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December Checklist of Compliance Deadlines for Retirement Plans and other Benefits

December 6, 2019

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Thank you, Isler Dare PC, for sharing this checklist, reminding employers of some of the key yearend compliance deadlines for health, welfare, and retirement plans.
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December Check List

December 15, 2019. Prepare and distribute the Summary Annual Report for each calendar year defined contribution retirement plan and health and welfare plan that filed a 2018 Form 5500 by October 15, 2019. (Note that there are limited exceptions to the Stock Appreciation Rights (SAR) rules.)

December 31, 2019. Confirm with the third-party administrators (TPAs)/recordkeepers for your retirement plans that annual Required Minimum Distributions have been paid.

December 31, 2019. If your 401(k) plan failed ADP/ACP nondiscrimination testing for 2018 and you did not process all corrective distributions by March 15, 2019, process all remaining corrective distributions and report the 10% excise tax on Form 5330.

December 31, 2019. Confirm that all necessary remedial actions to address and correct any operational errors identified during the 2019 plan year have been fully implemented, funded and memorialized with appropriate documentation.

December 31, 2019. Process corrections if your cafeteria plan, healthcare flexible spending accounts or dependent care flexible spending accounts failed nondiscrimination tests under Code Sections 125 or 129 for 2019.

December 31, 2019. For calendar year retirement plans and health and welfare plans, adopt amendments reflecting discretionary changes to the plans’ terms or design that were implemented in 2019, but have not yet been memorialized in writing, or other changes that will take effect in 2020, but that must be adopted before being implemented.

December 31, 2019. Confirm that your health plan’s out-of-pocket (“OOP”) limits for 2020 comply with the limits that are permissible under the ACA:

  • For in-network health benefits for 2020, the maximum OOP limits are $8,150 for self-only coverage and $16,300 for other coverage options. However, because the OOP limits for individuals are embedded with other coverage, the maximum 2019 Year-End Compliance Checklist
  • OOP limit for in-network essential health benefits cannot exceed $8,150 per covered household.
  • For high-deductible health plans that may be offered with a health savings account, the maximum OOP limits for 2020 are $6,900 for self-only coverage and $13,800 for family coverage. The minimum deductible levels for high-deductible health plans for 2020 are $1,400 for individual coverage and $2,800 for family coverage.

December 31, 2019. Confirm that your healthcare FSA and HAS recordkeepers, and your payroll providers have adjusted their systems to reflect changes affecting 2020 contribution limits.

  • The maximum amount that can be contributed to an HSA for a person with self-only coverage is $3,550, and for a person with family coverage is $7,100. Employees who are age 55 or older can contribute an additional $1,000 regardless of coverage tier.
  • The limit on employee contributions to a healthcare flexible spending account in 2020 is $2,750, up from $2,700 in 2019.

December 31, 2019. Confirm that the TPAs/recordkeepers for your retirement plans, and your payroll providers, have adjusted their systems to reflect the changes affecting retirement plan limits in 2020:

  • The annual elective deferral contribution limit for 401(k), 403(b) and 457(b) plans has increased to $19,500.

Other Checklist Items

Prepare and distribute an annual fee disclosure to all participants in your defined contribution retirement plan. This must be furnished to participants (and other recipients) at least every 14 months. If you are unsure of when fee disclosures were last distributed, consider sending a fee disclosure with your year-end 401(k) and 403(b) notices.

The IRS notifies employers of shared responsibility tax penalties in the form of a Letter 226J. If you receive a Letter 226J, you will have the opportunity to respond before the IRS assesses the penalty. The Letter 226J includes instructions on how to respond; however, keep in mind that the response is due within 30 days of the date of the Letter 226J, unless an extension is requested and approved.

The monthly limits for tax-exempt parking benefits and transit passes/van pool service benefits increases to $270 each in 2020. Confirm that your payroll providers have adjusted their systems to reflect these changes.

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This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. Any tax advice contained herein is of a general nature. You should seek specific advice from your tax professional before pursuing any idea contemplated herein.

Securities offered through Lion Street Financial, LLC (LSF) and Valmark Securities, Inc. (VSI), each a member of FINRA and SIPC. Investment advisory services offered through Lion Street Advisors, LLC (LSA) and Valmark Advisers, Inc. (VAI), each an SEC registered investment advisor. Please refer to your investment advisory agreement and the Form ADV disclosures provided to you for more information. VAI/VSI and LSF/LSA are non-affiliated entities and separate entities from OneDigital and Fulcrum Partners.

Unless otherwise noted, VAI/VSI, LSF/LSA are not affiliated, associated, authorized, endorsed by, or in any way officially connected with any other company, agency or government agency identified or referenced in this document.

Lion Street Advisors // Lion Street Financial

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