Human Resource Consulting From The Business Viewpoint
Human Resource Update | October 2020
Retirement Plan Positions
In our last newsletter we reviewed the changes candidate Biden proposes to make to retirement plans. This month we will look at the changes President Trump has made and proposes. The main difference between the two candidates is that the Trump actions and proposals seem to expand what can be done with retirement plans while protecting Social Security. Here is a summary of actions done and proposals:
  • The most significant retirement-related legislation that passed during President Trump’s first term was the bipartisan Setting Every Community Up for Retirement (or SECURE) Act.
  • In August, President Trump issued an executive order that led to IRS guidance allowing employers to temporarily stop collecting Social Security payroll taxes during a "suspension period" from Sept. 1 through the end of the year for employees whose wages are less than $4,000 for a biweekly pay period. Companies that suspend collection of employees' payroll tax would collect additional amounts from workers' paychecks from Jan. 1 through April 30 next year to repay the tax obligation.
  • President Trump has vowed not to cut Social Security or Medicare and Medicaid and hasn’t proposed changing or limiting this core federal retirement program.
  • The Trump administration is considering including a proposal known as USA accounts — which would combine and simplify all existing savings accounts" that provide tax breaks, such as 401(k)s and individual retirement accounts (IRAs), among others. 
  • The Trump administration has considered introducing a middle-class tax cut package that would include larger tax breaks for retirement savings.
  • The Trump administration is considering introducing a provision to prevent retirement plan fiduciaries from casting corporate-shareholder proxy votes in favor of social or political positions that don't advance the financial interests of retirement plan participants.
  • Although not part of company sponsored retirement plans, consideration be given to a tax incentive for more US citizens to buy stocks.
  • Some consideration has been given to replacing the Social Security payroll tax on employees with funding from general revenues.
  • No change in taxes on corporations vs Biden’s dramatic increase in corporate taxes which will drive down stock prices and diminish 401(k) plan values.

We hope that the information we provided last month and this month will help you in your voting decision. If we may provide any additional information, please ask.

Michael F. Yates
If you find value in this newsletter please let us know. Feel free to call me with a comment and/or ask a question at any time (908-689-4200) or send me an email ( We offer this timely information as another benefit of your relationship with our company. If you feel a friend or colleague would benefit from receiving our newsletter, please feel free to forward a copy. 

You can view all of our newsletters by clicking the 'newsletter archives' link at our company website
CARES Act - New Guidance Could Impact 2020 PBGC Premiums
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act was enacted in response to the COVID 19 pandemic. Its purpose was to provide economic assistance for workers, families, and businesses negatively affected. The Act is massive in its scope, including over $2 trillion in Federal spending and covering many areas, including employee benefit plans. Recently, the U.S. Treasury Dept. has issued guidance on implementing the law for employers who sponsor pension plans.

Single-employer defined benefit pension plans guidance can be found here, while Profit sharing and 401(k) plans recent guidance can be found here.

For single-employer defined benefit pension plans, one of the most significant features of the guidance is to allow plan sponsors to make the required pension plan minimum funding contributions for the 2019 plan year all the way to January 1, 2021. Without this change, the contribution deadline for 2019 would be September 15, 2020. This seemingly small change has a LOT of implications, including the Form 5500 information, calculation of the AFTAP ratio (necessary to allow normal benefit and distribution operations), and other technical issues that affect the next year's valuation, all of which are discussed in the Questions and Answers part of the guidance.

One of the more interesting Questions is Q-11, which asks:

"Q-11: Does the extended due date under § 3608(a) of the CARES Act (i.e. January 1, 2021) change the date by which a contribution must be made in order to be deducted for a taxable year under § 404 of the Code?"

"A-11: No, the extended due date under § 3608(a) of the CARES Act does not change the date by which a contribution must be made in order to be deducted for a taxable year under § 404 of the Code. Under § 404(a)(6), a taxpayer is deemed to have made a payment on the last day of the preceding taxable year if the payment is on account of that taxable year and is made no later than the time prescribed by law for filing the return for that taxable year (including extensions)."

This may result in many animated conversations between plan sponsors and their company accountants.

New PBGC Guidance

Around this time of year, a favorite activity of defined benefit pension plan sponsors is to send a check to PBGC for the yearly plan termination premium coverage. For plans that are under-funded, i.e. plans with asset value less than the value of covered benefits, the premium amount can be very substantial. For example, the 2020 premium calculation would include up to 4.5% of any such under-funding that exists on the valuation date. So, if on the valuation date the plan's asset value is $10,000,000 and the value of vested benefits is $12,000,000, the premium would include a charge of $90,000 (i.e. .045 x 12,000,000 - 10,000,000, assuming the per participant cap is not applicable.)

It is evident that in doing this calculation, the plan's asset value on the valuation date is quite important. Assuming a calendar year plan, the value of assets at valuation date January 1, 2020 would include any contributions made during 2020 that are attributable to 2019, assuming they are made by October 15, 2020. For under-funded plans, therefore, we see that being able to include these prior year contributions has an immediate favorable impact on the premium amount, by 4.5% of their totals.

As stated above, the CARES Act changed the date for making the required minimum funding contributions to January 1, 2021. It is also silent on any special rules pertaining to how the PBGC premiums are calculated. So without new guidance, any 2019 contributions made taking advantage of the later funding date requirements of the CARES Act would not be included in the asset value.

PBGC remedied this by issuing guidance, Click here for more information.

Essentially, this guidance allows prior year contributions made up to January 1, 2021 pursuant to the CARES Act to be recognized in the 2020 PBGC premium process.

To receive this relief, the PBGC premium must still be filed by October 15, 2020, but NOT INCLUDING the 2019 contributions received after the filing date. Then, after all the 2019 contributions have been received, the original 2020 PBGC filing may be amended to revise the asset value showing all of the 2019 contributions through January 1, 2021. Any excess premium will be subsequently refunded from PBGC.

Note that in the above discussion, the January 1, 2021 date is used with no qualification, because that is what is stated in the law. However, for plan sponsors subject to the ASC 715 accounting rules, actually making a contribution on January 1, 2021 could impact the accounting treatment for that payment. Plan sponsors should consult with their accountants and agree on the proper dates for making these contributions.
Contact Tracing For COVID-19 From The CDC
What happens if an employee is exposed to COVID-19? If your folks are back in the office, based on the following you may not have to close down completely (see below).

Summary Of COVID-19 Specific Practices
  • State and local public health officials will decide how to implement these activities and how to advise specific people, or groups of people, to be tested.
  • Contact tracing will be conducted for close contacts (any individual within 6 feet of an infected person for at least 15 minutes) of laboratory-confirmed or probable COVID-19 patients.
  • Remote communications for the purposes of case investigation and contact tracing should be prioritized; in-person communication may be considered only after remote options have been exhausted.
  • Testing should be considered for all close contacts of confirmed or probable COVID-19 patients.
  • Those contacts who test positive (symptomatic or asymptomatic) should be managed as a confirmed COVID-19 case.
  • Asymptomatic contacts testing negative should self-quarantine for 14 days from their last exposure (i.e., close encounter with confirmed or probable COVID-19 case.)
  • If testing is not available, symptomatic close contacts should self-isolate and be managed as a probable COVID-19 case.
  • Asymptomatic close contacts who are not tested should self-quarantine and be monitored for 14 days after their last exposure, with linkage to clinical care for those who develop symptoms.
Protect Yourself And Others In The Workplace
Center For Disease Control (CDC) Latest COVID-19 Guidance
The following is the latest guidance (as of September 11, 2020) from the CDC for safe practices during the continuing COVID-19 pandemic:
Stay Home When Needed
Monitor Your Health
  • Be alert for symptoms. Watch for fever, cough, shortness of breath, or other symptoms of COVID-19. [This is especially important if you are running essential errands, going into the office or workplace, and in settings where it may be difficult to keep a physical distance of 6 feet.]
  • Take your temperature if symptoms develop. [Don't take your temperature within 30 minutes of exercising or after taking medications that could lower your temperature, like acetaminophen.]
  • Follow CDC guidance if symptoms develop.
Wear A Mask
  • Wear a mask in public settings where staying 6 feet apart (about two arms length) is not possible. Interacting without wearing a mask increases your risk of getting infected.
  • Wearing a mask does not replace the need to practice social distancing.
Social Distance In Shared Spaces
  • Maintain at least 6 feet of distance between you and others. COVID-19 spreads easier between people who are within 6 feet of each other.
  • Keeping distance from other people is especially important for people who are at increased risk for severe illness, such as older adults and those with certain medical conditions.
  • Indoor spaces where it might be harder to keep people apart and there's less ventilation are more risky than outdoor spaces.
  • Avoid close contact with others on your commute to work, if possible. Consider biking, walking, driving either alone or with other members of your household. Learn how to protect yourself when using transportation to commute to work.
Wash Your Hands Often
  • Wash your hands often with soap and water for at least 20 seconds or use hand sanitizer with at least 60% alcohol if soap and water are not available. If your hands are visibly dirty, use soap and water over hand sanitizer.
  • Avoid touching your eyes, nose, and mouth if you have not washed your hands.
Cover Your Coughs And Sneezes
  • Remember to cover your mouth and nose with a tissue when you cough or sneeze, or use the inside of your elbow. Throw used tissues into no-touch trash cans and immediately wash hands with soap and water for at least 20 seconds.
  • If soap and water are not available, use hand sanitizer containing at least 60% alcohol.
Avoid Sharing Objects And Equipment
  • Avoid using other employees' phones, desks, offices, or other work tools and equipment, when possible. If you cannot avoid using someone else's workstation, clean and disinfect before and after use.
Clean And Disinfect Frequently Touched Surfaces And Objects
  • Clean and disinfect frequently touched objects and surfaces, like workstations, keyboards, telephones, handrails, and doorknobs. Dirty surfaces can be cleaned with soap and water before disinfection.
  • To disinfect, use these EPA-registered disinfectants.

The taxable wage base in New York for 2021 will be $11,800, up $200 from the taxable wage base amount of $11,600 in 2020.
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COVID-19 Testing In The Workplace
Below is pertinent information about the types of tests that are permissible by employers according to the Food and Drug Administration (FDA), testing costs and test locations. As general guideline, tests that are approved by the FDA and conducted during the pandemic are covered.

Antibody Testing-not authorized as a valid test for employers.
The Food and Drug Administration has not authorized antibody testing to diagnose COVID-19, and the CDC does not currently recommend using antibody testing for diagnosis of any infection. In certain situations, antibody tests may be used in conjunction with viral detection tests to support clinical assessment of persons who present late in their illnesses. In addition, if a person is suspected of having a post-infectious syndrome caused by COVID-19 (e.g., Multisystem Inflammatory Syndrome in Children; MIS-C), antibody tests may be used to determine prior infection.

According to the EEOC which enforces workplace anti-discrimination laws including the Americans with Disabilities Act (ADA) and the Rehabilitation Act and other EEO laws, according to the ADA, an antibody test constitutes a medical exam and is therefore prohibited.

Testing Costs
The FFCRA and the CARES Act (FFCRA) was enacted on March 18, 2020.4 Section 6001 of the FFCRA generally requires group health plans and health insurance issuers offering group or individual health insurance coverage to provide benefits for certain items and services related to testing for the detection of SARS-CoV-2, the virus that causes COVID-19, or the diagnosis of COVID-19 (generally referred to collectively in this document as COVID-19) when those items or services are furnished on or after March 18, 2020, and during the applicable emergency period. Under the FFCRA, plans and issuers must provide this coverage without imposing any cost-sharing requirements (including deductibles, copayments, and coinsurance), prior authorization, or other medical management requirements. Section 3201 of the CARES Act amended section 6001 of the FFCRA to include a broader range of diagnostic items and services that plans and issuers must cover without any cost-sharing requirements, prior authorization, or other medical management requirements.

Out of network providers are prohibited from billing patients for the excess costs for the testing and related doctor's visits.

However, if the testing is not for individualized diagnosis or treatment of COVID-19 it is beyond the scope of section 6001 of the FFCRA. Below is Question 5 for more detail.

Q5. Is COVID-19 testing for surveillance or employment purposes required to be covered under section 6001 of the FFCRA?
No. Section 6001 of the FFCRA requires coverage of items and services only for diagnostic purposes as outlined in this guidance. Clinical decisions about testing are made by the individual's attending health care provider and may include testing of individuals with signs or symptoms compatible with COVID-19, as well as asymptomatic individuals with known or suspected recent exposure to SARS-CoV-2, that is determined to be medically appropriate by the individual's health care provider, consulting CDC guidelines as appropriate.13 However, testing conducted to screen for general workplace health and safety (such as employee "return to work" programs), for public health surveillance for SARS-CoV-2, or for any other purpose not primarily intended for individualized diagnosis or treatment of COVID-19 or another health condition is beyond the scope of section 6001 of the FFCRA.

How to Get a COVID-19 Test
COVID-19 tests are available at no cost nationwide at health centers and select pharmacies. The Families First Coronavirus Response Act ensures that COVID-19 testing is free to anyone in the U.S., including the uninsured. Additional testing sites may be available in your area. Contact your health care provider or your state or local public health department for more information.

Health Centers
Health centers are an important component of the national response to the COVID-19 pandemic. Find a health center near you for available COVID-19 screening and testing. Please call the health center for more information.
HHS has partnered with pharmacies and retail companies to accelerate testing for more Americans in communities across the country. These companies are coordinating with state and local governments to:
  • Provide Americans with faster, less invasive and more convenient testing.
  • Protect healthcare personnel by eliminating direct-contact with symptomatic individuals.
  • Expand testing to communities across the United States, especially those that are under-tested and socially vulnerable.

Please visit these companies' websites to learn more about their efforts to provide timely and accessible COVID-19 testing or to schedule an appointment.

  • CVS Health
  • Kroger in partnership with eTrueNorth
  • Local Independent Pharmacies in partnership with Health Mart, eTrueNorth and TOPCO
  • Rite Aid
  • Walgreens
  • Walmart in partnership with eTrueNorth
  • Walmart in partnership with Quest Diagnostics
Frequently Asked Questions About Service Animals And The ADA
Many people with disabilities use a service animal in order to fully participate in everyday life. Dogs can be trained to perform many important tasks to assist people with disabilities, such as providing stability for a person who has difficulty walking, picking up items for a person who uses a wheelchair, preventing a child with autism from wandering away, or alerting a person who has hearing loss when someone is approaching from behind.

The Department of Justice continues to receive many questions about how the Americans with Disabilities Act (ADA) applies to service animals. The ADA requires State and local government agencies, businesses, and non-profit organizations (covered entities) that provide goods or services to the public to make "reasonable modifications" in their policies, practices, or procedures when necessary to accommodate people with disabilities. The service animal rules fall under this general principle. Accordingly, entities that have a "no pets" policy generally must modify the policy to allow service animals into their facilities. The ADA's Q&As provide guidance on the ADA's service animal provisions and should be read in conjunction with the publication ADA Revised Requirements: Service Animals.

There are 37 questions in the Q&A. The first four are answered here:

Definition Of A Service Animal
Q1. What is a service animal?
A. Under the ADA, a service animal is defined as a dog that has been individually trained to do work or perform tasks for an individual with a disability. The task(s) performed by the dog must be directly related to the person's disability.

Q2. What does "do work or perform tasks" mean?
A. The dog must be trained to take a specific action when needed to assist the person with a disability. For example, a person with diabetes may have a dog that is trained to alert him when his blood sugar reaches high or low levels. A person with depression may have a dog that is trained to remind her to take her medication. Or, a person who has epilepsy may have a dog that is trained to detect the onset of a seizure and then help the person remain safe during the seizure.

Q3. Are emotional support, therapy, comfort, or companion animals considered service animals under the ADA?
A. No. These terms are used to describe animals that provide comfort just by being with a person. Because they have not been trained to perform a specific job or task, they do not qualify as service animals under the ADA. However, some State or local governments have laws that allow people to take emotional support animals into public places. You may check with your State and local government agencies to find out about these laws.

Q4. If someone's dog calms them when having an anxiety attack, does this qualify it as a service animal?
A. It depends. The ADA makes a distinction between psychiatric service animals and emotional support animals. If the dog has been trained to sense that an anxiety attack is about to happen and take a specific action to help avoid the attack or lessen its impact, that would qualify as a service animal. However, if the dog's mere presence provides comfort, that would not be considered a service animal under the ADA.

If you have State specific service animal or support animal questions, please check your State website and see if they have more specific laws that would govern.
What Would You Like To See In A Future Issue?
47,160, OSHA Final Rule Amends Regs On Agency Access To Employee Medical Records - AGENCY REGULATION, (Jul. 31, 2020)
OSHA has issued a final rule that amends the regulation addressing the rules of agency practice and procedure concerning OSHA access to employee medical records. The final rule transfers the approval of written medical access orders (MAO) from the Assistant Secretary for Occupational Safety and Health to the OSHA Medical Records Officer (MRO) and makes the MRO responsible for making determinations about inter-agency transfer and public disclosure of personally identifiable medical information in OSHA's possession.

The final rule was effective upon publication in the Federal Register on July 30.

Among other things, the final rule also:
  • Clarifies that a written MAO does not constitute an administrative subpoena;
  • Eliminates outdated requirements for the removal of direct personal identifiers when OSHA personnel review medical information away from a worksite; and
  • Establishes new procedures for the access and safeguarding of personally identifiable employee medical information in electronic form.
  • According to the federal safety and health agency, the revisions made to 29 C.F.R. part 1913.10 "will increase employee privacy and enhance OSHA's ability to safeguard personally identifiable medical information."

Source: By WK Editorial Staff
2020 Retirement Plan Limits
All limits are based on the calendar year.
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  • Michael F. Yates & Company, Inc. can help you with a variety of services ranging from retirement plans to providing results-oriented survey instruments, training and development programs for your employees. Our products and services are intended to help you maximize the effectiveness of your Human Resources function.
  • These products and services incorporate our years of experience so that you receive rapid results and exceptional value. From onsite consulting, to strategic business integration, to Web enablement, we understand how Human Resources can be applied to solve your problems and achieve your goals. As a result, we can help you get the most out of your investment and turn your most precious resource into a competitive advantage.
  • We offer Consulting, Retirement Planning, Pension and 401(K) both qualified and non qualified Plans, Welfare Plans, Communications, Computer Systems, Executive Plans, Compensation, Mergers, Acquisitions, Divestitures and Other Services. 
  • We offer a true and honest, Client Partnership.
Our staff and firm are proud members
of the following professional organizations: 

Society of Actuaries

American Society of Pension Professionals & Actuaries

Society for Human Resource Management
(Sussex-Warren NJ Chapter)
GAPS (Global Association Pension Services)


 American Management Association
National Federation of Independent Business

Better Business Bureau
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