Retirement Plans Affected by Wildfires Get Timing Relief for Certain Procedures

The Department of Labor’s Employee Benefits Security Administration (EBSA) has released a fact sheet containing guidance and relief for those impacted by the 2018 California wildfires. This followed the release of FAQ a couple days earlier.

The fact sheet focuses on verification procedures for plan loans and distributions, the deposit timing of participant contributions and loan repayments, blackout notices, ERISA claims compliance, and Form 5500, Annual Return/Report of Employee Benefit Plan, filing relief in light of the recent wildfires.

The fact sheet provides the following guidance for employers who were located in a county or tribal area identified now or in the future for individual assistance by the Federal Emergency Management Agency (FEMA) because of the 2018 California Wildfires.

  • The EBSA will not treat a distribution or loan provided because of the wildfires as a failure if procedural requirements for plan loans or distributions are not followed due to the wildfires (provided the wildfires are the cause, and the plan administrator makes a good-faith effort to comply with the requirements and makes an attempt to gather any missing documentation as soon as practicable).
  • It will not take enforcement action with respect to a temporary delay in forwarding participant contributions and loan repayments to a plan (employers and service providers must act reasonably to comply with existing rules as soon as practicable).
  • It will not require a fiduciary determination regarding blackout notice timing, as natural disasters are “beyond the reasonable control of the plan administrator” (an exception to the blackout notice timing).
  • It will not take enforcement action with respect to ERISA claims processing that is delayed (provided employers act reasonably, prudently, and in the best interest of participants and beneficiaries).

Form 5500 filing relief is detailed in the IRS news releases listed on the IRS disaster relief website. Impacted employers, advisors, and employees are encouraged to visit the EBSA’s disaster relief website, or to contact the DOL or IRS directly.