Compliance January 8, 2016

Firm Ordered to Stop Asking Applicants Age Before Job Offer

The company had set an “ideal age range” for applicants.
Reported by

Seymour Midwest, a Warsaw, Indiana, hand tool manufacturing company, will pay $100,000 and furnish other relief to resolve an age discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC).

In addition to providing monetary relief, the company has been ordered to stop collecting age information about applicants before making a job offer, train its hiring personnel, issue and post notice from its president of its commitment to federal nondiscrimination laws, and complete periodic compliance reporting.

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The EEOC charged in a lawsuit that Seymour Midwest selected Steve Maril from a pool of applicants for its senior vice president of sales position, to participate in an initial, email-based interview. In addition to questions about Maril’s experience and willingness to relocate, the company asked whether Maril was within its ideal age range of 45 to 52. When Seymour Midwest learned that Maril was 58, the company refused to hire him.

“Seymour Midwest rejected an applicant older than its ‘ideal age range’ on the assumption he wouldn’t be working long enough. Making a decision based on an ageist stereotype is discrimination that will not be tolerated,” says Laurie A. Young, regional attorney for the EEOC’s Indianapolis District Office.

Compliance January 8, 2016

IRS Guidance Shows Anticipation of Pre-Approved 403(b) Plans

The IRS has issued updated procedures for requesting letter rulings and has made changes to VCP fees.
Reported by

The Internal Revenue Service (IRS) issued Revenue Procedure 2016-4 outlining annual procedures for requesting letter rulings.

In the guidance, the IRS says a section has been added to note that opinion and advisory letters will be issued to 403(b) pre-approved plans and provide information regarding the process in obtaining such letters.

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In April 2013, the agency issued Revenue Procedure 2013-22 establishing the program and providing an instruction manual for how the program works. The deadline for submitting applications for opinion and advisory letters regarding the acceptability under Section 403(b) of the Internal Revenue Code of the form of prototype plans and volume submitter plans was April 30, 2015.

Though 403(b) plan sponsors had to adopt a written plan by December 31, 2009, they will be able to restate their plans to adopt one of the prototypes when the IRS makes them available. Those plan sponsors that did adopt their written plans by the 2009 deadline, will also be given a remedial amendment period to retroactively correct plan operational failures—i.e. plan operational practices that did not conform to document requirements or features.

In anticipation of this, to encourage employers who sponsor 401(a) qualified retirement plans and 403(b) plans to correct plan failures through the IRS’ Voluntary Correction Program (VCP), the IRS reduced the general VCP fees for most new submissions made on or after February 1, 2016. The agency also added references to 403(b) pre-approved plans in its user fee guidance. 

Another notable change is that the letter ruling guidance has been modified to clarify that the IRS Employee Plan Compliance Resolution System (EPCRS) covers SIMPLE plans and 457(b) plans.

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