On June 19, 2020, the Internal Revenue Service (IRS) updated and clarified issues of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) guidance for plan sponsors and plan participants. Issued as Notice 2020-50 (“Guidance for Coronavirus-Related Distributions and Loans from Retirement Plans Under the CARES Act,”) the publication explains the new provisions which allow enhanced access to plan loans and plan distributions.
Since the coronavirus pandemic first began to reinvent life in the U.S., we’ve shared numerous updates directed to the topic of IRC Section 409A v. COVID-19.
Today, courtesy of our friends at Porter Wright, the Deferred Compensation blog addresses questions that employers first raised in March, regarding ways to get money out of their nonqualified plans to participants who may have suffered pay cuts or furloughs. This post also addresses questions regarding equity-based and incentive compensation. As you will see, good intentions could lead to serious consequences under Internal Revenue Code Section 409A.
If your business obtained a PPP loan, whether you plan to repay the loan or to seek PPP loan forgiveness, you need to be fully aware of the revised terms and conditions established under the Paycheck Protection Program (PPP) Flexibility Act of 2020 (PPPFA). The PPP Flexibility Act (HR 7010) was signed into effect by President Donald Trump on June 5, 2020. This action changes and replaces the terms of PPP Act loans and adds flexibility that will be valued by many borrowers.
Earlier this month we shared Electronic Disclosure Safe Harbor for Retirement Plans, providing an overview of the Department of Labor’s final regulations permitting electronic disclosure via email and website publication as the default method for sending employee retirement plan notices.
Previously, we’ve shared updates to help companies and their key executives with regard to executive comp limits for organizations that receive certain types of COVID-19 loans, loan forgiveness, or stimulus aid. See: CESA Act Loans: Further Information* and Insights and Executive Compensation Restrictions and the CARES Act
The Paycheck Protection Program Flexibility Act of 2020 (PPPFA) (i.e., the PPP loan extension) has been signed into law. After receiving U.S. Senate approval on June 3, 2020, the amendment to the Small Business Act and the CARES Act was finalized on June 5, with the signature of President Donald Trump. Updating the Paycheck Protection Program of the Small Business Administration, the PPPFA adds much needed flexibility to the timing and forgiveness options than was allowed by the original PPP Act.
Mandated ESG Disclosure (Environmental, Social, Governance*) by publicly held companies moves closer to reality. The Investor-as-Owner Subcommittee of the U.S. Securities and Exchange Commission’s Investor Advisory Committee’s has voted 14-4 to approve a recommendation that urges the SEC to update the reporting requirements for public companies to include material, decision-useful environmental, social, and governance (ESG) factors. The form the mandate …
The atypical circumstances of recent months have created new situations most organizations have not previously faced. Every employer needs a clear understanding of which workforce reduction circumstances could constitute a “separation of service” and thereby trigger payment of benefits for plan participants covered by a nonqualified deferred compensation agreement (NQDC).
Last week, the Department of Labor (DOL) finalized regulations for the new “notice and access” safe harbor for retirement plans. Known as “NOA Safe Harbor,” the new guidelines permit plan administrators to send required disclosures to plan participants and beneficiaries via email or other electronic means, including allowing employers to post retirement plan disclosures online.
COVID-19 has painted a crystal-clear picture of the critical value of human capital. And with this heightened awareness comes an accelerated pace for new human capital governance. But even before the global pandemic abruptly redefined just about everything, Attorney Mike Melbinger, a partner in the Chicago offices of Winston & Strawn, and others were already taking note of the developing sentiment that matters of human capital management should rest squarely on the shoulders of Compensation Committees.