The Department of Labor (DOL) has issued News Release 17-1297-NAT, providing further guidance and relief for victims of Hurricane Irma that parallels relief given in late August for victims of Hurricane Harvey. This relief generally applies to employee benefit plans, plan sponsors, service providers, employers, and employees of such employers who are located in an affected county as identified by the Federal Emergency Management Agency (FEMA). The DOL also provides FAQs directed to plan participants and beneficiaries who are affected by Hurricanes Harvey or Irma.
The previous announcement of relief for those impacted by Hurricane Harvey, which now applies to those impacted by Hurricane Irma, addresses the following.
Deposit of Deferrals and Loan Repayments
The general deadline for deferral deposits and loan repayments is as soon as can reasonably be segregated from the general assets of the employer, but no later than the 15th business day of the month following the date they are withheld or are paid to the employer. The news release states that if a delay is due solely to the effects of Hurricane Harvey, enforcement action will not be taken if employers and service providers act reasonably, prudently, and in the interest of employees to comply as soon as practical.
In general, a retirement plan must give at least a 30-day notice prior to a blackout period of more than three consecutive business days. During a blackout period, participants are unable to direct investments, obtain loans, take distributions, etc. The notice points out that regulations provide an exception to the advance notice requirement when the inability to provide the notice is because of events beyond the reasonable control of the plan administrator, and a fiduciary so determines in writing. The news release further notes that natural disasters, by definition, are beyond the control of a plan administrator, and thus, the DOL will not allege a violation solely on the basis that a fiduciary affected by this disaster failed to make the required written determination.
Verification Procedures for Plan Loans and Hardship Distributions
News Release 17-1216-NAT states that DOL is working with the IRS to provide relief with respect to verification procedures for plan loans and hardship distributions. (It is expected that good faith practices that are satisfactory to the IRS under its previously-issued Hurricane Harvey relief in Announcement 2017-11 will be satisfactory to the DOL.)
Form 5500 Filing
The DOL news release refers plans to IRS News Release TX-2017-09 for a description of the extension of time to complete certain time-sensitive tax-related acts in disaster situations, including the filing of Form 5500, Annual Return/Report of Employee Benefit Plan. Plans eligible for the extended filing deadline may do so as late as January 31, 2018.