Client Service May 9, 2018

MetLife to Take On Pension Benefits for FedEx Retirees and Beneficiaries

Approximately 41,000 FedEx retirees and beneficiaries in defined benefit pension plans will receive annuity benefits.

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MetLife has banded together with FedEx to offer annuity benefits to 41,000 retirees and beneficiaries in FedEx’s defined benefit (DB) pension plans.  

 

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According to MetLife, the pension risk transfer (PRT) agreement involves pension obligations of $6 billion—a grouping of cash and assets from the pensions plans.

 

“By taking on a portion of the payment obligations of the FedEx defined benefit pensions plans, we will help FedEx secure its pension obligations and provide its retirees with financial security,” says Michael Khalaf, president, U.S. Business and EMEA at MetLife.

 

MetLife’s 2017 Pension Risk Transfer poll found 57% of plan sponsors are attracted to an annuity buyout option for DB plans—an increase from 46% in 2015. Additionally, 77% of those interested said they would likely implement a buyout within the next two years.

 

The insurance company says FedEx will buy a group annuity contract from MetLife, which then will be responsible for benefit payments to covered retirees and beneficiaries. The agreement will not alter monthly benefits for annuitants.

 

According to the company, further details will be delivered to retirement participants and beneficiaries with continuing payments to be made by MetLife.  

Compliance May 9, 2018

Remind 403(b) Plan Clients to File Form 990

Failure to do so could result in their tax-exempt status being revoked, which will affect their ability to offer 403(b) plans.

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The Internal Revenue Service (IRS) issued a reminder for certain tax-exempt organizations that the Tuesday, May 15 filing deadline for Form 990-series information returns is fast approaching.

Form 990-series information returns and notices are normally due on the 15th day of the fifth month after an organization’s tax-year ends.

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Small tax-exempt organizations with average annual gross receipts of $50,000 or less may file an electronic notice called a Form 990-N (e-Postcard). This form requires only a few basic pieces of information. Tax-exempt organizations with average annual gross receipts above $50,000 must file a Form 990 or 990-EZ, depending on their receipts and assets. Private foundations must file Form 990-PF.

Organizations that need additional time to file a Form 990, 990-EZ or 990-PF may obtain an automatic six-month extension. Use Form 8868, Application for Extension of Time to File an Exempt Organization Return, to request an extension. The request must be filed by the due date of the return. No extension is available for filing the Form 990-N (e-Postcard).

Organizations that fail to file annual reports for three consecutive years will see their federal tax exemptions automatically revoked as of the due date of the third year for which they are required to file an annual report. The Pension Protection Act (PPA) mandates that most tax-exempt organizations file annual Form 990-series information returns or notices with the IRS. The law also imposed a new annual filing requirement for small organizations. Churches and church-related organizations are not required to file annual reports. Losing tax-exempt status will have an effect on offering 403(b) retirement plans.

The IRS also urges tax-exempt organizations to file forms electronically to reduce the risk of inadvertently including Social Security numbers or other unnecessary personal information. Electronic filing also provides acknowledgement that the IRS has received the return and reduces normal processing time, making compliance with reporting and disclosure requirements easier.

More information can be found in the Instructions for Form 990, Return of Organization Exempt from Income Tax.

The IRS offers a search tool, called Tax Exempt Organization Search (TEOS), with which users can find key information about the federal tax status and filings of certain tax-exempt organizations, including whether organizations have had their federal tax exemptions automatically revoked and if an organization is eligible to receive tax-deductible contributions.

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