Whoops! You’ve Overpaid Your Retiree from your Retirement Plan. Now What?

As reported in previous newsletters, the SECURE 2.0 Act (SECURE 2.0) provisions of the Consolidated Appropriations Act, 2023 (Pub. L. No. 117-328), made numerous changes to retirement plans. Most of the changes are to the Internal Revenue Code, but there also are many important changes to the Employee Retirement Income Security Act (ERISA). Effective upon enactment (December 29, 2022), plan sponsors and plan administrators of retirement plans should review their policies and procedures for recouping plan overpayments to see what modifications are needed to comply with the new rules. They may be in your favor! 

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Related Content

• Recovering Plan Overpayments
  Learn more about the process of recovering plan overpayments for qualified retirement plans. Plan sponsors sometimes find themselves in a position to have to contact a participant or beneficiary to communicate and then arrange a reimbursement to the plan of amounts that have been overpaid to the distributee. New SECURE 2.0 rules may permit side-stepping the recoupment of inadvertent overpayments.  

Practical Guidance Updates
Featuring the latest updates from your Practical Guidance account.     

• Employee Benefits & Executive Compensation Key Legal Developments Tracker
  Stay informed on new developments.
  • Executive, Incentive, and Equity-Based Compensation. The Federal Trade Commission (FTC) has proposed a Non-Compete Clause Rule which would, among other things, provide that it is an unfair method of competition for an employer to (1) enter into or attempt to enter into a non-compete clause with a worker, (2) maintain with a worker a non-compete clause, or (3) under certain circumstances, represent to a worker that the worker is subject to a non-compete clause. 88 Fed. Reg. 3,482 (Jan. 19, 2023). See FTC Proposes the End of Employment-Based Non-Compete Agreements.
  • Health and Welfare Plans. CMA and HHS issue guidance in the form of Frequently Asked Questions (FAQs) regarding implementation of Section 112 of Title I (the No Surprises Act (NSA)) of Division BB of the Consolidated Appropriations Act, 2021 (CAA 2021), and implementing regulations published in 86 Fed. Reg. 55,980 (Oct. 7, 2021), as part of interim final rules with comment period, titled “Requirements Related to Surprise Billing; Part II.” The FAQs address the provision of good faith estimates (GFEs) for uninsured (or self-pay) individuals. FAQs on Affordable Care Act Implementation – Good Faith Estimates (GFEs) for Uninsured (or Self-Pay) Individuals – Part 4.

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