In addition to annual funding for the federal government and provisions on economic stimulus necessitated by the COVID-19 pandemic, the Consolidated Appropriations Act, 2021 (the Act), enacted on December 27, includes temporary relief from the minimum vesting standards tax rules for employer-sponsored retirement plans- both defined contribution and defined benefit pension plans. Division EE, Section 209 of the Act, "Temporary Rule Preventing Partial Plan Termination," provides a window of relief from the occurrence (and subsequent formal recognition and mandatory actions) of a partial plan termination for any plan if the number of active participants covered by the plan on March 31, 2021, is at least 80% of the number of active participants covered by the plan on March 13, 2020.
Insight
The Inflation Reduction Act will have countless implications for all industry stakeholders and will alter the Medicare landscape in 2023 and beyond.
Benefits alert: “Partial Plan Termination” relief for qualified 401(k), 401(a) defined contribution plans and defined benefit pension plans in the Consolidated Appropriations Act, 2021
In addition to annual funding for the federal government and provisions on economic stimulus necessitated by the COVID-19 pandemic, the Consolidated Appropriations Act, 2021, enacted on December 27, includes temporary relief from the minimum vesting standards tax rules for employer-sponsored retirement plans- both defined contribution and defined benefit pension plans.