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5500 Preparer's Manual for 2012 Plan Years

5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.


HEART Act guidance coming, says key IRS official

The IRS is preparing guidance on the pension and benefit provisions in the Heroes Earnings Assistance Relief Tax (HEART) Act of 2008 (P.L. 110-245), according to Martin L. Pippins, manager, IRS Employee Plans Technical Guidance and Quality Assurance. However, Pippins, who spoke at the American Law Institute-American Bar Association (ALI-ABA) retirement benefits conference in Washington, D.C. on September 6, 2008, did not indicate when the guidance would be issued.

HEART Act expanded coverage for military reservists

The HEART Act expanded the survivor and disability payment rules to cover military reservists who are killed or disabled during service and their survivors. To be qualified under Code Sec. 401(a) , a retirement plan must now provide that the survivors of a participant who dies while performing qualified military service are entitled to any additional benefits that would have been provided under the plan had the participant returned and then terminated employment on account of death. Generally, plans must be amended to comply with these rules on or before the last day of the first plan year beginning on or after January 1, 2010. This provision of the HEART Act is mandatory for plans, Pippins noted.

Other provisions of the HEART Act are permissive, Pippins observed. These include:

The HEART Act provisions relating to Roth IRAs and Coverdell ESAs generally apply with respect to a military death gratuity or other qualifying payment received for deaths from injuries occurring on or after October 7, 2001, and before June 17, 2008, if such contribution is made not later than one year after June 17, 2008. Changes to distributions from health FSAs generally apply to distributions made after June 17, 2008.

The HEART Act’s provision treating differential wage payments as compensation for purposes of the withholding rules applies to remuneration paid after December 31, 2008. Related provisions applying to certain retirement plans generally apply to plan years beginning after December 31, 2008.

The American Benefits Council of Washington, D.C., recently submitted extensive comments on these and other provisions in the HEART Act to the Treasury Department and the IRS. “A basic question is whether employers that provide differential pay are obligated under [Code Sec.] 105(b) to provide individuals receiving differential pay with the right to make elective deferrals, receive matching contributions and have nonelective contributions made on their behalf,” the Council observed. “It would be anomalous for the law to obligate employers to provide contribution rights on differential pay since there is no general obligation to provide differential pay at all,” Jan Jacobson, senior counsel, retirement policy for Council, and author of the comments, told CCH.

Pippins indicated that the HEART Act guidance would not be comprehensive. Instead, it will apparently be targeted to the provisions of the HEART Act that are specific to employee plans.

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