BENEFITS DIGEST

Snell & Wilmer walks through what the October 22 update to the IRS retirement-plan correction program changes in practice. Self-correction now reaches more mistakes, generally available until the later of the end of the third plan year after the failure or 18 months after the plan identifies it, with exceptions. Some errors remain eligible for self-correction during an audit, including where the employer demonstrated a specific commitment to correct them before the examination began. The firm also covers the new conditions for correcting overpayments and automatic-enrollment failures. Written correction procedures remain the sponsor’s job, because the expanded program rewards plans that can show how they catch and fix their own errors.

Angela Stockbridge gets specific about the new correction program, which replaced its predecessor immediately on October 22. Her walkthrough covers the conditions for fixing eligible inadvertent failures, the correction window running to the later of the third plan-year end or 18 months after identification, and the need to document discovery and correction before an IRS examination begins. Employer-eligibility failures require stopping contributions within six months, overpayment relief carries exceptions including a $250 threshold and rollover notices, and she describes a 12-month window that applies to certain matching-contribution corrections. The separate IRA correction program opens May 1, 2027, and the earnings-floor idea tied to the Labor Department’s online calculator remains a proposal, not a current rule.

PLANSPONSOR’s Valentina Baez adds the employer-practice angle to the correction-program update, with practitioners describing how documentation and participant interviews establish when a failure was actually identified, the fact that starts the correction clock. The piece treats the updated program as effective immediately, notes the IRA correction program arrives May 1, 2027 as an application-based system, and records the January 20 comment deadline on the IRA piece. Sponsors keep their existing self-correction options, because the application program is an addition, not a replacement.

NAPA details the IRA side of the October 22 correction guidance. The new IRA program opens May 1, 2027 with corrections limited at launch to four categories. Three cover service-provider errors, a missed required minimum distribution, the wrong type of account opened, and a distribution or transfer that mishandles an inherited IRA for a nonspouse beneficiary. The fourth covers a 60-day rollover that missed its window where denying a waiver would offend equity or good conscience, including events beyond the individual’s reasonable control. Applications are filed through Pay.gov with a $3,500 fee for single filings before 2028. Rollover-deadline waivers transition out of individual IRS ruling requests, with both routes open during 2027, while the free automatic-waiver and self-certification routes stay available. Self-correction isn’t part of the IRA program at launch, and comments on both revenue procedures are due January 20, 2027.

Morgan Lewis separates what changed immediately from what arrives later in the October 22 corrections guidance. The updated Employee Plans Compliance Resolution System, the IRS program for correcting retirement-plan errors, took effect on issuance, while the IRA correction program opens May 1, 2027 and runs on applications rather than self-correction. The firm also walks through the transition for 60-day rollover-waiver requests, which move out of requests for individual IRS rulings and into the new IRA program. Sponsors and IRA custodians get a map of which procedure now governs which mistake.

Sponsors correcting certain automatic-enrollment mistakes get more time to restore missed employer matches under the [updated retirement plan correction procedure](https://www.irs.gov/pub/irs-drop/rp-26-34.pdf). The period deemed reasonable for those corrective matches increases from 6 months to 12 months after the month correct deferrals begin. The October 22 update also incorporates SECURE 2.0’s broader self-correction rules and its treatment of inadvertent overpayments, with exceptions and safeguards that still need to be checked for each error. Separately, the [new IRA correction procedure](https://www.irs.gov/pub/irs-drop/rp-26-33.pdf) opens May 1, 2027 for four specified types of failure, including certain missed required minimum distributions and rollover errors. That program requires an IRS application, generally with a $3,500 fee. Comments on both procedures are due January 20, 2027.

A doctor’s note doesn’t automatically make a wearable device eligible for tax-free reimbursement. Miller Johnson explains IRS guidance that turns on the device’s primary purpose and the individual’s circumstances, including whether it treats a specific disease rather than supports general health. That distinction matters to employers and administrators handling health FSA and HRA claims. A vendor’s eligibility label isn’t decisive either. Accessories require separate evaluation, and ordinary documentation requirements still apply.

Seyfarth’s benefits blog reads the Retire Through Ownership Act as a long-sought answer to the valuation uncertainty that has dogged employee stock ownership plan transactions, with fiduciaries now expressly permitted to rely in good faith on an independent appraisal that follows the valuation principles of Revenue Ruling 59-60. The authors argue the change should reduce litigation pressure on good-faith reliance. The statute itself preserves ERISA’s fiduciary duties and the Labor Department’s rulemaking authority, so the reliance the firm describes still sits inside the duty of prudence rather than outside it.

A business owner has her retirement plan buy commercial property and then lets her business use it without paying rent. Ferenczy Benefits Law Center’s hypothetical shows how an investment that looks convenient can turn into a prohibited transaction. Correcting it requires more than starting rent payments now. The analysis addresses valuation, restoring lost earnings and unwinding the improper arrangement, along with the possible role of the Labor Department’s voluntary correction program. A correction route doesn’t automatically erase every tax or fiduciary consequence.

Eric Altholz offers a plain-English tour of what employee benefits lawyers do and when to call one, from plan design choices through the correction programs that exist because everyone eventually needs them. He also flags a privilege trap. Legal advice about administering a plan may be discoverable by the plan’s own participants under the fiduciary exception to attorney-client privilege. Employers should ask counsel which communications are protected, and check before forwarding sensitive legal advice to vendors.

December 31, 2026 is the deadline for most calendar-year retirement plans to document, in a formal amendment, the CARES, SECURE and SECURE 2.0 changes they’ve been operating under, from Roth catch-ups for high earners and long-term part-time eligibility through super catch-ups, higher RMD ages and the optional early-withdrawal provisions. Informal IRS guidance from September 16 suggests some SECURE 2.0 amendment deadlines may slip, but the firm still recommends documenting everything implemented as part of this year-end. The discretionary review is where the litigation lessons show up. The firm suggests forfeiture language that makes the allocation choice a plan-design decision rather than a fiduciary one, claims procedures with limitations and venue provisions, a look at arbitration language, and beneficiary procedures that answer what happens after a divorce or when a beneficiary dies before being paid.

In the only benefits entry in the IRS’s Friday, October 2 batch of private letter rulings, the agency approved a single-employer pension sponsor’s request to use substitute mortality tables, tables built from the plan’s own participant experience rather than the standard government tables, in its minimum funding calculations under Code section 430. The approval runs up to 10 years starting with the plan year beginning November 1, 2026, and follows a new experience study. The same sponsor received a similar ruling in 2021. These approvals are routine, but they’re a reminder that a large plan whose population differs from the standard tables can ask to fund based on its own data. The approval carries annual reporting conditions, and the standard tables snap back if the sponsor stops supplying the data. A private letter ruling binds the IRS only as to the taxpayer who requested it.

The deadline depends on what the amendment does. Most plans adopting optional features under SECURE and SECURE 2.0 must update their documents by December 31, 2026. Required changes follow a different schedule tied to IRS guidance and the agency's annual Required Amendments lists, and later deadlines apply to certain union-negotiated plans, governmental plans, and public school 403(b) plans. These are deadlines for updating plan documents, not permission to delay following rules already in effect. One wrinkle from the IRS's September clarification helps sponsors: if the IRS later issues guidance about an optional feature a plan has already adopted, the further amendment implementing that guidance gets its own, later deadline. The IRS expects to issue final regulations on automatic enrollment, long-term part-time workers, and required minimum distributions, and the Roth catch-up requirement is expected to join the 2027 list, pushing that amendment deadline to December 31, 2029.

The IRS has moved from guidance to audits on wellness arrangements marketed as payroll-tax savings. Morgan Lewis reports that fixed indemnity plans promising FICA savings and higher take-home pay, typically through a double-dip in which pre-tax premiums come back to employees as purportedly tax-free payments, are now drawing examinations, with employers on the hook for under-withheld taxes, penalties, and interest. The agency has disagreed with these designs in a steady stream of guidance since 2016 and flagged escalating concerns in its 2024 fixed-indemnity rulemaking. Promoters' opinion letters don't change the audit math.

The fourth round of Israel-related tax relief is the broadest yet. Acts due on or after September 30, 2026 and before September 30, 2027 are postponed to September 30, 2027 for affected taxpayers, a group that includes residents and businesses in Israel, the West Bank, and Gaza, relief workers assisting there, taxpayers whose return preparer or records are located there, and spouses on joint returns. The postponed acts sweep in making contributions to a qualified retirement plan, along with return filing, payment, Tax Court petitions, and refund claims, and acts already postponed under the three prior notices roll forward another year for taxpayers who remain eligible. The IRS applies the relief automatically to taxpayers whose address of record is in the covered area; others call the disaster hotline. Plan administrators with affected participants should flag the postponement, since a contribution that looks late on its face may be timely under the notice.

The IRS is clearing out old guidance. Notice 2026-58 declares 71 revenue rulings, revenue procedures, notices, and announcements obsolete under the administration's deregulatory executive orders, the third round in the effort after earlier notices covering 9 and 83 documents. Nothing here repeals a current benefit protection. The listed items are expired or superseded, including Notice 96-8, the 1996 guidance on calculating lump sum distributions from cash balance plans, which Congress superseded in the Pension Protection Act of 2006, and financial-crisis-era funding relief for multiemployer pension plans whose election windows closed years ago. Sponsors with plan documents or procedures that still cite any listed item should confirm what replaced it.

Williams Mullen extends its year-end checklist series to governmental and church plans outside ERISA. Amendment deadlines depend on the type of plan and the change involved: for many nongovernmental plans, amendments documenting optional SECURE and SECURE 2.0 features already in use are due December 31, 2026, while required amendments can have later deadlines and governmental plans generally have additional time, a distinction the [IRS clarified this month](https://content.govdelivery.com/accounts/USIRS/bulletins/42b06be). Sponsors should document operational changes now so the eventual amendment matches how the plan actually works. The Roth catch-up requirement for participants whose prior-year FICA wages topped $150,000 applies for 2026 and rewards a payroll-system check. Also on the list: the IRS now issues determination letters for individually designed 403(b) plans, and the 2023 proposed forfeiture regulations, which generally require defined contribution forfeitures to be used within 12 months after the close of the plan year in which they arise, can be relied on now.

The IRS's August rollover guidance is optional today and a signal for tomorrow. Notice 2026-49, issued August 12, offers plans a five-step process and four sample forms for direct rollovers between plans and IRAs, as SECURE 2.0 required. Foley reads the signals in the fine print: future guidance may disallow paper checks, bar demands for Medallion signature guarantees, a bank's stamp vouching for a signature, that stall rollovers today, and let receiving plans "reasonably conclude" a sending plan is qualified, a lighter standard than the 2014 revenue ruling it would relax. Comments are due October 23.

The Retire Through Ownership Act has passed Congress and awaits the President's signature. It would give employee stock ownership plan fiduciaries a safe harbor for relying in good faith on independent appraisals that follow Revenue Ruling 59-60. Groom explains that those principles recognize a range of fair market values rather than a single exact figure, and that trustees needn't be valuation experts to rely on qualified appraisers. The safe harbor would apply to determinations made after enactment. Groom expects several years to pass before courts hear lawsuits over transactions covered by it.

A November reconciliation bill could offer another opening for retirement legislation. Senate Majority Leader Thune has said reconciliation may be the only option without Democratic cooperation on 2027 appropriations. Budget Committee Chairman Johnson has proposed a resolution authorizing up to $150 billion across eleven committees. Miller & Chevalier identifies retirement savings measures among the possible additions, though the midterm results could change the plans.

[Notice 2026-28](https://www.irs.gov/pub/irs-drop/n-26-28.pdf) led the Digest when it arrived August 5, and comments on it close October 16. Ogletree Deakins's Friday analysis is a prompt to revisit three details before then. The six-month eligibility period is an election an employer makes in its written policy, not an automatic change. Leave required or paid by a state or local program can help an employer qualify for the credit even though it doesn't increase the amount. And an employer can't claim twice for the same funded benefit, though it may use the premium method for an insured portion and the wage method for a portion paid separately from general assets. Employers can rely on the notice for tax years beginning after 2025 until proposed regulations arrive. It's one of three open comment windows. Comments on the [Trump Account and dependent-care assistance proposal](https://www.federalregister.gov/documents/2026/08/11/2026-16314/employer-contributions-to-trump-accounts-and-nondiscrimination-rules-for-dependent-care-assistance) we covered August 11 close Friday, September 25, and the Saver's Match questions from [Notice 2026-48](https://www.irs.gov/pub/irs-drop/n-26-48.pdf) close October 5.

The mechanics behind the First Thing, from the bill text. The new ERISA §3(18)(B) would let an ESOP fiduciary rely in good faith on a fair-market-value determination by an independent valuation expert or business appraiser who “relied upon the principles and methodologies set forth in Internal Revenue Service Revenue Ruling 59-60,” as the IRS amplifies and modifies it over time (weighted earnings, assets, and comparable-company analysis). Two caveats matter for counsel. The bill expressly leaves ERISA §404's prudence duties untouched, so the safe harbor would protect the price standard, not a sloppy process. And the Labor Department could still issue regulations. It would apply to valuations made on or after enactment.

The transition relief on the federal tax treatment of state PFML programs runs out after 2026, and this walkthrough focuses on the payroll consequences. Under Revenue Ruling 2025-4, as extended by Notice 2026-6, medical leave benefits funded by employer contributions are treated as wages for federal employment tax purposes, which brings withholding, employment tax, and reporting obligations that family leave benefits do not carry. Washington and Massachusetts have already restructured their programs to point employer money at family leave and employee money at medical leave. The action items are unglamorous and datable. Review how each state program is funded, and confirm the payroll vendor can capture what 2027 reporting will require.

Segal's read of the section 129 proposed regulations puts the testing mechanics up front: the eligibility test pairs a reasonable-classification standard with a numerical safe harbor, no more than a quarter of total benefits may flow to five percent owners, and average benefits for the non-highly compensated must reach 55 percent of the HCE average, counting only employees who actually use the program. The correction path may matter most in practice. Certain failures can be cured by reporting excess benefits as taxable income on the affected W-2s by the deadline. Sponsors may rely on the proposed rules now; comments close September 25.

The Labor Department's Veterans' Employment and Training Service issued an opinion letter reading the 2025 amendment that added other retaliatory action to USERRA as aligning the statute with Title VII retaliation standards. The examples go well beyond firing, schedule changes, transfers to less desirable positions, increased scrutiny, exclusion from professional opportunities, and threats all qualify when they would dissuade a reasonable worker from asserting rights—agency guidance rather than a decided case.

Proposed regulations in this morning's Federal Register would write into the regulations what Revenue Ruling 71-447 and the case law behind it established decades ago, that a racially discriminatory private school is not tax exempt. Two things are new. The rule reaches every private school from kindergarten through universities and trade schools, and it treats race-based criteria as discrimination for any purpose, sweeping in diversity-motivated scholarships, donor-restricted funds, and other school-supported programs. Religious admissions criteria survive if they are genuinely religious rather than proxies for ancestry or ethnicity. If finalized, the rule applies to taxable years beginning after May 31, 2027, and comments are due 60 days after publication.

Field Assistance Bulletin 2026-01 made late deposits of employee deferrals and loan repayments a DOL enforcement priority, and the agency is mining Form 5500 filings to find them. Small plans must deposit within seven business days of withholding; larger plans must deposit as soon as amounts can reasonably be segregated, typically two to three business days, with the fifteenth business day an emergency outer limit rather than a deadline. Ferenczy recommends written deposit procedures and prompt engagement with the Voluntary Fiduciary Correction Program when deposits slip.

Plan sponsors of qualified defined contribution plans such as 401(k) plans must update their pre-approved plans every six years to reflect law changes and to maintain their pre-approved status with the IRS. Boutwell Fay walks through what the fourth remedial amendment cycle requires and the timing sponsors should be planning around.

The August Monthly Minute reminds plan sponsors of the upcoming SECURE 2.0 plan amendment deadline and highlights a Fourth Circuit decision reflecting the litigation impact of a delayed ERISA appeal determination.

Foley's reminder that years of CARES, SECURE, and SECURE 2.0 operation may not yet be reflected in plan documents: when operations, communications, and the document diverge, the amendment deadline is the cleanup moment. A practical December 31 checklist starter.

IRS Announcement 2026-15 gives employers using preapproved defined contribution plans until September 30, 2028 to adopt newly approved documents for the fourth remedial amendment cycle. Mercer maps the dates plan sponsors and document providers need on the calendar.

Plan sponsors seeking IRS sign-off on individual plan questions get a simpler road: new Form 15662 standardizes private letter ruling requests, pay.gov filing opens August 26, and paper submissions end September 4. Worth knowing before your next plan design question needs a ruling.

Starting this year, employers can contribute to an employee's or dependent's Trump account tax free, up to a combined $2,500 per year (inflation-adjusted after 2027) under a contribution program. Groom's walk-through of this week's proposed regulations.

Treasury and the IRS announced that they will propose regulations on the Saver's Match and begin implementing an Executive Order to create a federal IRA savings program for private-sector workers without coverage.

Treasury and the IRS announce their intent to propose regulations implementing the Saver's Match program under section 6433, the SECURE 2.0 provision paying federal matching contributions of up to $1,000 directly into the retirement accounts of eligible low- and moderate-income savers for tax years beginning after December 31, 2026. The notice requests comments by October 5, 2026 on eligibility, claiming and payment mechanics, financial-institution reporting, and treatment of erroneous payments.

Private letter ruling addressing the section 4980 transfer of surplus assets from a terminating defined benefit plan to a replacement defined contribution plan. A PLR binds only its recipient.

The IRS intends to issue opinion letters on August 31, 2026 for Cycle 4 defined contribution pre-approved plans updated for the 2023 Cumulative List. The announcement also sets the employer adoption deadline and the determination letter application window for adopting employers.

Rev. Proc. 2026-30 updates the application procedures in Rev. Proc. 2026-4 to streamline requests for letter rulings.

The IRS has extended the public comment period on its Employee Plans Compliance Resolution System (EPCRS) information collection through September 25, 2026.

This column explores IRS guidance on these arrangements and potential risks to employers under federal law.

We also explore how Section 315 and Section 101 of the SECURE 2.0 Act impact plan mergers and family attribution rules, as well as why engaging ERISA counsel for a legal opinion is essential now that the IRS no longer issues determination letters for coverage testing.

Revenue Procedure 2026-26 provides the 2027 indexing adjustments for the ACA premium tax credit applicable percentage table and sets the required contribution percentage at 10.22 percent, up from 9.96 percent for 2026. That figure drives the employer affordability safe harbors, so sponsors should have it in hand before setting 2027 employee contributions.

Many retirement plans must be amended by December 31, 2026 to bring the plan document into compliance with a number of legislative changes. To ensure your plan document accurately reflects your

The countdown clock is running. The stadium lights are on, and the clock is ticking toward extra time. Plan sponsors must amend many qualified retirement plans by December 31, 2026. Just like in a

Recently-issued IRS Notice 2026-33 provides necessary guidance on long-term care distributions. Here’s what you need to know. A distribution made during the taxable year that does not exceed the

Transfer-tax safe harbor for individual donors who contribute to Trump accounts under IRC §530A. If specified conditions are met, contributions are treated as completed gifts that are not future

HDHP/§223 OOP measured in-network only (§223(c)(2)(D); a higher out-of-network OOP max does NOT defeat HDHP status; Notice 2004-2 Q&A-4, Notice 2004-50 Q&A-15/19). Deductible=floor, OOP=ceiling. MA