DOL Benefit Plan Audit Quality Study Results Generate Concern, Displeasure From Officials

Department of Labor officials expressed their displeasure at the recent results of an employee benefit plan audit study that showed an increase in major deficiencies in those audits in the past 10 years.

High Court Paves Way for 401(k) Litigation, Reverses Trend of Finding Lawsuits Untimely

The U.S. Supreme Court made it easier for 401(k) plan participants to bring lawsuits challenging high-cost investment options added to the plan more than six years before a lawsuit was filed.

Data Breaches Highlight ERISA Legal Peril Attorney Says Plans May Some Day Face

Faced with the possibility of legal actions under an evolving prudence standard and state consumer protection laws, pension plans should be protecting the private data of their participants, attorneys told Bloomberg BNA in recent interviews.

Cadillac Tax, Subsidies Case Loom Large Over ACA and Employers, Practitioners Say

If the Affordable Care Act's 40 percent excise tax on high-cost health plans goes into effect in 2018 as planned, it could have a detrimental impact on health-care benefits, practitioners at a conference said.

New Fiduciary Proposal May Kick IRA Advisers Out of Market, Speaker Says

While a majority of individual retirement accounts aren't subject to the Employee Retirement Income Security Act, there's still a concern that some advisers may flee the business as a result of the Department of Labor's new proposal to redefine the term “fiduciary,” general counsel for the American Retirement Association said.

ERISA Lawyers Mull Same-Sex Marriage Case; Plan Sponsors Hoping for Uniformity, Clarity

As the U.S. Supreme Court mulls the divisive issue of same-sex marriage, at least one group may be hoping only for a decision that reduces administrative red tape: employers that provide benefits to employees across multiple states.

AICPA Developing Auditor, Sponsor Advice Ahead of Critical DOL Study of Audits

Indications are that the Department of Labor's employee benefit plan audit study will bring bad news, so the American Institute of CPAs has been busy bolstering its efforts to strengthen the audit industry, AICPA officials told Bloomberg BNA.

First Circuit Weighs Standard of Review In Suits for Executive Compensation Benefits

In approving a paper company's decision to deny severance benefits to its former chief technology officer, the U.S. Court of Appeals for the First Circuit clarified the standard of review applicable to “top-hat” plans that provide benefits for highly paid executives (Niebauer v. Crane & Co., 2015 BL 113073, 1st Cir., No. 14-2059, 4/21/15).

Fiduciary Proposal Needs Clarity on Advice, Broader Scope in PTEs, Practitioners Say

The Department of Labor's re-proposed conflict-of-interest rules touch upon a broad array of professionals that would be deemed fiduciaries, so the department will need to spend time thinking about how to make the rules less complex and confusing, practitioners told Bloomberg BNA.

Fiduciary Rule Includes Contract Exemption To Address Financial Industry's Concerns

After nearly four years of waiting, the Department of Labor's proposed fiduciary regulatory package is here at last.

EPCRS Changes Make Key Clarifications For Employers, Participants, Practitioners Say

Two recent Internal Revenue Service updates to its correction program, the Employee Plans Compliance Resolution System, ease some burdens on employers discovering costly errors in their plans, practitioners told Bloomberg BNA.

Probing Say-on-Pay's Yes Votes Reveals Company, Investor Concerns, Speakers Say

The success of say-on-pay is an endorsement of the executive pay model at a preponderance of American companies—even the global ones, said Ira T. Kay, managing partner at Pay Governance LLC in New York.

Trust Officer's Advice to Plans Considering Buying Group Annuities: Document Everything

In implementing a policy for prudently selecting and purchasing a group annuity in which to transfer plan obligations, defined benefit plan fiduciaries need to document everything, a trust company official and employee benefits plan lawyer said.

Final Rules Clarify Performance-Based Pay Exception Under Section 162(m)

The Internal Revenue Service issued final regulations (T.D. 9716; RIN 1545-BI65) confirming that stock-based compensation plans must provide a limit on the maximum number of shares for which individual employees may receive options and that only compensation specifically identified in the regulations is available for special transition relief in the case of newly public companies.

Borzi Lays Out Process for Fiduciary Rule; De-Risking Among Issues Council to Study

Although the reproposed fiduciary rule (RIN 1210-AB32) is under review at the Office of Management and Budget, that “is just the beginning of the process,” Phyllis C. Borzi, assistant secretary of labor for the Employee Benefits Security Administration, told the ERISA Advisory Council.

Two States Consider De-Risking Legislation; Insurance Lawmaker Group Adopts Guidelines

As more companies offload their defined benefit pension obligations to insurance companies in multibillion-dollar transactions, legislators in some states are starting to take notice and to consider laws that are aimed at protecting retirees.

Court Weighs Dudenhoeffer in $25M Case Targeting Investment in Lehman Bros. Notes

Bank of New York Mellon Corp. received another blow to its securities lending program on March 16, when a federal judge gave the green light to claims challenging the bank's involvement with now-defunct Lehman Brothers Holding Co. (Teamsters Local 710 Pension Fund v. The Bank of N.Y. Mellon Corp., 2015 BL 70319, N.D. Ill., No. 1:13-cv-01844, 3/16/15).

Obama Administration Issues Final Rules on Limited Wraparound Coverage Under ACA

The Obama administration issued final regulations amending guidance on excepted benefits under the Affordable Care Act to include limited wraparound coverage provided certain requirements are met.

Cadillac Tax Guidance Will Address Variety of Health Plan Structures, Official Says

The Affordable Care Act's excise tax on high-cost health plans is prompting the Internal Revenue Service and Treasury Department to figure out how to fit new health coverage structures into a statute that only provides for self-only and non-self-only coverage, a government official said.

Plans Considering De-Risking Advised on Steps to Protect Participants, Themselves

As defined benefit plan de-risking continues to flourish, with sponsors either buying pension annuities or unloading their liabilities through lump-sum distributions, politicians, retirement experts and attorneys have raised questions about how to ensure that sponsors and participants come out ahead after the pension transfers have been made.

Jackson Lewis Implicated in New Suit Involving ESOP Failure of DirecTV Installer

Employment law firm Jackson Lewis PC and two of its former attorneys are in the cross hairs of a new lawsuit stemming from an allegedly flawed employee stock ownership plan valuation (Sealey v. Johanson, S.D. Miss., No. 3:15-cv-00137-DPJ-FKB, complaint filed 2/27/15).

DOL Working on ESOP Valuations Guidance, Lifetime Income Illustrations, Official Says

The Department of Labor has been focusing on employee stock ownership plan appraisals in its enforcement program, because they have become “a chronic problem,” so much so that the agency can't address all of them that will come up each year, a DOL official said.

Justices Wrangle With Monitoring Duties of 401(k) Fiduciaries During Oral Arguments

When fiduciaries of 401(k) plans periodically monitor the plan's investments, what should they look for—glaring changes in circumstances, or the mere existence of cheaper investment options.

IRS Issues Initial ‘Cadillac' Tax Guidance, Welcomes Comments on Various Topics

The Internal Revenue Service released the first piece of guidance on the ACA's 40 percent excise tax on high-cost health plans set to take effect in 2018 in Notice 2015-16.

Panelists Debate Need for Re-Proposal of Fiduciary Rule at U.S. Chamber Event

The Department of Labor's fiduciary rule is a necessary step to protect retirement savers from making investments that aren't suited to their needs, a law professor said during a panel discussion at the U.S. Chamber of Commerce.

Groups Debate Effects of Plan Fee Litigation in Competing Supreme Court Amicus Briefs

The effect of plan fee litigation on workers' retirement savings has sharply divided various industry groups, which filed competing amicus briefs with the U.S. Supreme Court in an upcoming case involving Section 401(k) plan fees (Tibble v. Edison Int'l, U.S., No. 13-550, arguments scheduled 2/24/15).

Union Plans Need to Look Ahead to ‘Cadillac' Tax Despite Lack of Guidance

Without concrete guidance on the Affordable Care Act's excise tax on high-cost health plans that takes effect in 2018, collectively bargained plans currently undergoing negotiations are flying blind when trying cushion health benefits against it.

Proper Handling of Pension Overpayments Still Unclear Without Guidance, Panelists

Discovering that a plan participant has been overpaid is a common and unpleasant experience for retirement plan administrators, and the proper way to handle the situation isn't always clear, benefits attorneys said during a panel presentation.

DOL Issues Funding Notice Final Rule for Defined Benefit, Insurance Plans

The Department of Labor issued a final rule implementing the annual funding notice requirements for defined benefit pension plans under ERISA Section 101(f), and individual insurance contract plans under tax code Section 412(e)(3).

EEOC Treatment of Wellness Incentives Hurts Employers' Programs, Hearing Witnesses Say

Employers might begin drawing back on using wellness programs if they don't get clarifying regulations on the treatment of financial incentives under the Americans with Disabilities Act from the EEOC, witnesses said at a Senate committee hearing.

Plan Sponsors May Face New Challenges With Same-Sex Marriage Definition, Attorneys Say

Sponsors of retirement and welfare benefit plans governed by federal law face substantial challenges in navigating the quickly changing legal waters surrounding treatment of same-sex married couples after the U.S. Supreme Court's decision in United States v. Windsor, 133 S. Ct. 2675, (U.S. 2013) invalidating a section of the Defense of Marriage Act, according to a panel of experts in a webcast.

Supreme Court Paves Way for Employers To Reduce Union Retiree Health Benefits

Courts weighing whether union retirees have vested lifetime health-care benefits should apply ordinary contract principles, rather than special inferences or presumptions, the U.S. Supreme Court ruled (M&G Polymers USA, LLC v. Tackett, 2015 BL 16721, U.S., No. 13-1010, 1/26/15).

Multiemployer Plan Participants Allege Rehabilitation Plan Violates ERISA and PPA

The Bakery and Confectionery Union and Industry International Pension Fund violated federal benefits law when it adopted a rehabilitation plan which prevents former covered employees from “aging into” vested benefits as previously permitted under the plan, a class of participants in the plan have alleged in a complaint filed in federal district court in New York (Tagliareni v. Bakery &  Confectionary Union &  Indus. Int'l Pension Fund Pension Plan, S.D.N.Y., No. 7:15-cv-00171-UA, complaint filed 1/9/15).

Outlook 2015: Multiemployer, 4062(e) Changes Enacted, And Now It's Time to See How It Shakes Out

Congressional negotiations over a budget bill late last year introduced a landmark change to ERISA on the law's 40th anniversary: To preserve their multiemployer defined benefit plans, trustees and participants can now voluntarily decide whether to reduce benefits instead of waiting for plan insolvency.

GM Wins Pension Benefit Challenge; Split Sixth Circuit Finds No ERISA Plan

A group of retired autoworkers lost their bid for additional pension benefits because the arrangement under which they sought benefits wasn't an ERISA plan, the U.S. Court of Appeals for the Sixth Circuit held in a 2-1 split ruling (Buchanan v. Gen. Motors, LLC, 2015 BL 3173, 6th Cir., No. 13-1664, unpublished 1/7/15).

Obama's MyRAs Meant as Complement To Employer-Sponsored Plans, Official Says

President Barack Obama's proposal for "starter" retirement accounts is meant solely to jump-start savings by workers not currently with access to employer-sponsored retirement plans, a senior Treasury Department official said during a Senate subcommittee hearing.

Panelists: Dudenhoeffer and GreatBanc Pact Provide ESOP Fiduciaries Useful Guidance

Fiduciaries for employee stock ownership plans who want to avoid litigation over the prudence of their actions in either buying or selling employer stock should focus on the fallout from the U.S. Supreme Court's decision in    Fifth Third Bancorp v. Dudenhoeffer , 134 S. Ct. 2459 (U.S. 2014)   and procedures set forth in the Department of Labor's June settlement agreement with GreatBanc Trust Co., according to experts in a video webcast sponsored by the American Law Institute-Continuing Legal Education.

DOL Survey Finds ‘Unacceptable' Rate Of Plan Audit Deficiencies, Official Says

More than a third of all employee benefit plan audits have deficiencies, a rate that is "unacceptable," a Department of Labor official said at a conference of the American Institute of CPAs.

More DOL Guidance on Brokerage Windows Could Cause Problems, Organizations Say

The general consensus among a slew of comment letters on the Department of Labor's request for information on standards for brokerage windows in participant-directed individual account plans is: More guidance isn't necessary.

As Fiduciary Rule Stalls, DOL Advances Amicus Brief Program, Targets Providers

Recent efforts in the courts to treat service providers as fiduciaries aren't a signal that providers should worry for the safety of their nonfiduciary status, but they could be a "warning shot" that the Department of Labor is hungry to expand fiduciary status as it continues to work on crafting its yet-to-be-released fiduciary rule.

EEOC Needs to Coordinate Wellness Guidance With ERISA Agencies, Benefits Attorneys Say

The Equal Employment Opportunity Commission's lawsuit alleging that Honeywell International Inc.'s wellness program violated anti-discrimination laws is a "gross overstep" that should provide a "wake-up call" to President Barack Obama's administration to take a better coordinated approach to developing wellness program guidance for benefits plan sponsors, said benefits attorneys with Groom Law Group Chartered.

Retiree Health Benefit Dispute Draws Multiple Briefs, Including ‘True' Amicus Brief

In a surprising move, Bethesda, Md.-based law firm Goldstein & Russell P.C. has filed an amicus brief with the U.S. Supreme Court in an upcoming retiree benefit case that purports to be solely informational and in support of neither party ( M& G Polymers USA, LLC v. Tackett, U.S., No. 13-1010, arguments scheduled 11/10/14).


New Mortality Tables to Further Drive Interest In Pension Plan De-Risking, Attorney Predicts

A confluence of factors, including newly released mortality tables from the Society of Actuaries, will drive more defined benefit plans to consider pension plan de-risking, a benefits attorney said during a webinar and interview.

IRS Releases Special Rule to Allow Plans To Include Deferred Annuities in TDFs

The Internal Revenue Service added another piece to the lifetime income puzzle by releasing guidance enabling defined contribution plans to offer target date funds that include deferred annuities among their assets.

Employer Stock Plan Fiduciaries Can Take Liability-Shielding Measures, Attorneys Say

Despite killing the fiduciary-friendly presumption of prudence, the U.S. Supreme Court's decision in Fifth Third Bancorp v. Dudenhoeffer , 134 S. Ct. 2459, 58 EBC 1405 (U.S. 2014), erected significant barriers for plaintiffs bringing stock-drop claims, attorneys said in a panel presentation.

Employers Will Need to Pull Multiple Levers To Avoid ACA's Excise Tax, Practitioners Say

Fortune 500 companies such as Wal-Mart Stores Inc., Lowe's Cos. and PepsiCo Inc. have moved to bundled pricing to control costs for their health-care plans-one strategy among many that practitioners say employers can use to avoid the Affordable Care Act's impending excise tax on high-cost plans.



Verizon Wins Challenge to Pension Transfer; Investment Guidelines Need Not Be Disclosed

In a win for Verizon Communications Inc., the U.S. Court of Appeals for the Fifth Circuit held that only formal, governing plan documents must be turned over upon request to participants in employee benefit plans ( Murphy v. Verizon Commc'ns, Inc., 2014 BL 287183, 5th Cir., No. 13-11117, unpublished 10/14/14).

DOL Urged to Deny Credit Suisse Exemption By Members of Congress and Commenters

A proposed individual prohibited transaction exemption that would allow Credit Suisse AG-affiliated qualified professional asset managers to continue to rely on a 1984 PTE despite violation of the conditions of the exemption by the bank has drawn sharp rebuke in a letter from three members of Congress as well as two public comment letters filed with the Department of Labor.

ACA's ‘Cadillac' Excise Tax Will Hit Lower Cost Health Plans, Practitioners Say

The Affordable Care Act's excise tax that starts in 2018 should be called the "Camry" tax-not the "Cadillac" tax-because it is going to affect more than just high-cost plans, a practitioner said at a conference on employee benefits.

Recent IRS Guidance on Roth Rollovers Lifts Long-Standing Ambiguity, Practitioners Say

Recently released IRS guidance on rollovers of after-tax money to Roth individual retirement accounts cleared up ambiguity that had existed for years, practitioners said.

High Court to Address Statute of Limitations For Suits Challenging Retirement Plan Fees

The U.S. Supreme Court announced that it will wade into the world of ERISA plan fee litigation, when it granted review of a case asking whether plan fiduciaries breach their duties by offering higher-cost, retail-class mutual funds when identical lower-cost, institutional-class funds are available ( Tibble v. Edison Int'l, U.S., No. 13-550, cert. granted 10/2/14).

3rd Cir.: John Hancock Not ERISA Fiduciary In Case Alleging Excessive 401(k) Plan Fees

In a move that will have retirement plan service providers breathing sighs of relief, the U.S. Court of Appeals for the Third Circuit ruled that John Hancock Life Insurance Co. isn't an ERISA fiduciary for purposes of a lawsuit accusing it of charging excessive fees to participants in two Section 401(k) plans ( Santomenno v. John Hancock Life Ins. Co., 2014 BL 267210, 3d Cir., No. 13-3467, 9/26/14).

Hybrid Plan Rules Offer Certainty, Open Up Options for Employers, Practitioners Say

Recently released and long-awaited final rules on hybrid defined benefit plans will free up the retirement community to embrace more innovative kinds of retirement plans, but this plan design may take a while to catch on, practitioners told Bloomberg BNA.

IRS Gives Guidance on Rollovers Of After-Tax Amounts to Roth IRAs

The Internal Revenue Service released proposed rules and accompanying guidance that eases the ability of plan participants to transfer after-tax savings from their retirement plans to Roth IRAs.

Long-Awaited Hybrid Plan Rules Issued, Along With Accompanying Transition Relief

The Treasury Department and the IRS issued long-awaited   final regulations (T.D. 9693, RIN 1545-BI16) on hybrid retirement plans, providing guidance regarding certain issues that weren't addressed in the 2010 final rules.

Attorneys Reflect on 40 Years of ERISA's Biggest Court Rulings

For the special report, ERISA @40, Jacklyn Wille of Bloomberg BNA invited attorneys who represent plan participants, plan sponsors and industry groups to reflect on some of the most significant court decisions decided under ERISA over the past 40 years. Each was asked, “How did this case change the landscape of ERISA litigation, plan design or plan administration?”

ERISA's Rich History: A Conversation With Phyllis Borzi

Phyllis C. Borzi, assistant secretary of labor of the Employee Benefits Security Administration, sat down with Kristen Ricaurte Knebel of Bloomberg BNA recently to discuss where ERISA was, how far it has and hasn't come and what might need to be done to bring the law into the future.

ACA's Health Insurer Deduction Limit Saved Taxpayers $72M-Plus in 2013, Report Says

The Affordable Care Act's compensation deduction limit for health-care insurance providers generated at least $72 million in additional public revenue from some of the largest providers in 2013, its first full year of applicability, the Institute for Policy Studies said in a report.

New Guidance on Contraceptive Coverage Strives to Preserve Access, Practitioners Say


 Recent guidance on contraceptive coverage shows that the federal agencies implementing the nation's health-care law are trying to ensure that women still have access to that coverage even if their employer objects to providing it, practitioners said.



Unsettled ‘Church Plan' Definition Contested; Speakers Debate Merits of Both Positions

The definition of a pension or welfare plan as a "church plan" that is exempt from the Employee Retirement Income Security Act is unsettled and ripe for court interpretation, according to panelists at a webinar.

DOL Advocates Using IRA Rollovers To Preserve Funds of Missing Participants

The best method of preserving retirement funds for missing participants is to roll the funds into individual retirement accounts, the Department of Labor said in Field Assistance Bulletin 2014-01.

ERISA @ 40

RSVP Today: ERISA@40 -- Complimentary, CLE-eligible live event Sept. 9

Obstacles Loom for House Legislation On Frozen Retirement Plans, Speaker Says

Recently introduced legislation addressing frozen defined benefit plans could face some obstacles before it has any hope of enactment, an American Benefits Council policy analyst said in a webinar.          

Dudenhoeffer Ruling Benefits Both Sides, Attorneys Who Argued Case Agree

The U.S. Supreme Court's recent decision in Fifth Third Bancorp v. Dudenhoeffer accomplished something rare: It gave both employees and employers a reason to smile.          

Initiative Gathers Section 409A Data For Compliance Check, IRS Official Says

The Internal Revenue Service's current compliance initiative project was created as a formalized audit program to assess compliance with tax code Section 409A, an IRS official said during a Bloomberg BNA webinar.

Overview of U.S. v. Windsor and its Effect on Employee Benefits

The Supreme Court's decision in United States v. Windsor has had a major impact on employee benefits issues affecting same-sex couples.

Recent SCOTUS Benefit Decisions Pose New Questions for Litigation, Panelists Say

Recent decisions from the U.S. Supreme Court this past term have provided new questions for practitioners in employee benefits law, according to panelists at a webinar hosted by the American Bar Association's Joint Committee on Employee Benefits on July 15.

Church Plan Challengers Win 3rd Victory; Magistrate Agrees With Majority Position

A Catholic health-care corporation's pension plan doesn't qualify as a church plan exempt from federal benefits law, a magistrate judge concluded ( Medina v. Catholic Health Initiatives, D. Colo., No. 1:13-cv-01249-REB-KLM, 7/9/14).          

Treasury, IRS Modify Tax Code Rules To Expand Access to Retirement Annuities

The federal government helped broaden the choices for those shopping for lifetime income options in retirement by modifying the required minimum distribution rules for various types of plans in newly released final regulations on qualifying longevity annuity contracts.    

High Court Kills Presumption of Prudence, Gives Some Hope to ESOP Fiduciaries

In a partial win for employees who invest in company stock, a unanimous U.S. Supreme Court ruled that fiduciaries of employee stock ownership plans aren't entitled to a presumption of prudence protecting them from liability for declining share price.

Moench-ing on a Bunch of Presumptions - What's Left After Fifth Third v. Dudenhoeffer?

Dudenhoeffer is yet another case in which the Court rejects years of lower-court precedent with nary a shrug.  We saw this happen in CIGNA v. Amara, where the Court both rejected the notion that an SPD could effectively be a binding plan document, and then held, unlike every circuit court to have previously considered the point, that monetary damages could be available under ERISA in the appropriate case.

Senate Sets Sight on Retiree Benefit Vesting; ERISA Amendments Create New Presumption

In what some may see as an effort to preempt U.S. Supreme Court review of the topic in next year's term, the Senate is considering amendments to federal benefits and labor laws that would make any retiree group health benefits vest upon retirement or the completion of 20 years of service.        

  In what some may see as an effort to preempt U.S. Supreme Court review of the topic in next year's term, the Senate is considering amendments to federal benefits and labor laws that would make any retiree group health benefits vest upon retirement or the completion of 20 years of service.    

ERISA Accounts Useful for Paying Expenses In Plans, but Have Some Risks, Attorneys Say

ERISA budget accounts are useful tools for managing retirement plan expenses, but they come with advantages and risks and therefore require careful monitoring by plan sponsors and record keepers, benefits attorneys told Bloomberg BNA.         

Putting the Shared Responsibility Penalty Puzzle Together

Greta E. Cowart, a shareholder at Winstead P.C., Dallas,  has published the report " Putting the Shared Responsibility Penalty Puzzle Together."

IRAs May Be ‘Hot Button Issue' In DOL's Re-Proposed Fiduciary Rule

The issues to watch when the Department of Labor re-proposes its fiduciary rule involve individual retirement accounts, a practitioner said during an audiocast sponsored by Drinker Biddle & Reath LLP.   

Buyer Beware: Sponsors Should Read Details In Fiduciary Warranties to Dodge ‘Gimmicks'

Employer-sponsored retirement plan fiduciaries should be cautious about signing fiduciary warranties, because some provide far less value than fiduciary insurance and can potentially be a "marketing gimmick," plan advisers and insurers told Bloomberg BNA in a series of interviews.  

MassMutual Is Functional Fiduciary; Ability To Remove Funds Doesn't Confer Status

Mass Mutual Life Insurance Co. is a functional fiduciary of two Section 401(k) plans because of its ability to set its own compensation as a service provider, but not because of its authority to substitute funds from the plans' investment lineups, a federal court concluded.

Internal Controls, Good Communications Key To Reducing Plan Errors, Consultant Says

Retirement plan sponsors need to have internal controls and good communications between all relevant departments to reduce typical problems that would prompt an investigation from the Internal Revenue Service that could lead to disqualifying their plans, a consultant said at the American Institute of CPAs employee benefits conference.    

IRS Will Conduct Section 409A Audits Of Fewer Than 50 Taxpayers, Official Says

Tax code Section 409A audits of selected taxpayers are under way, an Internal Revenue Service official said at a bar association meeting.    

DOL Continues Work on Fiduciary Rules, Guide for Fee Disclosures, Official Says

The Department of Labor is still gathering input and information to develop the highly anticipated reproposed rules that define a "fiduciary," said Phyllis Borzi, assistant secretary for the Department of Labor's Employee Benefits Security Administration.

Pamela Baker of Dentons on Parachute Cap Provisions

Pamela Baker, a partner in the Chicago office of Dentons US LLP, discusses golden parachute cap provisions in employment agreements in a Bloomberg BNA video. Pam discusses how cap and no-cap provisions work, and why parachute provisions with no caps that give employees the right to choose which benefits to forfeit to avoid excise taxes may be better for both employer and employee and avoid Section 409A problems.

IRS Developing PLRs on Lump-Sum Offers, Practitioner Says in Webinar on De-Risking

The Internal Revenue Service is working on additional private letter rulings that cover lump-sum offers to retirees who are receiving pension benefits, a practitioner said during a webinar on such plan de-risking methods.    

Helen H. Morrison of Ernst & Young on new ACA Regulations

Helen H. Morrison, a principal at Ernst & Young LLP, discusses new regulations under the Affordable Care Act in two videos. Part 1 discusses the "pay or play" requirements under Section 4980H.  In Part 2, Helen discusses the new reporting requirements under Sections 6055 and 6066.

Plan Administrators Face Beneficiary Hurdles After IRS Windsor Guidance, Attorneys Say

Retirement plan sponsors should check beneficiary designations for participants' same-sex spouses in light of recent Treasury Department and Internal Revenue Service guidance on the applicability of the U.S. Supreme Court's Windsor decision to retirement plans, if they haven't already done so, benefits attorneys told Bloomberg BNA.  

IRS Windsor Retroactivity Guidance Leaves Questions on ERISA Claims, Practitioners Say

But what about the retroactive application of Windsor to claims for benefits under the Employee Retirement Income Security Act?

Retirement Plans Aren't Required to Apply Windsor Ruling Retroactively, IRS Says

Many plan sponsors and administrators got the news they were looking for on the application of the U.S. Supreme Court's Windsor decision to retirement plans: No retroactive application before the date of the high court ruling itself.


Attorneys Make Predictions on Fee Litigation, Questions of Constitutional Standing

Plan fee litigation, questions of constitutional standing and the fate of the pro-fiduciary presumption of prudence are the big issues currently driving fiduciary litigation under the Employee Retirement Income Security Act, practitioners said during a webcast.

A Possible Alternative to the Moench-ies (Part II)

So we've now had the oral argument before the Supreme Court in the potentially critical Dudenhoeffer case ( Fifth Third Bancorp v. previous hit Dudenhoeffer next hit , U.S., No. 12-751, argued 4/2/14).

Battle Over Presumption of Prudence Heats Up Ahead of High Court Arguments

The question of whether a judge-made presumption of prudence should protect fiduciaries of employer stock plans from liability for declining stock prices will be front and center at the U.S. Supreme Court next week, with the court receiving nine amicus briefs in the months leading up to oral arguments.  

States, Cities Tackle Pension Liabilities; Watch Illinois, Detroit for Lessons

Throughout his first four years in office, Illinois Gov. Pat Quinn (D) gave a consistent stump speech--a pledge to overhaul the worst-funded public sector retirement system in the country.  

Borzi Plays ‘Three Questions' With Critics Of DOL's Expected Fiduciary Rule Re-Proposal

Phyllis C. Borzi, assistant secretary for the Department of Labor's Employee Benefits Security Administration, doesn't have 21 questions for people who doubt whether the agency's expected re-proposed fiduciary regulations are necessary. She has only three.

Speakers Say Liability Can Be Minimized When Giving Participants Investment Advice

Pension plan trustees can offer participants much-needed individual investment advice in their participant-directed accounts without undue fear of liability, speakers said during a conference.

Obama Budget Includes MyRAs, Auto IRAs, Would Limit Retirement Savings Tax Breaks

President Barack Obama's proposed $3.9 trillion fiscal year 2015 budget includes requirements that employers offer individual retirement accounts and provisions that would reduce tax benefits on certain retirement accounts for high-income earners.

Guidance on ACA 90-Day Waiting Periods Issued in Tri-Agency Final, Proposed Rules

Group health plans or health insurance issuers offering group health insurance coverage can't apply a waiting period that exceeds 90 days for individuals to be eligible for benefits coverage under terms of their plans, according to new final regulations under the Affordable Care Act and released jointly by three federal agencies.           

Plan Fee Litigation Burned Hot in 2013, But Some Decisions Baffling, Speakers Say

Plan fee litigation had a big year in 2013, with divisive appellate court decisions affecting standards of judicial review, statutes of limitations and functional fiduciary status that may open the door for increased and novel litigation, employee benefits attorneys said during a conference panel presentation.

EBSA to Focus on Conflict-of-Interest Rule, Prohibited Persons, Audits, Borzi Says

 The civil enforcement efforts of the Department of Labor's Employee Benefits Security Administration achieved nearly $1.7 billion in monetary results during the 2013 fiscal year, Phyllis C. Borzi, assistant secretary of labor for EBSA, told conference attendees at a Feb. 7 presentation.

Lump-Sum Payments Focus of Debate Over De-Risking Strategies, Attorney Says

Plan sponsors' use of lump-sum payments to settle pension obligations for retirees in pay status has emerged as the leading issue in the debate over pension de-risking, an employee benefits attorney said during a recent conference session.

Plan Sponsor De-Risking Likely to Continue Even With Higher Funding, Practitioners Say


The recent upswing in defined benefit plan funding levels might encourage plan sponsors to take some major steps to de-risk their plans.  

Year in Review: 2013 in ERISA Litigation

Several U.S. Supreme Court rulings broke new ground for employee benefits in 2013, and decisions in 2014 are also expected to push these issues into new territory. In addition to its landmark ruling recognizing same-sex marriage under federal law, the U.S. Supreme Court also issued two significant opinions under the Employee Retirement Income Security Act in 2013-one involving contractual limitations periods, and the other involving Section 502(a)(3)'s equitable remedies provision. 

Class-Action Complaint Challenges Fidelity Plan's Revenue-Sharing Arrangement


A recently filed class action complaint alleges that Fidelity Investments committed fiduciary breach and engaged in prohibited transactions with respect to its own profit sharing plan by failing to "recapture" certain revenue-sharing payments made by the plan's mutual fund adviser to the plan's record keeper, both of which are Fidelity entities ( Yeaw v. FMR LLC, D. Mass., No. 1:14-cv-10035, complaint filed 1/7/14).

D.C. Circuit: No Relief for Participant In Underfunded Cash Balance Plan

An attorney challenging the amount of benefits she received from her former law firm's underfunded cash balance plan failed to convince the U.S. Court of Appeals for the D.C. Circuit that a district court erred in rejecting her claims of fiduciary breach and violations of the tax code ( Clark v. Feder Semo &   Bard, P.C., D.C. Cir., No. 12-7092, 1/7/14).        

Under Deferential Review, Second Circuit Again Nixes Xerox's Use of Phantom Account

Xerox Corp.'s use of a phantom account in calculating and offsetting its employees' pension benefits was unreasonable under the terms of the plan and violated the notice requirements of the Employee Retirement Income Security Act, the U.S. Court of Appeals for the Second Circuit ruled ( Frommert v. Conkright, 2d Cir., No. 12-67-cv, 12/23/13).

IRS, DOL, HHS Propose to Expand Types of Excepted Benefits Under ACA

The Departments of Treasury, Labor, and Health and Human Services issued proposed rules ( REG-143172-13 ; RIN 1210-AB60; CMS-9946-P) that would amend the regulations on excepted benefits regarding vision and dental benefits, as well as employee assistance programs.    

IRS Issues Guidance on Application Of Windsor Decision on FSAs, HSAs

Cafeteria plans can permit midyear election changes for plan participants who were legally married to same-sex spouses as of June 26, the date of the U.S. Supreme Court's decision in United States v. Windsor , the Internal Revenue Service said in Notice 2014-1, issued Dec. 16.

Guidance on Frozen Plans, DOMA Out ‘Imminently,' Treasury Official Says

The retirement plan community can expect guidance imminently on issues related to frozen defined benefit plans, a Treasury Department official said during a webcast.         

DOL Lists Fiduciary Re-Proposal, Project On Brokerage Windows on Regulatory Agenda

The Department of Labor's Employee Benefits Security Administration projected that its rule on the redefinition of the term "fiduciary," also known as its conflict-of-interest rule, will be re-proposed in August 2014, and also indicated its intentions to start on a project related to brokerage windows, according to the DOL's fall 2013 regulatory agenda.           

Solicitor General Asks High Court to Strike Pro-Fiduciary Presumption of Prudence

The U.S. Supreme Court should strike down the pro-fiduciary presumption of prudence that some federal courts have used to shield fiduciaries of employer stock plans from liability for declining share value, the U.S. solicitor general said in a brief filed with the high court

Fourth Circuit: No Deferential Review Despite Plan's ‘Satisfactory to Us' Language

Language in a Prudential Insurance Co. of America disability policy requiring claimants to submit proof of disability that is "satisfactory to Prudential" didn't constitute an unambiguous grant of discretionary authority that would entitle Prudential to deferential judicial review of an adverse benefit determination, the U.S. Court of Appeals for the Fourth Circuit ruled.


Treasury Tackling Final Issues Under the ACA, Agency Official Says


The Treasury Department is hammering out final issues with Affordable Care Act compliance, from employer reporting requirements to health insurer fees, and should have some guidance out soon, Treasury's benefits tax counsel said.

IRS Not Out to Trap Employers That Make Plan Adjustments Post-Windsor, Official Says

The Internal Revenue Service and Treasury Department expect to get guidance out to cafeteria plans "very, very soon" on the retroactive application of the Supreme Court's Windsor decision, a Treasury official said.

DOL Guidance on Same-Sex Spouses Mirrors IRS's, but Practitioners See Some Divergence

Department of Labor guidance providing that the terms "spouse" and "marriage" under the Employee Retirement Income Security Act now include same-sex legally married couples was a confirmation of earlier Internal Revenue Service guidance, but some issues remain on the health and welfare plan side that could lead to legal action down the line, practitioners told Bloomberg BNA in a series of interviews.      

HRA Guidance Tied Employers' Hands, Has Some Re-Examining Plans, Attorneys Say

Employers hoping to offer health reimbursement arrangements to employees to give them money to spend on the Affordable Care Act health insurance marketplaces have found their hands tied following guidance issued Sept. 13 by the Internal Revenue Service and the Department of Labor, attorneys said during a session of the Groom Law Group's Employee Benefits Seminar.

High Court Hears Arguments on Accrual Of Limitations Periods in ERISA Plans

In considering the date on which a disability plan's contractual limitations period begins to run, the U.S. Supreme Court justices questioned attorneys on a wide range of issues, including federal law preemption, equitable doctrines, potential harm and the purpose of the Employee Retirement Income Security Act's administrative exhaustion requirement.

DOL Investigators Quiz Plan Sponsors On Training of Fiduciaries, Attorneys Say


The Department of Labor is looking into fiduciary training as part of the agency's investigations into retirement plans, attorneys at Trucker Huss in San Francisco told Bloomberg BNA.The attorneys had taken part in a recent webinar on the basics of retirement plan committees, and later Bloomberg BNA asked them to share some of their real-life experiences relating to fiduciary training under the Employee Retirement Income Security Act.


Should Employers Pay or Play? Podcast by Littler Mendelson Attorneys Steven Friedman and Ilyse Schuman

Podcast (stream or download) by Steven Friedman and Ilyse Schuman: On Oct. 1, the Affordable Care Act marketplaces open for business. Then, starting in 2015, employers have a choice of whether to "pay or play,"-- to provide health care coverage or pay a penalty.

ERISA Advisory Council to Recommend Updated Guidance On Finding Lost, Missing Plan Participants

The Department of Labor's ERISA Advisory Council intends to recommend that the department update current guidance related to locating lost or missing retirement plan participants, based on teleconference discussions held by the panel Sept. 23.

Fiduciary Rule May Not Appear Until Spring, 408(b)(2) Guide Out Soon, Attorneys Say

DOL's fiduciary rule re-proposal may be out as late as spring 2014; Section 408(b)(2) summary/road map proposed rules should be out in late September, or early October.


Guidance Provides Administrative Relief On Spousal Benefit Issues, Practitioners Say

The guidance in Revenue Ruling 2013-17 will trigger major changes in beneficiary status by requiring spousal consent where none was required before, a benefits attorney said concerning a Treasury Department and Internal Revenue Service ruling issued Aug. 29.

Groups Say Lifetime Income Guidance Should Be Flexible, Provide Protections

Any guidance promulgated by the Department of Labor's Employee Benefits Security Administration on lifetime income illustrations should be optional for retirement plans and provide fiduciary...

S.D.N.Y.: Cash Balance Plan Violates ERISA With Service-Based Normal Retirement Age

PricewaterhouseCoopers LLP cannot shake claims by participants in its cash balance plan that the plan's service-based normal retirement age violates the Employee Retirement Income Security Act,...

First Circuit Holds Private Equity Fund Liable for Employer's Withdrawal

Two private equity funds that held a combined 100 percent stake in an employer that withdrew from a multiemployer pension plan can be liable for the employer's withdrawal liability, the U.S....

Pension Advocates Raise Questions About IRS Rulings on Church Plan Status

In the m on ths since the Internal Revenue Service lifted a moratorium in 2011 on issuing private letter rulings on church plan s, IRS has issued at least 13 rulings granting church plan...

DOMA Decision to Have Pervasive Impact on Plan Administration, Practitioners Say

The U.S. Supreme Court decision striking down a key part of the Defense of Marriage Act expanded employee benefit rights and provided administrative relief for employee benefit managers in...

ERISA Advisory Council Roundup

MISSING PARTICIPANTS/LOST PLANS Pension specialists recommended June 4 that the Department of Labor's Employee Benefits Security Administration develop a lost-plan registry to help...

IRS to Focus on Safe Harbor 401(k) Plans, Other Concerns Highlighted in Questionnaire

The Internal Revenue Service has identified an increasing number of small employers that maintain multiple tax-qualified retirement plans, an arrangement that is not a violation of tax code...

FASB Issues Exposure Draft on ESOP Disclosures; Comment Period Open

FASB Accounting Standard Update (ASU) 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs , ...

IRS Makes Employers’ Internal Controls a Priority in Employee Plan Audits

For more than a decade, the Internal Revenue Service has been refining its approach to examining tax-qualified retirement plans, most recently by focusing on internal controls, according to BNA...

Implications of ASU 2011-4 for sponsors of ESOPs

Conservatism. Consistency. Conformity. These are the big “C’s” of financial reporting. But at a recent conference of employee stock ownership plan (ESOP) sponsors and advisors, another “C” joined...

Follow-Up Q&A From EBN Webinar

Here are a few follow-up question from the EBN/Bloomberg BNA webinar titled Behind the Scenes of IRS Employee Plans Enforcement Strategies. To view the archived program, click here . Q: ...

Employers Will Have 'Sufficient Lead Time' to Prepare Systems for 4980H, Official Says

The Treasury Department cannot offer employers a timetable for when proposed employer “shared-responsibility” rules under the Affordable Care Act will be finalized, but employers will have...

FREE WEB SEMINAR: Behind the Scenes of IRS Employee Plans Enforcement Strategies

Bloomberg BNA is sponsoring a free web seminar Feb. 28 at 2 p.m. ET titled Behind the Scenes of IRS Employee Plans Enforcement Strategies. Don’t let an IRS enforcement action lead to harsh...

Proposed Revisions to IRS Circular 230 Set New Standards for 'Reasonable' Practices

Under proposed “reasonableness” standards for Circular 230, employee benefit attorneys who provide written tax advice may not rely on information from benefit plan sponsors if the attorneys know...

Treasury, IRS Seek Input on Coming Guidance on Roth Transfers

Whether and, if so, how to apply vesting rules to in-plan Roth transfers are among questions that a working group will try to answer as the Treasury Department and Internal Revenue Service...

First Circuit Creates Split; Unwritten Risk-of-Relapse Exclusion Unreasonable

The U.S. Court of Appeals for the First Circuit ruled Jan. 17 that a plan administrator abused its discretion by terminating a participant's long-term disability benefits based on the...

Practitioners Say That Revised EPCRS Streamlines Process Has No Big Surprises

The Internal Revenue Service released Dec. 31 the long-awaited revised revenue procedure updating the Employee Plans Compliance Resolution System. The big deal is the new process for...

IBM Moves to Reduce Costs by Changing Timing of 401(k) Match: Are Others Likely to Follow?

IBM's recent announcement that, starting in 2013, it will make matching and automatic nonelective contributions to its employees' Section 401(k) plan accounts only once annually at the end of each...

Benefit Groups Tailor Policy Agendas To Congressional Lame-Duck Session

Retirement benefits are front and center on the policy agendas of employee benefit groups as Congress and President Obama negotiate a deal to solve the nation's fiscal crisis during the final...

Fiduciary Rule Re-Proposal Still 'Months and Months' Away, Borzi Says

Phyllis C. Borzi, assistant secretary of labor for the Employee Benefits Security Administration, said DOL plans to re-propose the fiduciary rule, but the department still has “a lot more work to...

PBGC Provides Some Relief for Plan Sponsors in its Enforcement of ERISA Section 4062(e)

Since ERISA was first enacted in 1974, it has included a provision, Section 4062(e), that generally applies when the cessation of operations at a facility results in separation from employment of...

Hostess Brands Is Latest Case Highlighting Funding Challenges of Multiemployer Plans

Recent efforts by Hostess Brands Inc. to use bankruptcy to discharge withdrawal liabilities totaling nearly $2 billion highlight a persistent and serious problem for multiemployer plans,...

Employer Not Entitled to Restitution of $548K in Overpaid Contributions

An employer is not entitled to restitution of $548,257 it mistakenly overpaid to multiemployer health and pension funds, the U.S. Court of Appeals for the Eighth Circuit ruled Nov. 23 ( ...

The Modern ESOP and Fair Market Value After the End of Tax Cuts

This blog entry is a summary of a white paper prepared for BNA by Keith Butcher, John Kober, and Jason C. Ray and adapted from a BNA Insight. The white paper is available at . ...

Did the PBGC Egregiously Aggregate? - Yes, Says a U.S. District Court

Private-equity and similar funds sometimes invest in portfolio companies that may have significant liabilities under ERISA and the corresponding provisions of the Internal Revenue Code.   A...

De-Risking Focuses on Business Issues; Retirement Security a Concern, Critics Say

After Ford Motor Co. and General Motors Co. announced earlier this year that they would offer some retired and former employees a one-time opportunity to take lump-sum distributions, pension...

MEPs Need to Comply With Toughest Rules When Regulations Overlap, Speaker Says

Multiple employer plans, when facing overlapping requirements from the Department of Labor and the Internal Revenue Service, should comply with the more stringent rules, a speaker said during...

Fifth Circuit Affirms ERISA Preemption Ruling in En Banc Rehearing

Following an en banc review, the U.S. Court of Appeals for the Fifth Circuit Oct. 5 reinstated a 2011 decision in which it held that the Employee Retirement Income Security Act does not...

Court Holds That Wisconsin FMLA Substitution Law Is ERISA-Preempted

The U.S. District Court for the Southern District of Ohio ruled Sept. 28 that the Employee Retirement Income Security Act preempts the Wisconsin Family and Medical Leave Act's (WFMLA)...

Joint Fund Provides No Individual Benefits, Thus Not ERISA-Covered Plan, DOL Says

A fund administered by a joint labor-management board of trustees but providing no benefits to individual participants or beneficiaries is not an employee welfare benefit plan under Section 3(1) of...

Investment Primer for 401(k) Plan Fiduciaries: Understanding the Merits Of Portfolio Diversification in the Context of Participant Disclosure

As Section 401(k) plan fiduciaries take steps to comply with new Labor Department participant disclosure regulations, they need to understand and explain to participants the purpose and merits...

GASB’s New Pensions Brings Weight of Education

Will the new pension accounting standards--to be publicly available in August by the Governmental Accounting Standards Board-- spur a new round of debate as a result of the new accounting measures...

ERISA Advisory Council Roundup: Beneficiary Designation Safe Harbor

Practitioners encouraged the Department of Labor June 14 to adopt a safe harbor standard that offers liability protection to plan fiduciaries with respect to beneficiary determinations. Witnesses...

ERISA Advisory Council Meeting Roundup: Annuities

Witnesses urged the Department of Labor June 13 to facilitate the use of annuities as lifetime income options at an ERISA Advisory Council meeting on examining income replacement for retirees...

ERISA Advisory Council Roundup: Disability Benefits in DC Plans

Witnesses pushed for defined contribution plans to incorporate qualified disability benefits June 12 at an ERISA Advisory Council meeting on the interaction between disability and security in...

DOL Emailing Form 5500 Filers to Raise Awareness About Schedule C

Scott C. Albert, chief of the reporting and compliance division at the Department of Labor's Employee Benefits Security Administration, said recently that DOL is sending emails to Form 5500...

Which employees are considered full-time for purposes of the health care reform employer mandate?

The Internal Revenue Service, Department of Labor, and Department of Health and Human Services have issued a series guidance that summarizes their intended direction in implementing the employer shared responsibility requirement and related Patient Protection and Affordable Care Act requirements.  Most recently, IRS Notice 2012-17 and DOL Technical Release 2012-01 address the PPACA employer shared responsibility requirement, automatic enrollment requirement, and waiting period limitation in a series of "frequently asked" questions and answers.

Summary of Benefit Coverage Rules – The Devil is in the Details

During the February 28, 2012 ALI-ABA Video Broadcast program on Health Plans some representatives from the government provided us with their personal insights on how the Summary of Benefits and Coverage ("SBC") rules and templates should operate. Earlier this week the DoL posted FAQ VIII on its ACA website regarding the SBC that provided additional flexibility for employers.   This is just a highlight of some of the important information learned during such program and from FAQ VIII.


DOL Initiatives: Questions Answered

Editor's Note: Last month, advisory board member Sherwin Kaplan and his colleague at Nixon Peabody, Eric Paley, conducted a webinar titled "Managing and Protecting Your Employee Benefit Plans: New Department of Labor Initiatives."  As part of that webinar, Sherwin and Eric took questions from the audience, but they were unable to get to every question in the time allocated for the program.  Sherwin--a former co-chair of the Bloomberg BNA Pension & Benefits Publications Advisory Board--agreed to answer outstanding questions here on the blog.

Long Forgotten Rapid Trading Fees Rise Again in New Ways

SEC Chairman Mary Schapiro recently announced that the SEC is looking to curb high-frequency trading in stocks, a practice commonly referred to as day trading. The SEC previously attempted to address market timing or rapid trading in mutual funds when it issued amendments to rule 22c-2 in 2006. Rule 22c-2 permitted mutual funds to impose redemption fees for rapid trading or to stop rapid trades. While this rule has been in place for some time, plans may want to consider verifying how the record keepers for their plans and the mutual funds in their participant directed investment account plan are monitoring and complying with the restrictions imposed by the mutual funds and what redemption fees the mutual funds might impose for a violation not stopped by the record keeper or custodian of the funds. 

Welcome to the New Bloomberg BNA Pension & Benefits Blog

This week we officially relaunch the Bloomberg BNA Pension & Benefits Blog. Now on a new platform, the blog is more attractive and easier to use, yet it continues to contain insight, commentary, and analysis from the well-respected Bloomberg BNA Pension & Benefits Advisory Board.


Be Ever Vigilant Regarding 409A and Include 409A Interpretive Provisions!

At the end of 2008 we were all scurrying to be sure we had identified and amended all arrangements that involved 409A deferred compensation. That is more than 3 years ago and we may not currently be as focused on identifying 409A arrangements and issues as we were in 2008.  Yet it is important to consider 409A issues today.

BNA Launches ERISA Litigation Tracker™

Now available: BNA's new ERISA Litigation Tracker™ .  A smart, simple, streamlined resource designed to help practitioners stay on top of key ERISA cases as they are filed and litigated in federal courts.

IRS Compliance Initiatives

The DOL’s recent proposed class exemption for the provision of investment advice has re-ignited the debate over the need for and the role of investment advice in participant directed plans. The proposal would strike a good balance between the need to offer investment advice to plan participants and the importance of participant safeguards.

What does the new accounting standard on 'fair value' mean to ERISA fiduciaries?

The DOL’s recent proposed class exemption for the provision of investment advice has re-ignited the debate over the need for and the role of investment advice in participant directed plans. The proposal would strike a good balance between the need to offer investment advice to plan participants and the importance of participant safeguards.

Greta Cowart Wins 2010 BNA Insights Award

Greta Cowart--a member of the BNA Pension & Benefits Publications Advisory Board--has been selected as a winner of the 2010 BNA Insights Award.

PPACA--A Poison Pill for State Budgets?

For many states, the fastest increasing budget item is Medicaid. In states like Utah, Medicaid in a matter of years will become the largest single budget item, surpassing education which for decades has been the state’s largest expenditure.  Other states are in a similar position. At a recent meeting of the National Governors Association, CNN reported that Governors have proposed spending $15.9 billion more in fiscal 2012 on Medicaid than in fiscal 2011 and at the same time are slashing higher education by $5 billion and K-12 education by $2.5 billion.

New for You Today--the Benefits Practice Resource Center

Today, BNA unveils its new Benefits Practice Resource Center , which takes pension and benefits information services to a new level. The Benefits Practice Resource Center incorporates the superior reference and analysis material found in BNA's well-respected Benefits Practice Center , and adds even more valuable content, including four popular BNA Books, as well as practice-ready checklists, sample plans, and other practice tools.

What Does Amara CIGNA-fy?

Is CIGNA v. Amara ( 50 EBC 2569 ), the recent ERISA case from the U.S. Supreme Court, a major development? Notwithstanding the lack of surprise in the final result, the Court's rationale looks to be extremely important.

New Regulations Likely to Impede Hybrid Plans

The contraction of defined benefit plans over the last 20 or so years has been dramatic and disappointing for those of us who believe that such plans are the best vehicle for providing retirement security. Some of the decline can be based on changes to the economy, the emergence of new companies and the decline of others, global competition, funding and financial reporting volatility, and other macro and micro economic factors.

Recent 7th Circuit Decision for Defined Contribution Plan Fiduciaries to Watch

The U.S. Seventh Circuit Court of Appeals issued its opinion in George v. Kraft Foods Global Inc. earlier this week impacting fiduciaries to defined contribution retirement plans such as 401(k) plans and other defined contribution plans (see 70 PBD, 4/12/11 ).

Nell Hennessy Remembrance

As most of you know by now, we have lost our friend and colleague, Nell Hennessy. Nell finally succumbed to a long illness that she faced with the usual courage, determination and grace that she demonstrated throughout her life.

Cash Value Insurance and Benefit Programs – When Will It Stop?

Professionals and small business owners are often confronted with sales pitches on how they can put away large sums for retirement, get around the nondiscrimination rules and usually get a current deduction for amounts expended.

2010 Pension Relief Legislation Clarified For Multiemployer Plans (Finally)

On June 25, 2010, after more than a year of delay due largely to the legislative gridlock so enjoyed by the last Congress, legislation popularly referred to as the Pension Relief Act of 2010 (HR 3962) was signed into law.

Target Date Funds - What's In a Name?

Many investors lack financial literacy. Others simply do not have (or want) to take the time to manage their accounts. One answer -- target date funds (TDF). Pick your retirement date, and forget it. Someone else will manage the plan for you.

Webinar on DOL's Proposed Change to the Definition of 'Fiduciary' Will be Held Jan. 13

BNA is sponsoring a webinar titled "Changing the Definition: Who is a Fiduciary," to be held Jan. 13, 2011, from 1 - 2:30 p.m ET.

The Revolution Will Not Be Televised: Reading the New DOL Fee Regulation

The existence of a fiduciary duty to disclose information pertinent to plan investments, including employer stock, is again in the news. But the lead has been buried in a regulation that focuses attention on information about fees charged by typical 401(k) plan pooled investments.

Digesting Recent Stock-Drop Analyses - A Possible Alternative to the Moench-ies

With all the cases and articles swirling around the question of when there is a fiduciary duty to stop acquiring or to dispose of employer securities, and the recent oral arguments on the point before the Second Circuit, I'd like to set out a possible analytical framework, as follows:

The Collapse of Employee Retirement Income Security?

If you stand back from the intricate legal and economic details of this year’s events and try to grasp what’s really happening to retirement security over the long run, it’s frightening.

Non-Discrimination in Insured Health Care Plans, No More Executive Health Benefit Plans?

The provision of the PPACA is deceptively simple: "A group health plan (other than a self insured plan) shall satisfy the requirements of section 105(h)(2) of the Internal Revenue Code of 1986 (relating to prohibition on discrimination in favor of highly compensated individuals)." *** "Rules similar [my emphasis] to the rules contained in paragraphs (3),(4) and (8) of section 105(h) of such Code shall apply."

Essential Health Benefits Include . . .

Health reform has many employers stretched to try to meet all of the requirements applicable for the first plan year beginning on or after Sept. 23, 2010. One of the many difficulties faced by employers is determining what constitutes an essential health benefit on which there can be no annual or lifetime dollar limits on the value of benefits.

PPACA's Impact on Claim and Appeal Procedures

PPACA imposes new requirements on both insured and self-insured plans regarding their claim and appeal procedures, including a new requirement for an external appeal. The Departments of Labor, Treasury and HHS jointly issued interim final regulations on July 23 providing guidance on the new requirements (140 PBD, 7/23/10).

DOL Wage and Hour Division Clarifies the Application of FMLA Definition of Son or Daughter to Cover Children of Same Sex Couples (Among Others)

Recently, the Department of Labor’s Wage and Hour Division, responsible for enforcing the FMLA, issued an Administrator’s Interpretation (IA 010-3, June 22, 2010), which clarifies that FMLA leave to care for a child is available to gay and lesbian couples as well as others who may not have biological or legal connection to the child.

The New VEBAs

The VEBA Trust has three separate accounts, each holding assets transferred or to be transferred by one of the respective companies and was, at its inception on January 1, 2010, one of the nation’s largest health care operations.

Hardt Times

The Supreme Court's decision in Hardt v. Reliance Standard should have been a reason to celebrate for participants and their lawyers (99 PBD, 5/25/10). The simple holding, that you don't have to be a prevailing party before a court can exercise its discretion to grant attorney's fees is unexceptionable. Their were no dissents. But the court seemed to be at pains to tie the decision to its facts. The participant was granted benefits by the plan on the remand. Did that matter?

ERISA Attorney Fees: An Unadulterated Rant on Conkright and Hardt

Heart of my Hardt. I love that mel-o-dy.

As Certain as Death: Quotations About Taxes

Jeff Yablon has compiled a wonderful collection of tax quotes for the new edition of As Certain as Death: Quotations About Taxes. I discovered the book from an Alan Sloan column that appeared in the Washington Post. Sloan quotes Mark Iwry, Senior Advisor to the Secretary and Deputy Assistant Secretary (Retirement and Health Policy) at Treasury. Mark is the most quoted living person in the book. Justice Jackson holds the record but I predict that Mark will overtake him in later editions since Justice Jackson is dead and Mark is still alive and saying quotable things.

Career Advice for the New(er) ERISA Lawyer

Each year when Henry Eickelberg of General Dynamics and I finish our course on Employee Benefits in Corporate Transactions at Georgetown, we take our students to my pub, the Irish Channel in DC, and the talk inevitably turns to jobs (or lack thereof) and careers in ERISA. I thought it might be useful to share some of that discussion with the BNA Pension & Benefits readers.

Conkright v. Frommert: The Justices Make Mistakes

"People make mistakes." Hand it to the Chief Justice, he's got an ear for a catch phrase. As BNA summarized the holding: "Employee Retirement Income Security Act plan administrators will not be stripped of deferential review by federal courts when they make a "single honest mistake" in administering and interpreting plans...." ( Conkright v. Frommert, U.S., No. 08-810, 4/21/10).

Employee Benefits in Extremis?

Pensions, alas, on their way out?

The Fiduciary Decision to Choose the ERISA Plan Auditor

Since many ERISA plans are in the process of preparing their audited financials for the 2009 Form 5500, this is a good time to to reflect on the nature and responsibilities that the plan administrator has in connection with the audit process. (As chair of the Audit Subcommittee for the committee that is the plan sponsor and plan administrator of the Goodyear Retiree VEBA, I had to think through these issues for our plan.)

Some Musings on Funding Relief

Congress has been considering extending funding relief to sponsors of defined benefit plans.There has been controversy about the conditions under which a sponsor will be eligible for relief.

Advisable Advice Regulations

Today's decision on the merits by the 9th Circuit in the Golden Gate Restaurant Association v. San Francisco case upholding the employer spending requirements of the San Francisco ordinance as not preempted by ERISA is a most interesting read.

Auto-Pilot Retirement - Ready for Takeoff?

In late October, the Government Accountability Office released a report on auto-pilot retirement practices and proposals. The report reviews data on 401(k) plans that have adopted automatic enrollment, and discusses the Obama administration’s budget proposal to mandate payroll deduction IRAs for firms with ten or more employees that lack other plan coverage.

Thanksgiving Feast or Famine? - DOL Withdraws its Investment-Advice Regulation

The DOL has withdrawn its investment-advice regulation, culminating a process that began with a firestorm of objection regarding the DOL's attempt to implement the PPA's new investment-advice exemptions. The PPA's exemptions were controversial when passed, and became more controversial when the Department interpreted certain fee-leveling requirements in a manner that was perceived to be narrow.

Glass Half Empty or 3/4 Full?

The DOL’s recent proposed class exemption for the provision of investment advice has re-ignited the debate over the need for and the role of investment advice in participant directed plans. The proposal would strike a good balance between the need to offer investment advice to plan participants and the importance of participant safeguards.

Participant's access to information in claims adjudications.

One of the purposes of ERISA was to provide participants with access to information so they could understand their rights and obtain their benefits from their plans.

EEOC Issues Technical Assistance Document Explaining ADEA Waivers to Employees (and Employers)

For those of you who work on the compensation portion of employment agreements or the compensation payout (severance) provisions of employment termination agreements, you should be aware of a recent piece of guidance issued by the EEOC on ADEA waivers in exchange for severance payment agreements.

How to Restart the Pension System By Giving Executives a Stake In It

In 1973, just before ERISA, we worried about individual workers losing their defined benefits because of insufficient funding, no plan termination guarantees, and little or no vesting.  Most of us did not worry about the whole system falling apart.   There were just too many disappointed expectations under the previous system.

A Modest Proposal Regarding Same-Sex Marriage

It is not being controversial to say that there is a trend in the states in favor of permitting same-sex marriage.  Previously, a broad array of employers had begun provide benefits for their employees' domestic partners.  See generally Libert, Oringer & Raskin, "Same-Sex Marriage and Employee Benefits: The Approaching Revolution," 63 Empl. Ben. Plan Rev. 22.

Are Certain Reactions to the Investment-Advice Regulations Ill-Advised?

On January 16, 2009, the Department of Labor announced that it had finalized its work under Sections 408(b)(14) and 408(g) of ERISA, which set forth the PPA's new investment-advice exemptions.

Automakers' Insolvency Opens All the Benefit Cutback Targets and Problems

The insolvency (whether or not in Chapter 11 reorganization) of the three automakers brings “legacy costs” back to the center stage of ERISA cutback negotiation and litigation.

Election and Retirement Security

The election is now only days away and will occur within the context of a financial markets meltdown. The effect on retirement security has been significant. Public policy considerations must be addressed asap.

Investment Advice—ERISA’s Culture War

The DOL’s recent proposed class exemption for the provision of investment advice has re-ignited the debate over the need for and the role of investment advice in participant directed plans. The proposal would strike a good balance between the need to offer investment advice to plan participants and the importance of participant safeguards.

9th Circuit Holds San Francisco Ordinance Not Preempted: Is There a Conflict in the Circuits?

Today's decision on the merits by the 9th Circuit in the Golden Gate Restaurant Association v. San Francisco case upholding the employer spending requirements of the San Francisco ordinance as not preempted by ERISA is a most interesting read.

Reviewing the Scope of Section 409A Transition

Full compliance with Section 409A is scheduled to be required in less than four months, by January 1, 2009. This deadline is the result of the considered and responsive review by personnel from Treasury, the IRS and the legislative branch last year, as 2007 ran its course.

Looking Back, Looking Forward

While December is when most of us look back on the year coming to end and make plans and resolutions for the year about to begin, September is another one of those times for me. After all, it’s an important month in its own right—the start of the academic year (even if classes now begin in August), the official beginning of the race in election years like this one, the unofficial end of summer with Labor Day and lest we forget, the anniversary of ERISA’s passage.

Good Planning or Pension Manipulation?

A front page article in the August 4th edition of the Wall Street Journal outlines a method by which companies are transferring portions of their non-qualified deferred compensation obligations of senior executives into their qualified plans.

A Report on Yet Another Reporting Issue for Private Equity and Other Investment Funds

Section 404(a)(1) of ERISA generally requires a fiduciary to act in the interest of participants and beneficiaries and to act prudently. ERISA also requires, under Section 103(b)(3)(A), an annual report which includes a financial statement containing, among other things, a statement of assets and liabilities "valued at their current value." Current value is to be determined in good faith by a trustee or named fiduciary.

Recent Standing Case Promotes Confusion

The U.S. Supreme Court in LaRue , albeit in a footnote, endorsed the holding that participants who cashed out of defined benefit plans did not lose standing to assert claims under section 502(a)(2) for losses to their plans that diminished the amount in their accounts at the time they cashed out.

Audioconference on Section 409A Proposed Income Inclusion Regulations Set for Sept. 16

On Sept. 16, BNA will host an audioconference with Greta E. Cowart, of Haynes and Boone; Pamela Baker, of Sonnenschein, Nath & Rosenthal; William C. Schmidt, of IRS (invited); and Helen H. Morrison, of Treasury (invited), titled "Section 409A Proposed Income Inclusion Regulations--Revealing the Real Sting of 409A."

Interim Amendments for Tax Qualified Plans -- A Mixed Bag

Beginning in the late 1990s, the IRS Employee Plans group spent a great deal of time studying various options for avoiding the enormous workload spikes that arose during the determination letter process in the past and developing the settled upon option -- the staggered remedial amendment period (RAP). As part of this process, IRS EP personnel made a real effort to "partner" with the various stakeholders in the benefits community (ranging from benefits practitioners to prototype sponsors and vendors) to develop a workable, manageable program for all.

How Far Does a Pension Plan Have to Go to Persuade Participants to Make the Decisions that Are Right for Them Individually?

Today's (7/30/2008) Pension & Benefits Daily issue reports on the litigation following the sad death of Mr. Allen Anderson, a hard-working man who died of cancer, Anderson v. Board of Trustees of the Northwest Ohio United Food and Commercial Workers Union and Employers' Joint Pension Fund, N.D. Ohio, No. 3:07 CV 576, 7/28/08.

Another Piece of the Extended Puzzle - Proposed DOL Regulations Reach to General Prudence Rules

Issues relating to fees to service providers have become high-profile issues, with a proliferation of indirect-fee class actions and the inevitable follow-on press reports.

Social Investing Revisited?

There appears to be a continuing debate, with the Department of Labor's involvement, between the AFL-CIO and the U.S. Chamber of Commerce concerning use of plan assets in proxy voting and shareholder related activities as well as in connection with union organizing campaigns and union goals in collective bargaining negotiations.

Now the DOL is FAQuing It - Having Fun with ''Funds'' on the Form 5500

Issues relating to fees to service providers have become high-profile issues, with a proliferation of indirect-fee class actions and the inevitable follow-on press reports.

What's a DB Plan Administrator/Advisor to Do

Administrators of defined benefit plans and other professionals dealing with them have had a real problem on their hands this year.   2008 is now half over and a significant amount of clear, final guidance on how the Pension Protection Act applies to plans has not been issued.

Some Additional Reflections on MetLife

Way back in 1989, in the Bruch v. Firestone decision, the Supreme Court told us that a plan decision-maker's rejection of a benefit application would be subject to de novo judicial review . . . unless the plan included magic words vesting the decision-maker with DISCRETION.

Is it time to require all employers to provide health care for their employees?

Having just returned from a conference at Oxford University in England where we were discussing the effect of pension and health liabilities on global competitiveness, I have been thinking about the question of how our current voluntary benefits system affects intra-business competitiveness within the US, an often overlooked aspect of the problem

Distinguishing among Employees Based on Pension Status

The US Supreme Court's decision in Metropolitan Life Ins. Co. v. Glenn (6/19/2008) is commanding a lot of attention from ERISA practitioners.   I suspect that is because the decision is expected to shift the odds in contests over disability claims, which provide a lot of grist for ERISA litigation and now are likely to yield richer settlements. For those of us who focus on retirement plan design and benefit policy , Kentucky Retirement Systems v. EEOC, also handed down on 6/19/2008, is the more interesting decision. The headline: it is legal for employers to discriminate against employees based on their eligibility for a pension.

A New Firestone Drill: MetLife v. Glenn

Hopefully, the Supreme Court's MetLife decision will turn out to be a welcome clarification of the Firestone case, even if it generates some new uncertainty. Firestone left open the question of how much a conflict of interest in the administrator should affect the level of a court's deference to the administrator's decision.

Amschwand? Or am not Schwand?

In Amschwand v Spherion Corp. , 505 F.3d 342, 41 EBC 2697 (5th Cir. 2007), Mr. A was on medical leave for terminal cancer and still covered by Spherion's life insurance plan.

The Trouble With Estoppel in ERISA Cases

Every now and then an estoppel case pops up under ERISA, and the law is twisted and mangled to make it fit.   See, e.g., Livick v. The Gillette Co., U.S. App. Lexis 8261, 43 E.B.C. 2025 (1st Cir. 2008) (dictum), citing Hooven v. Exxon Mobil Corp., 465 F.3d 566, 578 (3d Cir. 2006); Mello v. Sara Lee Corp., 431 F.3d 440, 444 (5th Cir. 2005); Devlin v. Empire Blue Cross & Blue Shield, 274 F.3d 76, 85-86 (2d Cir.2001); Sprague v. General Motors Corp., 133 F.3d 388, 403 & n.13 (6th Cir. 1998) (en banc); Greany v. W. Farm Bureau Life Ins. Co., 973 F.2d 812, 821 (9th Cir. 1992); Kane v. Aetna Life Ins., 893 F.2d 1283, 1285 (11th Cir. 1990).

Health Care - Is Anyone Asking the Hardest Question?

In a matter of a few days, here are some headlines from the Pension & Benefits Reporter: "Report Says Health Costs Hurt U.S. Firms, Advocates End of Employer Financing System"; "CRS Says Price Transparency May Drive Down Costs"; "Reform Efforts Should Combine Options in Public, Private Sector, Health Group Says"; "Democrats Pounce on GAO Study Finding Taxpayers with HSAs Have Higher Incomes"; "Measure of Family Medical Spending Has Lowest Increase in Past Five Years" and the list goes on and on.

Common Errors in Qualified Plans: It's Time for Spring Cleaning!

I have come to realize that "As time marches on" -- so do the errors in our client's retirement plans. So, with "spring cleaning" in the air, I decided to clean out the garage of plan errors and list, in no particular order, some of the errors that have occurred over the past year. The type of error might not be new -- but the resulting consequences clearly explain the often used phrase -- "No Good Deed Goes Unpunished."

Are we Professionals Ruining Defined Contribution Plans?

Even though defined benefit plans will not disappear completely, there is little doubt, at least in the private sector, that those employers who have the option are abandoning those plans in favor of defined contribution plans.


Trying to be somewhat current and topical, with a vote scheduled this week in the House Education and Labor Committee on Rep. Miller's 401(k) Fair Disclosure for Retirement Security Act bill (HR 3185) and the DOL moving forward with proposed rules addressing these issues, I just wonder what the ultimate impact will be at the participant level.

The Interaction of LaRue, Bruch, and MetLife v. Glenn

The Supreme Court seems to have an increasing interest in addressing some of the long-standing remedial and procedural issues under ERISA.

ERISA Preemption

The house passed its version of ERISA in the fall of 1973. The Senate approved its version in February of 1974. There were many differences to be reconciled by the Conference, which got underway in April of that year. One of them, however, was not the preemption of state law rule, which was the same in both bills. It provided for "subject matter" preemption. States were precluded from legislating with respect to matters addressed in ERISA.

Should We Rue LaRue?

Last month the Supreme Court resolved, at least for one case, this question: Do individual employees have a cause of action when a fiduciary violates its responsibilities with respect to the assets in an individual’s defined contribution account?

Preparing for the Code section 409A Compliance Deadline

The extension for amending plans for compliance with Code section 409A and the final regulations thereunder under Notice 2007-86 does not mean that companies or individuals should wait to address these issues until later this year.

PBGC Returns to a Diversified Portfolio

When PBGC takes over a terminated plan, it becomes the trustee and may invest the assets of the plan in the full range of investments available to other ERISA plan trustees.

BNA Sponsors Conference on 401(k) Plan Fiduciary Compliance

On April 23, 2008, BNA will present a conference on "401(k) Plan Fiduciary Compliance: What Plan Sponsors Need to Know," at the Ritz Carlton Pentagon City in Arlington, Virginia.

BNA Sponsors Conference on Cutting-Edge ERISA Litigation Issues

On Nov. 29, 2007, BNA will present a one-day conference in Washington, D.C., on ERISA litigation.

A New Retirement Security Proposal Meets With a Yawn?

Several weeks ago, the ERISA Industry Committee (ERIC) published a new proposal for retirement savings in the United States billed as a "New Benefit Platform for Life Security."

Deere 401(k) Fee Disclosure Case Dismissed

As expected, the 401(k) fee disclosure case against Deere & Company was the first to be decided, since the District Court for the Western District of Wisconsin has a reputation as a "rocket docket."

Reading the Supreme Court Tea Leaves

Litigation brings home how fragile our common understanding of ERISA can be. Until the 9th Circuit decided Beck v. PACE International Union, 427 F. 3d 668, 673 (2005), practitioners understood that the only ways to distribute participants' benefits under a terminating defined benefit plan were annuities or lump sums. Unfortunately, the 9th Circuit didn't find it so clear.

Would You Buy an Annuity for Your Mother?

Much has been made of the fact that employers are increasingly turning to 401(k) plans rather than defined benefit plans. Employers are implementing a number of strategies to help employees achieve retirement security in this brave new world.

On Patenting Tax Advice - A Lesson From Pythagoras

The flap over patenting tax advice reminds me of something I learned long ago about the lessons of Pythagoras and Pythagoreans ages ago - some 500 years B.C. to be precise (and Pythagoreans were supposed to be, if anything, precise).

Patenting Employee Benefits Advice

Patenting employee benefits strategies or computer systems has been occurring since 1988 when an improved system for enrolling employees into pension benefits was granted a patent.

The Intersection of Federal and State Health Care Reforms

Massachusetts enacted its health reform requiring individuals to purchase health insurance or benefits under a plan that meets certain minimum standards in order for the individual to avoid a tax on the uninsured.

Are We Really Going to Patent Pension Advice?

It has been suggested that tax advice and retirement planning ideas are patentable.

The Future of Health Care

I read the other day that 20% of the income of a typical medical office is spent on insurance claims administration. Then there's the insurance company cost of administering the claims, plus the cost of the darned ERISA lawyer who brings those class actions.  A billion here, a billion there, pretty soon it starts to add up (Thanks Ev Dirkson).

So What Else Is New In DC?

In journalism theory, the headline is a literary genre unto itself. It's supposed to capsulize what follows it so that the reader's own unassisted, low-tech browser linking eyes and brain can discern in a flash whether he or she has an interest in reading more.

Local Option in Texas: The Great GASB

Any time a legislative body as large as that of the Texas House of Representatives passes a bill of greater import than the designation of a state flower (e.g., Yellow Rose) or nut (e.g., Pecan) by a unanimous vote (i.e., 140-0), you sense that something odd may be afoot.

Insuring the employee’s risk

The benefit gambit currently in vogue is a new kind of risk-transfer.  Instead of having the employer assume the employee’s long term risk (by defined benefit pensions, and by comprehensive health benefits), the name of the game now seems to be: transfer the risk to the employee.

Real Retirement Security – What Would it Look Like?

The massive PPA-2006 did a little to protect the security of one government agency.  But PPA  did almost nothing to protect the retirement security of those who need it the most.

Fees for what?

There has been a lot of conversation about the fees paid by retirement plans. Most of that attention has been paid to the level of the fees.  The implication seems to be that a high fee is bad and a low fee is good.

Attack of the Killer Accountants

Regular tax season is coming to a close and the season for auditors to turn to benefit plan audit work is nearly upon us.  That made me think of some of the problems we encountered last year and the fact that advance knowledge and enlisting the assistance of the legal community might be helpful.

Closing the loop on Uncertain Tax Positions

Since many readers of this blog work within the benefits department of a company, are consultants or attorneys, they may not follow financial reporting standards that are not aimed specifically at compensation or benefit considerations.

Another Accounting Standard Impact Benefit Plan Advisors

We started this discussion in explaining that FIN 48 related to uncertainties in income taxes.   So the obvious question is:   Why worry about a tax-exempt benefit plan?

Continuing on FIN 48

This discussion is based on the prior discussion of new FASB Interpretation 48 - Accounting for Uncertainty in Income Taxes.

Another Accounting Standard Impact Benefit Plan Advisors(2)

As if there isn't enough change going on - revised SEC disclosures, potentially 400 pages of "final" 409A regulations, revised accounting standards for equity compensation, proposed legislation limiting the amounts of deferred compensation, ad nauseum. Benefit's advisors must also deal with subtle and unexpected changes, like "FIN 48."

401(k) Fee Disclosure

As 401(k) plans become the major source of retirement savings,  Congress, GAO, DOL and the SEC are all turning their attention to the issue of 401(k) fees.

PPA Relief?

Not being a Washington type, I am not privy to who is lobbying for what provision in proposed legislation. After wading through the new prohibited transaction exemption which was added by the Pension Protection Act, now found in ERISA section 408(b)(14) and limited by the terms of section 408(g), I wondered who lobbied for this and how useful will it be?

State Based Health Care Reform-Getting Out from Under Preemption

In January the Fourth Circuit decided RILA v. Fielder, 39 EBCases 2217, 2007 U.S. App. LEXIS 920 (4th Cir. 2007) holding, in a split decision, that Maryland's law requiring certain large employers (most notably Wal-Mart) to spend 8% of payroll on healthcare for their employees or pay the difference to the state to defray the cost of Medicaid.

EDS--The End of Fiduciary Responsibiilty

Since the DOL issued its 404(c) regulation in 1992, it has been generally understood that section 404(c) did not relieve fiduciaries from liability for limiting or designating investment options in a 404(c) plan.  This view was contained in the preeamble to the regulation as a gloss on regulatory language limiting 404(c)s relief to losses which are "the direct and necessary result of that participant's or beneficiary's exercise of control."  29 C.F.R. sec. 2550.404c-1(d)(2)(1).

Default Investments

In the PPA, Congress endorsed (and well it should have) automatic enrollment 401(k) plans by adopting legislation to make it easier for employers to sponsor such plans.

U.S. Health Care Costs

In today’s WSJ, Justin Lahart observes that the United States spends a much larger portion of its GDP on health care than other countries, yet seems to get little for its extra spending.

Top Cats in Top Hats

Mostly, but not entirely, exempts from its provisions unfunded plans “maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees.” In the informal taxonomy of employee benefits speak, these plans carry the label “top-hat” plans.

Health Care’s Game of “Let’s Pretend” – Rearranging Deck Chairs on the Titanic?

2007 01 24  Health Care’s Game of “Let’s Pretend” – Rearranging Deck Chairs on the Titanic? The game of health care consensus and “let’s pretend” continues

BNA Sponsors Conference on Pension Plans and Executive Compensation

On March 21-22, 2007, BNA will present a conference on pension issues and executive compensation.  "ReDesigning Pension Plans and Executive Compensation: New Rules, New Opportunities," will be held in Washington, D.C., and will feature eight top officials from Treasury, DOL, and the SEC.

Whither ''Consumer-Directed Health Plans?''

People who purchase their own individual health insurance may be particularly interested in less expensive high deductible plans paired with a tax-advantaged health savings account (HSA).

States take the lead in health care access initiatives

Faced with growing numbers of uninsured, rising Medicaid costs, and no likelihood of timely federal leadership, states have -- again -- taken the lead in expanding health coverage.

New Initiatives Regarding Pension Plan Freezes

The DB system continues to contract.  With new FASB disclosure rules and greater funding volatility under PPA, additional DB plan freezes can be anticipated.  Last year a number of healthy major companies announced plan freezes.

An Alternative to ''Employee'' Benefit Plans

ERISA has served American workers relatively well over the past 30 plus years.  Millions of employees have achieved relative retirement security with significant pension and retiree health benefits.

More Mandated Benefits? Stop! Think!

ERISA regulates and mandates a system that is, above everything else, voluntary.  In my view, mandates have no place in it, not because they are not good objectives, but because they are not voluntary, not free, and inevitably counter-productive.

A New Year’s Wish: Why Not Try More Beneficial Benefit Planning?

As the mountain of new-year, new-law, alerts and warnings mounts, wouldn’t it be nice if sponsors and their advisors paid a little more attention to the beneficial purposes of a benefit plan?

Section 420 Transfers by Multiemployer Plans

A little-noted feature of the Pension Protection Act is its provision extending to multiemployer pension plans the opportunity to transfer "excess" assets to fund retiree health benefits.  Until now, only single employer pension plan sponsors were permitted to make such transfers.

Participant Diversification Requirement

Employers are being inundated with a press of new guidance issued by government agencies on many new employee benefit requirements with which the failure to comply can result in some fairly stiff penalties.

Audioconference on CD&A Set for Dec. 14

On Dec. 14, BNA will host an audioconference with J. Mark Poerio, partner, Paul Hastings Janofsky & Walker; David G. Johnson, national practice leader-Compensation Strategy & Design, at Ernst & Young; and Richard L. Alpern, a principal at Frederic W. Cook & Co., titled "Getting Started With Writing the 2007 CD&A."

The Defined Benefit Plan System: What Does the Future Hold?

In the year 2005 we saw a national debate on the nation's most important defined benefit plan, Social Security. The nation overwhelmingly expressed its sentiment that the system of work-related, guaranteed lifetime benefits provided the security that people wanted for themselves, members of their family, and the nation as a whole.

Fee Disclosure

ERISA fiduciary litigation isn't calming down, it is just switching subjects.  As the stock drop cases  wind down, they will be replaced (in fact, are already being replaced) by hidden or excessive fee cases.

Pension Protection Act Redux?

With the dust clearing on the recent mid-term elections, we thought it might be beneficial to speculate on what, if any, effects the Democratic takeover of Congress might have on the recently enacted Pension Protection Act.

New Proxy Pension Benefits Table

Many public companies are now drafting their proxies and dealing with the new proxy disclosure rules.  One of the tables for many companies is the Pension Benefits Table.

Election Impact?

I'm still yawning from staying up late (for a school night) to see what happened, how The American People made their views known to the governing class. There are any number of levels to the question, what will be the impact "on us" of the transfer of power. "Us" includes, of course, all of us as citizens -- will the election outcome hasten the day that we stop precipitating and experiencing deaths and mutilations in Iraq?

Oh yes, oversight ...

How could I overlook the possible impact of the shift in power in the Congress on Congressional oversight mission, and, in turn, the possible impact of Congressional oversight on the world of employee benefits?  If nothing else, we're less likely to see a resurrection of the Department of Energy's announcement that it would not reimburse contractors for defined benefit plan costs, or for the cost of more than a minimal health coverage package.


To me, an ERISACRAT is someone who takes the concept of the law very seriously, to work towards Employee Retirement Income Security.

A Change in Perspective

This posting comes in from a different perspective - that of the benefit plan auditor.  Since the reporting season for the calendar 2005 plan year is pretty much over, I thought it might be valuable to go over some of the problems that cropped up this year on such audits

PPA Issue

Much has been written and discussed as to what steps should be taken to avoid or minimize potential exposure to the issues and many plan sponsors have made changes to their plans and/or committee structures.   But before they can catch their breath, along comes the new kid on the block-the Pension Protection Act of 2006.

Is Anyone Left Standing?

Today the Ninth Circuit decided Glanton v. AdvancePCS  Inc.

Abuse of Discretion Standard of Review

Is The "Abuse of Discretion" Standard of Review Worth the Candle?

String Theory of Healthcare - The Solution to Everything.

a. There should be National Health Insurance to cover basic insurance for everyone; employed, unemployed, uninsured and people like me.

b. Employers may also provide "wrap around" policies in addition to the Basic policy.

Some Random Reflections on the PPA and Cash Balance Plans

The PPA has some interesting cash balance provisions, including a prohibition on cash balance plans whose interest credits exceed market rates of return.   The reason for this prohibition is clear enough: if an interest credit is higher than investment returns available in the market, the interest rate will favor younger plan participants, since they will have the benefit of the above-market rate for a longer period of time than older plan participants.


Dana Muir, a professor at University of Michigan's business school, has co-authored an interesting article on the use of the efficient market hypothesis in two areas, one of which relates to ERISA retirement plans that hold employer stock.

Hedge Funds and Plan Asset Regulations

The ERISA Advisory Counsel has devoted one of its study projects this year to issues surrounding the prohibited transaction rules and hedge funds (and also cross-trading).

Denial of States

While I wasn't paying much attention, on July 19 the U.S. Supreme Court entered a short order, without opinion, denying Texas and several other would-be co-plaintiff states leave to file a complaint challenging the constitutionality of part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). Texas v. Leavitt , No. 135 Orig. (U.S.) (15 HLR 735, 6/22/06). The part of the MMA under attack is embedded in the program familiar to even the lay public, and more so to the elderly, as Part D of Medicare.

A Turning Point for Labor?

Since the signing of the Pension Protection Act, the aura of pessimism that continues to hang over the future of private-sector DB plans has been relieved in many quarters by bullish excitement over the potential that the DC plan provisions of the PPA may hold in store for the American workforce -- particularly for the majority of working Americans who are unprotected by any income floor in retirement other than Social Security.

Prohibited Transactions and IRAs

While DOL generally does not have jurisdiction over IRAs, it does have regulatory authority to determine whether a prohibited transaction exists in connection with an IRA. Given the fact that a prohibited transaction may disqualify the entire IRA, a cautious approach with IRA investments in the IRA owner’s business is warranted.

PPA Health Plan Relief

One of the more obscure provisions of the Pension Protection Act is Section 843, which amends IRC §419A(c) by adding new subsection (6). The new provision permits a health benefit plan sponsored by a “bona fide association” (as defined in 42 U.S.C. 300gg-91(d)(3)) to maintain a reserve of up to 35% of current operating costs. Prior to the amendment no reserve was permitted.

DOL and Service Provider Fee Disclosure

 On May 16, 2005, the SEC issued a Staff Report Concerning Examinations of Select Pension Consultants. In connection with the SEC report, on June 1, 2005,  DOL and the SEC jointly released tips to help ERISA plan fiduciaries in selecting and monitoring fiduciaries.

Benefits Related Blogs

I thought you might be interested in other benefits-related blogs. I'm sure I've missed some, so if you know of other benefits-related blogs, please add it through a comment.

SEC Mutual Fund Settlements

Beginning in 2003, the SEC and state officials brought enforcement actions for improper trading practices involving mutual funds.

ERISA Hotties

We wanted to start the BNA Pension and Benefits Blog with something a little light hearted that you might not see in the regular BNA publications.

PPA Tidbits

On the ABA Joint Committee on Employee Benefits teleconference last Thursday, Bill Bortz from Treasury cleared up some issues that have been creating uncertainty under the newly-enacted Pension Protection Act of 2006.


Welcome to the BNA Pension & Benefits Blog: Insight from the Advisory Board.

Henkel's Failure to Withhold FICA Taxes Violated Terms of Top-Hat Plan, Court Finds

2015-01-09 Henkel Corp. violated the terms of its deferred compensation and supplemental retirement plan by failing to withhold taxes owed under the Federal Insurance Contributions Act on the value of benefits under the plan, a federal judge in Michigan has ruled ( Davidson v. Henkel Corp. , 2015 BL 1384, E.D. Mi