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

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

The Internal Revenue Service has come through on its annual holiday gift of releasing annual cost-of-living adjustments applicable to employee benefit plans. A year-to-year comparison of limitations applicable to benefit plans can be found here: 2022 Annual Limitations Chart

As in prior years, most of the benefit plan limitations have increased. Notably, these increases include

All too often, retirement plan administrators and benefits attorneys encounter situations with missing participants or uncashed checks that result in head scratching and exasperation.  It is difficult to believe that trying to deliver money to someone could produce such frustration, but it happens more than one would think.  In an attempt to alleviate some of these woes and help ensure that participants and their beneficiaries receive the retirement benefits due to them, the Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) came out with three related pieces of guidance on January 12, 2021: (1) a set of Best Practices for Pension Plans (the “Best Practices”), describing steps that plan fiduciaries can take to reduce missing participant issues; (2) Compliance Assistance Release No. 2021-01, outlining the investigative approach that guides the DOL’s regional offices under its Terminated Vested Participants Project; and (3) Field Assistance Bulletin 2021-01, authorizing fiduciaries of terminating defined contribution plans to transfer missing participants’ account balances to the Pension Benefit Guaranty Corporation’s (PBGC) Missing Participants Program as a matter of temporary enforcement policy.  This blog post highlights key points from the Best Practices and focuses on practical tips plan fiduciaries can take away from the DOL guidance.

Continue Reading Key Takeaways From The DOL’s “Best Practices” Missing Participant Guidance

Plan sponsors and fiduciaries may have spent 2020 scrambling to amend their plans and operating procedures to accommodate breaking COVID-19 guidance, but the Department of Labor’s (“DOL”) and federal courts’ wheels continued to turn, churning out decisions and guidance on a variety of ERISA issues—and plan sponsors and fiduciaries should take note. Included in recent DOL guidance are rules for reviewing and selecting retirement plan investments, voting proxies, and distributing retirement plan notices. Meanwhile, various federal appellate court decisions should lead fiduciaries to review summary plan descriptions (“SPDs”) and the inclusion of single-stock fund investment options in defined contribution plan lineups. The following checklist sets out 2020 developments for plan sponsors and fiduciaries to consider in the new year.
Continue Reading 2021 Plan Sponsor/Fiduciary Compliance Checklist

This post has been updated as of March 25, 2021 to reflect changes made under the American Rescue Plan Act of 2021, as further described here.

The Internal Revenue Service (IRS) capped off a busy year with its annual cost-of-living adjustments applicable for 2021.  A year-to-year comparison of limitations applicable to plan sponsors can be found here: 2021 Annual Limitations Chart.

Consistent with prior years, and reflecting general inflation, the IRS increased certain qualified retirement plan limitations.  For example, the contribution limitation for defined contribution plans increased from $57,000 to $58,000 for 2021 (although the contribution limitation for defined benefit plans stayed stagnant).  The annual compensation limit for purposes of Section 401(a)(17) of the Internal Revenue Code (IRC) increased from $285,000 to $290,000 (from $425,000 to $430,000 for certain governmental plans). The IRS did not, however, increase the amount of elective deferrals or catch-up contributions that can be made to defined contribution plans ($19,500 and $6,500, respectively).

Continue Reading IRS Makes Cost-of-Living Adjustments for 2021

On May 21, 2020, the US Department of Labor (DOL) and the Employee Benefits Security Administration (EBSA) issued final regulations expanding the use of electronic disclosures for retirement plans. The regulations provide a new safe harbor that will substantially ease the use of electronic delivery by retirement plan administrators to satisfy the disclosure requirements of Title I of the Employee Retirement Income Security Act of 1974 (ERISA). The new regulations were published in the Federal Register on May 27, 2020, and they take effect on July 27, 2020 (though the DOL will not take enforcement action against a plan administrator that relies on the regulations’ new safe harbor before that date).

Continue Reading The DOL Embraces Wider Use of Electronic Notices for ERISA Disclosures