The Puerto Rico Internal Revenue Code of 2011 (the “PRIRC”) made several changes to the local rules on the establishment, qualification and operation of retirement plans in Puerto Rico, including modifying some of the nondiscrimination testing requirements, imposing new limits on benefits and contributions, increasing the limits on elective deferrals to 401(k) plans, and expanding the income taxation of retirement benefits. On December 10, 2011, the PRIRC was amended to, among other things, address several of the questions and concerns U.S. and international companies operating on the Island and their employee benefits advisors had raised about the new retirement plan rules. In its final form, the PRIRC should greatly facilitate and reduce the cost of operating retirement plans in Puerto Rico, as many of the differences between the local and U.S. plan qualification rules have been eliminated.Also, on December 16, 2011, the Puerto Rico Department of the Treasury (commonly known as “Hacienda”), issued Circular Letter No. 11-10, which establishes new procedures plan sponsors and their service providers will need to follow for obtaining determination letters on the local qualification of retirement plans. Pursuant to Circular Letter No. 11-10, all retirement plans that on or after 2011 have covered participants who are residents of Puerto Rico will have to be (1) amended during 2012 to incorporate the final qualification requirements of the PRIRC, and (2) filed with Hacienda by the first half of 2013 to request a new or updated determination letter. Plans that fail to obtain a determination letter may be subject to adverse Puerto Rico tax consequences.Carlos Gonzalez was the Puerto Rico benefits and compensation practitioner that assisted Hacienda with the evaluation and drafting of the retirement plan provisions of the PRIRC and Circular Letter No. 11-10. He will be discussing both of them in full detail and addressing action items and alternatives companies should consider for properly and efficiently administering the retirement benefits of their Puerto Rico employees. Eugene Holmes and Mr. Gonzalez will also be discussing the Puerto Rico and U.S. income taxation of retirement benefits of Puerto Rico residents, and will identify common Puerto Rico and U.S. tax compliance failures and alternatives for correcting them.Finally, the presentation will address the joint initiative the IRS and Hacienda have had in place since 2006 for auditing qualified retirement plans with Puerto Rico participants. Rolando Cuervo, an IRS revenue agent actively involved with such audits, will provide an overview of this joint initiative, including the profile of the plans been selected for audit, the qualification failures being detected, and the alternatives for avoiding and correcting such failures. The presentation and will allow ample time for questions and answers by registrants.Agenda:I. Final Puerto Rico Rules on Qualified Retirement Plans
This 90-minutes webinar should prove useful for H.R., benefits and compensation, and tax officials of United States and international companies with operations in Puerto Rico, recordkeepers and third party administrators of plans covering Puerto Rico participants, and benefits and compensation practitioners servicing those companies and their service providers.
Upon completion of this webinar, participants will be able to:
Carlos Gonzalez, President, BenefitsPuertoRico.com LLC, San Juan, P.R., Eugene M. Holmes, Senior Counsel, Proskauer Rose LLP, Washington, DC, Rolando Cuervo, IRS Employee Plans Revenue Agent, Plantation, FL and Olympia Diaz, IRS Group Manager