On April 3, 2024, the US Department of Labor (“DOL”) published the final amendment (“Amendment”) to Prohibited Transaction Class Exemption 84-14, otherwise known as the “QPAM Exemption” (“Exemption”).1 The Exemption is commonly relied on by “qualified professional asset managers” (“QPAMs” or “managers”) who meet certain requirements and manage US employee benefit and retirement account assets to avoid violations of the prohibited transaction rules under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and the parallel provisions under the Internal Revenue Code of 1986, as amended.

Continue Reading US Department of Labor Publishes Final Amendment to QPAM Exemption

As recently noted by the US Department of Labor (“DOL”), since the passage of the Employee Retirement Income Security Act of 1974 (“ERISA”), “the retirement plan landscape has changed significantly, with a shift from defined benefit plans (in which decisions regarding investment of plan assets are primarily made by professional asset managers) to defined contribution/individual account plans such as 401(k) plans (in which decisions regarding investment of plan assets are often made by plan participants themselves).”1

Or, in the drama-infused words of Senator Bernie Sanders, “traditional pension plans have become an endangered species, on their way to extinction.”2 

Continue Reading Lifetime Income Products in CITs on the Rise

The Internal Revenue Service (IRS) has released its 2024 cost-of-living adjustments are applicable to employee benefit plans, was released for 2024. A year-to-year comparison of limitations can be found here: 2024 Annual Limitations Chart.

Continue Reading IRS Annual Limits for Benefit Plans: 2024 Cost of Living Adjustments

On October 31, 2023, the US Department of Labor (“DOL”) unveiled a new proposed regulation titled “Retirement Security Rule: Definition of an Investment Advice Fiduciary” (the “2023 Proposed Rule”) and proposed amendments to several prohibited transaction exemptions (“2023 Proposed PTE Amendments”). With these proposals, the DOL aims to expand the criteria for determining who would be an “Investment Advice Fiduciary” for purposes of Section 3(21) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and force many such “Investment Advice Fiduciaries” to comply with Prohibited Transaction Exemption (“PTE”) 2020-02 for fee and affiliated investment conflicts.

The 2023 Proposed Rule, if finalized, would modify the “Five-Part Test” for determining fiduciary status that has been in effect since 1975. In the preamble to the 2023 Proposed Rule, the DOL stated that the Five-Part Test was no longer suited to address the modern landscape of professional investment advice. In particular, the DOL was concerned that the “regular basis” and “mutual understanding” prongs of the Five-Part Test exclude many circumstances in which a fiduciary of an ERISA plan, plan participant or beneficiary, or IRA owner (each, a “Retirement Investor”) may reasonably assume that they were receiving investment advice based on the Retirement Investor’s best interest.

The 2023 Proposed Rule marks the third attempt since 2010 by the DOL to replace the Five-Part Test. The most recent attempt was an updated regulatory definition of Investment Advice Fiduciary issued on April 8, 2016 (the “2016 Fiduciary Rule”), which was vacated in its entirety by the US Court of Appeals for the Fifth Circuit in 2018. The court’s opinion stated that the 2016 Fiduciary Rule had strayed too far from the common-law definition of the term fiduciary, which turns on the existence of a relationship of “trust and confidence” with the client and does not extend to those who merely sell products to their clients.

Continue Reading DOL Releases New Proposed Regulation Regarding Investment Advice Fiduciaries

Since the early days of the COVID-19 pandemic, the country has been under both national emergency and public health emergency orders (the “Emergency Orders”).  Pursuant to these orders, the Departments of Labor, Health and Human Services, and the Treasury (the “Departments”) issued guidance in May 2020 that postponed various deadlines that apply to benefit plans and made other COVID-related changes to health plans while the Emergency Orders are in force (the “Emergency Period”).  After three years, the end has finally come: on January 30, 2023, President Biden announced his intent to end the COVID-19 national emergency and public health emergency effective May 11, 2023, and on Monday, April 10, President Biden signed a congressional resolution immediately ending the national emergency. The ending of the national emergency marks the beginning of the end to several temporary changes to employee benefit plans.

Continue Reading The End of the National Emergency Spells Big Changes for Employers

The IRS has issued proposed regulations on the treatment of forfeitures under defined benefit and defined contribution plans.  The proposed guidance, which would amend Treasury Regulation 1.401-7, synthesizes (and updates the existing regulation to reflect) guidance previously found in Revenue Rulings, an IRS newsletter, and certain changes to the Internal Revenue Code (the “Code”), made during the last 35 years or so.  The proposed regulation would also generally clarify and extend what had been previously understood to be the deadline for “zeroing out” forfeiture accounts under defined contribution plans. 

Continue Reading IRS Issues Proposed Forfeiture Regulations

With more and more retirement plan services moving online, a recent case arising in  the U.S. District Court for the Southern District of New York, Giannini v. Transamerica Retirement Solutions, LLC (“Giannini”),[1] highlights the importance of cybersecurity and anti-fraud considerations for plan fiduciaries and service providers alike. 

In Giannini, the plaintiff was a retirement plan participant who filed suit in a proposed class action against Transamerica Retirement Solutions, a third party administrator/recordkeeper, after the company notified him of a data breach exposing the plaintiff’s personally identifiable information (“PII”). The plaintiff alleged that the breach occurred because unauthorized parties were able to access PII due to a Transamerica system configuration change, which left sensitive information such as social security numbers and retirement fund contribution amounts exposed. The plaintiff also alleged this data breach affected over 11,000 retirement plan beneficiaries and caused spam emails, spam calls, fraudulent credit card and bank account inquiries, and fraudulent purchases made in his name. 

Continue Reading A Cautionary Tale for Plan Fiduciaries and Service Providers: Cybertheft, Fraud, and Potential Liability

Among the many changes to laws governing retirement plans in SECURE 2.0—the long-awaited follow-up to the 2019 SECURE Act that passed as part of the 2023 Consolidated Appropriations Act—is a provision that may benefit sponsors of over-funded pension plans.  Under Section 420 of the Internal Revenue Code (“Code”), as amended by SECURE 2.0, and subject to certain conditions, pension plans that are at least 110% funded may transfer a portion of their assets to cover costs for their retiree medical or life insurance plan.

Continue Reading SECURE 2.0 Facilitates Funding Retiree Medical and Life Insurance Accounts

With just days to go before the new year, President Biden signed the Consolidated Appropriations Act, 2023, into law on December 29, 2022, which includes the SECURE 2.0 Act of 2022 (“SECURE 2.0”). SECURE 2.0 expands on and, in some cases, modifies changes to the laws governing retirement plans brought about by the Setting Every Community Up for Retirement Act of 2019 (the “2019 SECURE Act”). Key provisions of SECURE 2.0 that amend the Employee Retirement Income Security Act (“ERISA”) and Internal Revenue Code (the “Code”) include a mandatory automatic enrollment and escalation feature for new Section 401(k) and 403(b) plans starting in 2025, updated required beginning dates for taking required minimum distributions, an expansion of the Internal Revenue Service (“IRS”) Employee Plans Compliance Resolution System (“EPCRS”), and more “Rothification” of savings opportunities for retirement plan participants. Plan amendments under SECURE 2.0 are generally required by the last day of the first plan year beginning on or after January 1, 2025 for single-employer plans. SECURE 2.0 also directs the Department of Labor (“DOL”) and IRS to issue various new regulations in accordance with its provisions. This blog post summarizes some of the key features of SECURE 2.0.  

Continue Reading SECURE 2.0 – Changes for Retirement Plans

As summarized in our prior post, on November 23, 2021, the Personnel Management Office, the Internal Revenue Service, the Employee Benefits Security Administration, and the Health and Human Services Department issued interim final rules setting forth directives for implementing a new prescription drug reporting mandate under the 2021 Consolidated Appropriations Act (Public Law 116-260). On June 29, 2022, updated submission instructions describing the reporting process were released. The first deadline to comply with the new rules was December 27, 2022. Under that guidance, it was still unclear whether the relevant departments intended to provide general relief for plans and issuers that made good-faith efforts to comply with the new law.


On December 23, 2022, the Departments of Labor, Health and Human Services, and the Treasury issued FAQs addressing this question directly.

Continue Reading A Sigh of Relief: FAQs Confirm Relief for “Good Faith” Effort to Comply with New Prescription Drug Reporting Mandate