Legislative updates

Department of Labor (DOL) guidance titled “Adoption of Amended and Restated Voluntary Fiduciary Correction Program” has left the Office of Management and Budget.

The Pension Benefit Guaranty Corporation (PBGC) has released a final rule updating the table for determining expected retirement ages for participants in pension plans undergoing distress or involuntary termination to reflect valuation dates falling in 2025.

Senate Finance Committee Chair Ron Wyden (D-OR) has released draft legislation titled Protecting Proper Life Insurance from Abuse Act. According to a press release, the proposal follows an 18-month committee investigation and release of a report in February.

The Internal Revenue Service recently released Treasury Decision (TD) 10008, which provides guidance on income tax withholding requirements for certain periodic payments and nonperiodic distributions from deferred compensation plans, individual retirement arrangements (IRAs), and commercial annuities.

Representative Cathy Rodgers (R-WA), has introduced the ABLE Tomorrow Act. According to a press release, the proposal would do the following.

• Make the ABLE to Work Act and ABLE Financial Planning Act permanent
• Eliminate the Medicaid clawback in the original ABLE Act
• Allow for a one-time lump sum into an ABLE account beyond the $18,000 per gift tax contribution limit for certain instances
• Allow an employer to make contributions to an ABLE eligible worker’s 529A account in lieu of contributions to the employer’s defined contribution plan

The Internal Revenue Service (IRS) recently issued Notice 2024-77, providing interim guidance on the treatment of “inadvertent benefit overpayments” from defined benefit and defined contribution plans as provided by Section 301 of the SECURE 2.0 Act of 2022 (SECURE 2.0). This interim guidance specifically refers to the application of the plan qualification and rollover distribution rules provided by Internal Revenue Code Sections (IRC Secs.) 414(aa) and 402(c)(12) to the correction methods available for inadvertent benefit overpayments under the Employee Plans Compliance Resolution System (EPCRS) as outlined in Revenue Procedure (Rev. Proc.) 2021-30.

The IRS has posted final regulations regarding income tax withholding on certain periodic payments and nonperiodic distributions from employer deferred compensation plans, individual retirement plans, and commercial annuities that are not eligible rollover distributions.

Representative Mark DeSaulnier (D-CA) has introduced HR 9820 – the Employee and Retiree Access to Justice Act.

The Social Security Administration has issued the 2025 adjustments for benefits and certain other limitations that are subject to annual cost-of-living adjustment (COLA) indices.

Representative Brittany Pettersen (D-Co), and co-sponsor Maria Salazar (R-FL), have introduced H.R. 9764, the Catching Up Family Caregivers Act. According to a press release, the bill would allow family caregivers to make catch-up contributions to employer-sponsored retirement plans, an option typically reserved for those over age 50. For every year they are out of the workforce, caregivers could be eligible for an additional year of catch-up contributions, up to a maximum of five years.