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Vol. XV, Issue 9

March 22, 2016

Legislative Update—Church Plan Clarification Provisions’ Impact on Retirement, Health and Welfare Plans

The Protecting American from Tax Hikes Act of 2015 (“PATH Act,” signed into law December 18, 2015) contains important new rules and clarifications that impact church retirement and health and welfare benefit plans. One particular section of that law, Section 336, includes provisions that are identical to the Church Plan Clarification Act of 2015 (CPCA), which is Church Alliance-authored legislation that the General Board has been supporting for many years. Section 336 includes five topics that are important to church benefit plans.

  1. “Controlled Group” rules for determining when separate entities must be treated as one employer for various purposes
  2. Pre-emption of state laws that would restrict automatic enrollment in church retirement plans
  3. Easing of the rules regarding transfers and mergers of assets between church retirement plans
  4. Modification of the “Section 415” contribution and benefit limitations that apply to grandfathered 403(b) defined benefit plans
  5. Easing of rules regarding church plans investing in group trusts

Additionally, the PATH Act delayed the Affordable Care Act (ACA)’s “Cadillac” Plan Tax (the excise tax on high-cost health plans) by two years to 2020.

The timing of this Act is helpful, since a number of churches are trying to decide whether they should be treated as a single employer with other church organizations for purposes of the ACA’s Employer Shared Responsibility Rule (i.e., employer mandate).

Highlights of the church plan clarification provisions and Cadillac plan tax delay are described here.

Holiday Closing—Good Friday

The General Board will be closed on Friday, March 25, in observance of Good Friday. Customer service assistance will be unavailable that day.

Benefits Access for participants and the Interactive Voice Response (IVR) system, accessible by calling 1-800-851-2201, will be available. Participants can use either of these tools to access account information and make transactions 24 hours a day, seven days a week.

The Wespath Institutional Investor Portal and Benefits Access also will be available for plan sponsors, conferences and institutions on this day.

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