C-ELBW cheat sheet

ERISA §201/§3(34) covers tax-qualified pension plans; IRC §401(a) lists the qualification requirements a trust must satisfy to be tax-exempt.

ERISA §202 and IRC §410(a) minimum age/eligibility: age 21 and one year of service (1,000 hours) maximum; 2 years permitted only if 100% immediate vesting.

IRC §411(a) vesting schedules: 3-year cliff or 2-6 year graded for employer contributions; 401(k) deferrals and safe harbor contributions are always 100% vested.

IRC §411(a)(11) and ERISA §203(e): consent required for distributions over $5,000 (mandatory cash-out threshold raised to $7,000 by SECURE 2.0 §304, effective 2024).

ERISA §204(b) and IRC §401(a)(4) prohibit discrimination in contributions/benefits in favor of highly compensated employees.

IRC §401(a)(9) required minimum distributions: SECURE 2.0 raised the RMD age to 73 (2023) and 75 (2033); 10-year rule applies to most non-spouse designated beneficiaries.

ERISA §402 requires a written plan document and a summary plan description furnished within 120 days of plan establishment (ERISA §104(b)).

IRC §4975 prohibited transactions mirror ERISA §406: sale/exchange, lending, furnishing goods/services, and use of plan assets for fiduciary self-interest.

ACA §2711 (PHSA §2711) eliminated lifetime dollar limits and restricts annual limits on essential health benefits for non-grandfathered plans.

ACA §2713 preventive services mandate: in-network preventive care must be covered without cost-sharing (subject to USPSTF/HRSA/ACIP recommendations).

ACA §2718 out-of-pocket maximums and ACA §2715 internal/external claims appeal rules apply to non-grandfathered group health plans.

HIPAA portability (PHSA §2701) limits preexisting-condition exclusions to 12 months (18 for late enrollees) and requires crediting of prior creditable coverage; ACA eliminated preexisting exclusions for all plans.

HIPAA privacy/security: PHSA §264 and 45 CFR Parts 160/164 govern PHI; group health plans must maintain safeguards and business associate agreements.

COBRA (ERISA §601-608, IRC §4980B): 18-month continuation for termination/reduction in hours; 29 months for disability; 36 months for other qualifying events.

COBRA election period is 60 days, and premiums may be charged up to 102% of the applicable premium (150% during disability extension).

MHPAEA (ERISA §712) requires parity in financial requirements and treatment limitations between mental health/substance use disorder benefits and medical/surgical benefits.

ERISA §404(a)(1) five duties: exclusive purpose, prudence, diversification, plan document compliance, and reasonable fees.

ERISA §3(21)(A) fiduciary act: discretionary authority/control over management or disposition of plan assets or rendering investment advice for a fee.

ERISA §406(a) party-in-interest transactions: sales, loans, extensions of credit, and services between plan and disqualified persons unless exempt under §408.

ERISA §406(b) fiduciary self-dealing: a fiduciary may not deal with plan assets in its own interest or represent adverse parties.

ERISA §408(b)(2) reasonable arrangement exemption requires reasonable compensation, no personal benefit, and (for covered service providers) written fee disclosure.

ERISA §404(c) participant-directed relief: applies only if the participant exercises independent control over at least three diversified investment alternatives and receives required disclosures.

ERISA §405(c) co-fiduciary liability: liability for another fiduciary's breach if the fiduciary knowingly participates, conceals, or fails to remedy after discovery.

ERISA §409(a) remedies: breaching fiduciary is personally liable for losses and must restore profits; equitable relief available under §502(a)(3).

IRC §410(b) coverage: a plan must cover at least 70% of non-excludable NHCEs or satisfy the ratio percentage test / average benefit test.

IRC §401(a)(4) general nondiscrimination test: contributions/benefits must be nondiscriminatory in amount or a safe harbor (e.g., §401(k), §401(a)(4) design-based safe harbors).

ADP test (IRC §401(k)(3)): HCE average deferral percentage may exceed NHCE ADP by at most 2 points (if NHCE ADP ≤ 2%) or by 1.25 times (if > 8%); safe harbor 401(k) exempts plan from ADP/ACP.

ACP test (IRC §401(m)(2)) applies to matching and after-tax contributions using the same 2-point/1.25x limits.

IRC §401(a)(17) compensation limit ($345,000 for 2024, $350,000 for 2025) and §415(c) annual additions limit ($69,000 for 2024, $70,000 for 2025).

IRC §414(v) catch-up: $7,500 (2024, age 50+) and $11,250 (2025, ages 60-63 under SECURE 2.0 §109); 401(k) elective deferral limit $23,000 (2024) / $23,500 (2025).

Top-heavy (IRC §416): if account balances of key employees exceed 60% of total, minimum contribution of 3% of compensation (or 5% of compensation for defined benefit plans) applies.

IRC §414(s) compensation definition: must be reasonable and nondiscriminatory; safe harbor definitions include total compensation and W-2 wages.

Form 5500 (ERISA §103/§104) is due by the last day of the 7th month after plan year end (July 31 for calendar-year plans), with automatic extension via Form 5558.

Schedule H applies to large plans (100+ participants); Schedule I applies to small plans; Schedule R reports distributions and Schedule SB/MB for actuarial info.

ERISA §104(b) SPD: must be furnished within 120 days of plan establishment and within 90 days of a material modification; summary of material modifications (SMM) required within 210 days after plan year end.

ERISA §101 and 29 CFR 2520.104b-1: disclosures must be furnished in a manner reasonably calculated to ensure actual receipt; electronic delivery permitted under 2020 DOL safe harbor.

ERISA §103(a)(3)(C) audit requirement: large plans (100+ participants with balances) must attach an independent qualified public accountant opinion to Form 5500.

Form 5500 Schedule C: reporting of service provider compensation (direct and indirect) for large plans; Schedule A for insurance contracts.

ERISA §502(c) civil penalties: up to $110/day for failure to furnish SPD (indexed annually) and up to $1,000/day for failure to file Form 5500 (indexed).

Participant fee disclosure under ERISA §404(a)(5) and 29 CFR 2550.404a-5: annual and quarterly disclosures of plan and investment fees.

IRC §409A(a)(2) permissible payment events: separation from service, disability, death, specified time, change in control, or unforeseeable emergency.

IRC §409A(a)(3): election timing rules-initial deferral election must be made before the year of service (or within 30 days of eligibility for new participants).

IRC §409A(a)(4): distribution timing must be fixed; a subsequent deferral must be at least 5 years later and elected at least 12 months before payment.

IRC §409A(a)(1)(B) penalties: immediate inclusion in gross income, 20% additional tax, plus interest at the underpayment rate plus 1%.

IRC §280G: excess parachute payments to disqualified individuals trigger 20% excise tax on the recipient and loss of corporate deduction; excess = parachute payment over 3x base amount.

IRC §162(m): $1 million deduction limit on compensation to covered employees; grandfathered arrangements and certain commissions/qualified plan contributions excepted.

IRC §162(m) covered employee definition (post-TCJA): CEO, CFO, and three other highest-paid employees; once covered, status is permanent.

IRC §409A(b) offshore/rabbit trust funding restrictions: funding triggers immediate income inclusion and 20% tax to covered employees.

IRC §104(a)(2): damages for personal physical injury or physical sickness are excludable; emotional distress damages are taxable (except amounts for medical care).

IRC §105(b): employer-provided health benefits reimbursing medical care are excludable; §106 excludes employer contributions to accident/health plans.

IRC §125 cafeteria plans: participants may choose among cash and qualified benefits; irrevocable elections except for HIPAA special enrollment or change-in-status events.

IRC §129 dependent care assistance: up to $5,000 ($2,500 MFS) excluded from income; must be for qualifying individuals and employment-related.

IRC §79 group-term life insurance: employer-paid coverage up to $50,000 is excludable; excess is taxed using Table I rates.

IRC §402(g): elective deferrals in excess of the annual limit are includible in income and, if not corrected, taxable in the year of deferral.

IRC §72(t): early distributions before age 59½ are subject to a 10% additional tax unless an exception applies (disability, death, separation at 55, QDRO, etc.).

IRC §3405 and §3402: withholding rules for pension distributions (20% mandatory on eligible rollover distributions) and wage withholding on taxable benefits.

29 CFR 2560.503-1 sets the claims procedure: initial determination within 90 days (group health 30 days) with a possible 90-day extension.

Disability claims: 45 days initial determination, two 30-day extensions; appeals must be decided within 45 days (with one 45-day extension).

Group health post-service claims: 30 days initial, 60 days appeal; pre-service claims: 15 days initial, 30 days appeal.

Adverse benefit determinations must include the specific reason, plan provisions relied on, and a description of appeal procedures and review rights.

ERISA §503 requires a full and fair review; claimant entitled to submit evidence and receive copies of relevant documents.

ERISA §502(a)(1)(B) allows a participant to bring a civil action to recover benefits due under the plan; §502(a)(3) allows equitable relief for breaches.

ERISA §502(a)(2) suits for fiduciary breach are brought on behalf of the plan; personal recovery is not available under §502(a)(2).

Statute of limitations under ERISA §413: 6 years from the breach (3 years if the plaintiff had actual knowledge), with a 6-year cap for fraud/concealment.

ERISA §4201: complete withdrawal occurs when an employer permanently ceases to have an obligation to contribute or permanently ceases all covered operations.

ERISA §4203: partial withdrawal arises from a 70% contribution decline or a 70% decline in contribution base units over the test period.

ERISA §4205: sale of assets to an unrelated purchaser results in no withdrawal liability if the purchaser assumes the obligation and posts a bond for 5 plan years.

ERISA §4211: allocation methods include the presumptive method, the modified presumptive method, the rolling-5 method, and the direct attribution method.

ERISA §4219: employer may request a withdrawal liability estimate from the plan; §4219(b)(2) provides a 90-day review period after notice.

ERISA §4221: arbitration must be initiated within 60 days of the plan's response to a request for review; §4221(f) arbitration is the exclusive remedy.

ERISA §4225: mass withdrawal and plan insolvency rules; PBGC guarantee limits apply to multiemployer plans under ERISA §4022A.

ERISA §4212: withdrawal liability is calculated as the employer's allocable share of unfunded vested benefits, discounted to present value.

ERISA §404(a)(1)(A) exclusive purpose rule: fiduciaries must act solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits and defraying reasonable expenses.

ERISA §404(a)(1)(B) prudence standard: a fiduciary must act with the care, skill, prudence, and diligence of a prudent person familiar with such matters.

ERISA §406(b) prohibits fiduciary self-dealing; §408(c) permits reasonable compensation for services rendered by a fiduciary in a non-fiduciary capacity.

Conflict-of-interest disclosure: ERISA §408(b)(2) requires covered service providers to disclose direct and indirect compensation and any related-party relationships.

Ethical duty of confidentiality flows from HIPAA privacy (45 CFR 164.502) and ERISA fiduciary duties; PHI may not be used for non-plan purposes without authorization.

Prohibited transaction excise tax (IRC §4975(a)): 15% of the amount involved per year; corrected by undoing the transaction, with a 100% tax if not corrected within the taxable period.

Professional standards: ASPPA/NIPA codes of ethics require competence, integrity, and compliance with applicable law; misrepresentation to participants is a fiduciary breach.

ERISA §404(a)(1)(D) plan document rule: fiduciaries must act in accordance with plan documents and instruments, to the extent consistent with ERISA.

EPCRS (Rev. Proc. 2021-30) has three components: Self-Correction Program (SCP), Voluntary Correction Program (VCP), and Audit CAP.

SCP permits self-correction of operational failures without IRS involvement if the plan has established practices and procedures and the failure is corrected timely.

VCP requires a compliance statement and payment of a user fee (based on plan assets or number of participants); correction methods include retroactive amendment and corrective distributions.

Audit CAP applies when failures are discovered on examination; sanctions are negotiated and generally higher than VCP fees.

Rev. Proc. 2021-30 extended SCP to significant operational failures if corrected within 2 years (or 3 years for certain failures) and requires the plan to have a favorable determination letter.

EPCRS correction methods: restore the plan to the position it would have been in absent the failure, including missed deferral opportunity corrections (50% of missed deferrals for certain failures).

DOL Voluntary Fiduciary Correction Program (VFCP) allows correction of breaches (e.g., late deposits, prohibited transactions) with a no-action letter; late deposit correction uses lost earnings.

Late deposit safe harbor: participant deferrals must be deposited by the 15th business day of the month following withholding (small plans); DOL treats the 7th business day as a safe harbor for large plans.

SECURE 2.0 (Div. T of Consolidated Appropriations Act, 2023) §101: automatic enrollment mandate for new 401(k)/403(b) plans established after Dec. 29, 2022 (3% default, 1%/year escalation to 10%-15%).

SECURE 2.0 §109: super catch-up for ages 60-63 ($11,250 in 2025); §603: Roth catch-up requirement for high earners (wages over $145,000 indexed) effective 2026.

SECURE 2.0 §601: 529-to-Roth IRA rollovers up to $35,000 lifetime, subject to 15-year account age and contribution limits.

SECURE 2.0 §127: emergency personal expense distributions up to $1,000 per year, exempt from the 10% early withdrawal tax.

SECURE 2.0 §115: pension-linked emergency savings accounts (PLESAs) for non-HCEs, capped at $2,500, with matching contributions permitted.

SECURE 2.0 §125: domestic abuse victim distributions up to $10,000 (indexed) or 50% of vested balance, exempt from the 10% early withdrawal tax.

DOL Fiduciary Rule (2024) and Retirement Security Rule: expanded definition of investment advice fiduciary; stayed by federal courts in 2024 (status subject to litigation).

SECURE 2.0 §501: paper statement mandate-at least one paper benefit statement per year for participants unless they opt out electronically.