In March 2020, I posted a blog reviewing the evolution of the legal analysis applied to a retirement plan’s holding of “employer securities” under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). See “If Your Retirement Plan Holds Employer Securities, Keep an Eye on the Jander Case.” In that blog, I reviewed the “Moench presumption” and the Supreme Court’s rejection of the “Moench presumption” in Fifth Third Bancorp v. Dudenhoeffer, 134 S.C. 2459 (2014).
In Dudenhoeffer, the Supreme Court announced a three-factor standard for ...
The SECURE Act of 2019 made three statutory changes to ERISA regarding lifetime income benefit payments from defined contribution plans (e.g., 401(k), 403(b), profit sharing, and money purchase pension plans). This blog will cover one of those changes – an amendment to Section 105 of ERISA. Section 105 requires the plan administrator to issue periodic benefit statements to participants and requires the disclosure of certain information on those statements, such as the participant’s account balance, vesting, and the value of each investment in the account. The SECURE Act ...
The U.S. Department of Labor (the “DOL”) recently released an information letter that concludes, if certain conditions are met, a plan fiduciary will not violate his fiduciary duties under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) by offering a “professionally managed asset allocation fund with a private equity component as a designated investment alternative for an ERISA covered individual account plan.” This information letter (DOL Information Letter to Jon W. Breyfogle, June 3, 2020; hereinafter referred to as the ...
Presently, many human resource departments are scrambling to address issues raised by the passage of the Families First Coronavirus Response Act (the “FFCRA”) and the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act” collectively with the FFCRA hereinafter referred to as the “COVID-19 Legislation”). While many of the provisions of the COVID-19 Legislation are straightforward, the COVID-19 Legislation contains provisions that implicate a number of employee benefit requirements that could get overlooked. This article reviews two disclosure ...
Most blog entries focus on new developments or recent legislation. This one’s a bit different. Its subject matter, fiduciary responsibility, is as old as ERISA itself. In today’s environment of increased litigation risks for plans, it’s critically important to dust off these rules and review these fundamental obligations applicable to all ERISA plan fiduciaries.
ERISA imposes a few specific duties on fiduciaries:
- Loyalty (also called the “exclusive benefit” rule) – the duty to act solely for plan participants and beneficiaries
- Prudence – the obligation to act ...
On April 29, 2019, the United States Department of Labor (the “DOL”) released a policy statement providing transitional relief from the potential adverse consequences arising from a District Court’s vacating portions of the DOL’s regulations on the alternative test of the definition of “employer” for Association Health Plan (“AHP”) purposes.
By way of background, on June 21, 2018, the DOL published regulations which established an alternative test that described in prior DOL guidance as to who can sponsor an ERISA-covered AHP as an “employer” (the ...
On April 23, 2018, the U.S. Department of Labor (the "DOL") released Field Assistance Bulletin No. 2018-01 ("FAB 2018-01") which provides guidance regarding (1) the exercise of shareholder rights and written statements of investment policy (addressed in Interpretation Bulletin 2016-01); and (2) economically targeted investments ("ETIs"; addressed in Interpretation Bulletin 2015-01). I have previously discussed certain issues arising with respect to the exercise of shareholder rights. See my article "DOL Updates Guidance on Proxy Voting by Plan Fiduciaries", January 19 ...
Most health plans subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), include a subrogation clause which requires a participant to reimburse the plan if the participant later recovers money from a third party for injuries (which were treated by medical benefits provided by the health plan). In Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan, No. 14-723, 2016 WL 228344 (January 20, 2016), the United States Supreme Court ruled, that when a participant expends the whole recovery on nontraceable expenditures, the ...