Just when you’ve got the rules down, they pull the rug out from under you! In recent weeks the feds have made two surprise policy reversals. And if you don’t keep up, you’ll get caught short.
Specifically, you have about-faces when it comes to:
- Pay data reporting, and
- Defined benefit pension plans.
Here’s the scoop on each and what you need to do to stay in compliance.
About-face #1: EEO-1 reporting requirements
We hope you’ve been collecting employee pay data all this time. Because the feds want it after all … and soon!
In a surprise move, a federal appeals court reinstated the employee pay data collection requirements of the Employer Information Report EEO-1. Back in 2017, it imposed an “indefinite stay” on the expanded requirements.
And of course they did it with just a few months before those reports are due.
Remember, if you have 100 or more employees, you’re required to report pay data. But thanks to a revision during the Obama administration, what you must collect was expanded.
But now you also need to capture employee W-2 wages and hours worked and break it down by:
- employee job category
- race/ethnicity, and
- gender.
There’s no time to lose: The 2018 EEO-1 survey opened on March 18 and is due May 31.
About-face #2: Lump-sum payouts for pension plans
On the benefits front, it looks like your company will be able to offer retirees who already receive pension payments a limited time window to trade benefits for a lump-sum cash payment.
That’s the upshot of IRS Notice 2019-18.
The Taxman says it no longer plans to amend the required minimum distribution (RMD) regulations for folks already collecting pension benefits as it had asserted in Notice 2015-49. (The payments were always to remain allowable for those participants who’d yet to collect their benefits, like people who’d left your company but hadn’t reached retirement age.)
So now that IRS won’t ding you for it, your company can decide whether it wants to offer this option to retirees.
And while this does give you some clarity for the time being, don’t expect this to be the last you hear about this from the feds. IRS says it “will continue to study the issue of retiree lump-sum windows” to make sure practices stay in line with the Internal Revenue Code.
CFO Daily News will of course alert you if IRS rules any further on the matter.
