Regulatory safe harbors play a critical role in the design of employee benefit plans by:
- Providing concrete guidance on how to comply with the complex rules that govern plans;
- Facilitating efficient, effective and consistent plan administration; and
- Encouraging employers to establish and continue their employee benefit plans and furthering participants’ understanding of the rules.
Without this guidance, employers, fiduciaries, and service providers would find themselves more regularly exposed to the potentially staggering costs of responding to alleged rule violations, participants would have a harder time understanding how their plans operate, and it would be more difficult for regulators to assess the legality of plan documents.
John Vine, Senior Counsel at Covington & Burling, LLP, has recently published an article entitled “Safe Harbors for Employee Benefit Plans” in BNA’s Tax Management Compensation Planning Journal. The article examines regulatory safe harbors and explains how they differ from other forms of administrative guidance. The article also explains how well-designed regulatory safe harbors support important policy goals and offers suggestions for improving regulatory safe harbors in the future.
Given the importance of regulatory safe harbors to the employee benefit plan system, employers, fiduciaries and even plan participants will find this article to be interesting and informative.