forfeited, if forfeitable) by Mar. 15, 2018 (or by June 30, 2018 in case of an EACA)

15   Last day to distribute excess deferrals in excess of 402(g) dollar limits for 2018 to applicable participants

15  Last day for C corporation employer plan sponsors to make contributions and take tax deductions for 2018 without corporate tax return extension

May 2019

15   Last day to furnish first quarter 2019 benefit statement to a participant or beneficiary in an individual account plan that permits participant investment direction

June 2019

30   Last day to refund excess contributions (ADP test) and refund or forfeit (if forfeitable) excess aggregate contributions (ACP test) for 2018 to avoid 10% excise tax – in case of an EACA

July to December 2019 Compliance Calendar

July 2019

29   Last day to furnish Summary of Material Modifications (SMM) to participants and beneficiaries receiving benefits

31   Last day to file Form 5500 for 2018 without extension

31   Last day to file Form 8955-SSA without extension

31   Last day to provide a notice to terminated vested participants describing deferred vested retirement benefits (in conjunction with Form 8955-SSA)

31   (or the day Form 5500 is filed, if earlier) – Last day (without 5500 extension) to furnish annual benefit statement to a participant or beneficiary in an individual account plan that does not provide for participant investment direction

31   Last day (unextended deadline) to file Form 5330 and pay excise tax on nondeductible contributions, prohibited transactions, certain employee stock ownership plan dispositions, and certain prohibited allocations of qualified securities by an ESOP (if applicable)

August 2019

14   Last day to furnish second quarter 2019 benefit statement to a participant or beneficiary in an individual account plan that permits participant investment direction

30   Last day to furnish annual participant fee disclosures in a participant-directed individual account plan (or up to 14 months from last disclosure notice, if later)

September 2019

15   Last day to pay balance of remaining required contributions for 2018 plan year to satisfy minimum funding requirements for plans subject to minimum funding requirements (such as money purchase pension plans)

30   Last day to furnish Summary Annual Report for 2018 plan year to participants and beneficiaries if an extension to file Form 5500 was not obtained

October 2019

15   Last day to file Form 5500 (with extension)

15   Last day to file Form 8955-SSA (with extension)

15   Last day to provide a notice to terminated vested participants describing deferred vested retirement benefits (in conjunction with Form 8955-SSA)

15   (or the day Form 5500 is filed, if earlier) – Last day (with 5500 extension) to furnish annual benefit statement to a participant or beneficiary in an individual account plan that does not provide for participant investment direction

15   Last day to adopt and implement retroactive corrective plan amendment to correct 2018 410(b) coverage or 401(a)(4) nondiscrimination failures

15   Last day for C corporation employer plan sponsors to make contributions and take a tax deduction for 2018 if 6-month automatic extension to file federal income tax return was obtained

November 2019

14   Last day to furnish third quarter 2019 benefit statement to a participant or beneficiary in an individual account plan that permits participant investment direction

December 2019

01   Last day to provide a notice of intent to use safe harbor contribution formula for 2020 plan year to eligible employees

01   Last day to provide an automatic contribution arrangement notice for 2020 plan year to all eligible employees

01   Last day to furnish a qualified default investment alternative (QDIA) notice for 2020 plan year to participants and beneficiaries on whose behalf an investment in a QDIA may be made

15   Last day (with 5500 extension) to furnish Summary Annual Report for 2018 plan year

31   Last day to refund excess contribution (ADP test) and refund or forfeit (if forfeitable) excess aggregate contributions (ACP test) for the 2018 plan year

31   Last day to make required minimum distributions to applicable participants for distribution calendar years other than for the first distribution calendar year

31   Last day for plan sponsors to adopt discretionary plan amendments that would be effective for the current plan year

*This calendar is designed to provide a general overview of certain key compliance dates and is not meant to indicate all possible compliance dates that may affect your plan.

Copyright © 2019 by Findley, Inc. All rights reserved.

If you would like more specific information about each compliance item, you may review or print the calendar below.

Print 2019 Detailed Defined Contribution Plan Compliance Calendar

Interested in other compliance calendars?

Defined Benefit

Health & Welfare

2019 Pension Plan Compliance Calendar

Calendar Plan Year & Calendar Employer Tax Year*

January 2019  
15 Due date to make fourth required quarterly contribution for 2018 plan year
31 Last day to file Form 945 to report withheld federal income tax from distributions
31 Last day to furnish Form 1099-R to recipients of distributions during 2018 calendar year

February 2019
28 Last day to file Form 1096 and Form 1099-R on paper with the IRS

March 2019
31 Deadline for enrolled actuary to issue AFTAP certification for current year to avoid presumption for benefit restrictions (if applicable)

April 2019
01 Presumed AFTAP takes effect unless and until enrolled actuary issues certification of AFTAP for current plan year (if applicable).
01 Last day to pay initial required minimum distributions to applicable plan participants
01 Last day to file Form 1099-R electronically with the IRS
15 Due date to make first required quarterly contribution for 2019 plan year
15 Last day to file financial and actuarial information under ERISA section 4010 with PBGC (if applicable)
15 Last day for C corporation employer plan sponsors to make contributions and take tax deduction for 2018 without corporate tax return extension
30 Last day to furnish Annual Funding Notice (for plans covered by PBGC that have more than 100 participants)

May 2019
01 Last day to provide notice of benefit restrictions, if restrictions are applicable as of April 1, 2019

July 2019
15 Due date to make second required quarterly contribution for 2019 plan year
29 Last day to furnish Summary of Material Modifications (SMM) to participants and beneficiaries receiving benefits
31 Last day to file Form 5500 for 2018 without extension.
31 Last day to file Form 8955-SSA without extension
31 Last day to provide a notice to terminated vested participants describing deferred vested retirement benefits (in conjunction with Form 8955-SSA)
31 (or the day Form 5500 is filed, if earlier) – Last day to furnish Annual Funding Notice (for PBGC covered plans with 100 or fewer participants without extension)
31 Last day (unextended deadline) to file Form 5330 and pay excise tax on nondeductible contributions and prohibited transactions (if applicable)

September 2019
15 Last day to pay balance of remaining required contributions for 2018 plan year to satisfy minimum funding requirements.
30 Last day to furnish Summary Annual Report to participants and beneficiaries (for non-PBGC covered plans)
30 Last day for enrolled actuary to issue AFTAP certification for current plan year

October 2019
01 If enrolled actuary does not issue AFTAP certification for plan year, then AFTAP for plan year presumed to be less than 60 percent and plan will be subject to applicable benefit restrictions.
15 Last day to file Form 5500 (with extension)
15 Last date to file Form 8955-SSA (with extension)
15 Last day to provide a notice to terminated vested participants describing deferred vested retirement benefits (in conjunction with Form 8955-SSA)
15 Due date to make third required quarterly contribution for 2019 plan year
15 Last day to file PBGC comprehensive PBGC premium filing and pay premiums due (for plans covered by PBGC)
31 Last day to provide notice of benefit restrictions, if restrictions are applicable as of October 1, 2019

December 2019
15 Last day (with extension) to furnish Summary Annual Report (for non-PBGC covered plans)
31 Last day for enrolled actuary to issue a certification of the specific AFTAP for current year if a range certification was previously issued
31 Last day for plan sponsors to adopt discretionary plan amendments that would be effective for the current plan year

*This calendar is designed to provide a general overview of certain key compliance dates and is not meant to indicate all possible compliance dates that may affect your plan.

© 2019 Findley • All rights reserved

If you would like more specific information about each compliance item, you may review or print the calendar below.

Print 2019 Detailed Pension Plan Compliance Calendar

Interested in other compliance calendars?

Defined Contribution

Health & Welfare

Scared vs. Prepared: Conducting an Operational Compliance Review

Well, it arrived.  On your desk is a white envelope with a return address to the Federal Government. Are you prepared for this day?  Are your procedures up-to-date? 

Fortune Favors the Prepared

No one likes finding out that they are being audited by the Internal Revenue Service (IRS) or Department of Labor (DOL). But the fact of the matter is that all qualified retirement plans (defined benefit and defined contribution) may be audited. Prudent plan sponsors are proactive, have up-to-date procedures and guidelines, and periodically conduct an operational compliance review, or self-audit. Taking the initiative to do a self-review can help you avoid added costs and liabilities down the road.

Plan sponsors have a fiduciary responsibility to ensure their plans are operating according to the law and governing plan documents. This includes everything from documentation, to benefit calculations, to the day-to-day administrative processes. No matter what type of retirement plan you have, or whether it is administered in-house or outsourced to a professional recordkeeper, you should consider conducting an operational compliance review every few years.

Bonus: It’s also the perfect time for plan sponsors to locate and organize all plan documents, Summary Plan Descriptions, administrative manuals, third-party service agreements, and meeting minutes.

A particularly good time to conduct a review is when a merger or acquisition takes place. If you are considering merging one plan into another, it is beneficial to correct errors in each plan before merging. Once the plans are merged, it is harder to isolate when and where the problem started and to calculate any corrections needed.

Start to finish, a self-audit can last from six weeks to six months depending on the size of the plan, depth of review, and findings. The review may be broad, focusing primarily on plan documents, annual filings, and compliance testing. It may be very detailed, structured to encompass everything from internal payroll processes down to spot checking select records or transactions from the recordkeeping system.

How Do We Make Sure We’re Prepared?

When considering an operational compliance plan review, it’s tempting to think, “Nothing has changed with our plan, so we’re good.” However, just because your plan hasn’t changed in your eyes doesn’t mean you shouldn’t review. New tax laws, legislative updates, and organizational restructure all affect retirement plans. Use these eight questions to help you pinpoint areas that may need to be addressed in your review:

  • How long ago was the last internal review completed?
  • Are there any recent laws or regulation changes affecting your plan, your company, and your employees?
  • Does your plan document reflect the way the plan is currently being administered?
  • When was the last time your benefits and payroll teams reviewed the wage types to confirm that they align with the plan document?
  • Is there a committee that meets to discuss and make decisions regarding the retirement plan?
  • Are the retirement plan committee decisions documented in meeting minutes?
  • Have there been tax laws or internal company changes which may impact the plan’s operation?
  • Has your company made any acquisitions or changes in payroll systems?

Where Is the Most Exposure?

The DOL and IRS periodically publish lists of the most common compliance issues they find when reviewing retirement plans. The most common issues include:

  • Definition of compensation
  • Updates to the plan documents for tax law changes
  • Employee eligibility
  • Loans
  • In-service distributions
  • Minimum required distributions
  • Nondiscrimination testing
  • Vesting
  • Timing of payroll deposits
  • IRC 410(b) coverage testing
  • Qualified domestic relations orders
  • Target date funds
  • Revenue Sharing and 12b-1 fees
  • Plan committee meetings
  • Blackout participant notices

This list is not exhaustive; however, it is a good reference and cheat sheet for areas of focus for your plan review. Most recently, the DOL has been focused on the diligence of plan sponsors in locating missing participants.

In Perspective

The day that letter arrives doesn’t have to be scary.  Performing an operational compliance plan review every few years can keep your plan up-to-date and compliant. Questions? If you would like to learn more about conducting an operational compliance review of your plan, please contact the Findley consultant you normally work with, or contact Amy Kennedy at amy.kennedy@findley.com, 419.327.4102, or Beth Mattimoe at beth.mattimoe@findley.com , 419.327-4416.

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Posted March 6, 2019