How Employee Benefits Rules May Fare in the Post-Chevron World
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Insight: Studies, Research, Analysis, and Papers
How Employee Benefits Rules May Fare in the Post-Chevron World The Supreme Court's long-awaited decision overruling its landmark 1984 decision in Chevron USA v. Natural Resources Defense Council, held that a court considering a federal agency's regulatory interpretation of a statute must follow the "best" reading of the statute, not just a "permissible" reading. This raises the bar for federal agencies, including those administering employee benefits laws. The decision has already affected ERISA litigation, as discussed here. This article also identifies some other potential effects. Source: Wagnerlawgroup.com »» Click here for More Studies, Research, and White Papers Fiduciary and Plan Governance
Qualified Professional Asset Manager: An Important Tool for ERISA Fiduciaries The purpose of this article is so that investment managers, compliance personnel, and others understand (1) the prohibited transaction provisions and the need to utilize prohibited transaction exemptions like the QPAM Exemption to address them, (2) the meaning of the term "qualified professional asset manager," (3) the key conditions of the exemption, (4) the implications of a QPAM's disqualification by reason of certain criminal convictions and other prohibited misconduct, (5) and some issues that may arise when utilizing the QPAM Exemption. Source: Groom.com
How Asset Managers and Retirement Plan Fiduciaries Can Insulate Themselves From ESG Scrutiny ESG investing has become increasingly politically polarized. If there is an administration change in 2024, there is the prospect of significant enforcement activity across several substantive legal disciplines. As a result, it may be timely for asset managers and retirement plan fiduciaries to take the opportunity now to confirm that their ESG internal policies, procedures, investment strategies, external disclosures, and marketing materials can withstand what may be intense scrutiny. Source: Pionline.com »» Click here for more Fiduciary and Plan Governance Material Items of Special Interest to Advisers and Other Service Providers
DOL's Fiduciary Rule: The Latest Developments A financial professional that is an ERISA fiduciary engages in a prohibited transaction if the financial professional uses its fiduciary authority to generate additional fees for itself or a person in whom the financial professional has an interest that may affect its best judgment as a fiduciary. To address this risk, many financial professionals rely on PTE 2020-02. The Fiduciary Rule would have amended the exemption's conditions. Because of two recent court orders, parties relying on PTE 2020-02 should continue to comply with the current (non-amended) version of PTE 2020-02. Source: Klgates.com
The stay of the new DOL fiduciary rule will remain in effect until the lawsuits challenging the rule are decided and appeals are resolved. In the meantime, the fiduciary status of advisors and agents will be measured under the current regulation's five-part test. However, in some cases, the application of that test could result, as this article explains, in apparent one-time recommendations being deemed to satisfy the five-part test. As a result, advisors, agents, and their firms should carefully consider where fiduciary status for retirement accounts may apply and, in those cases, should consider complying with the conditions of an applicable prohibited transaction exemption. Source: Faegredrinker.com 403b Plans
All Plans Are Not Created Equal Like Neapolitan ice cream, 401k, 403b, and 457b are just three flavors of the same product. Like Baskin Robbin's 31 flavors are all good in their way, all the varieties of retirement plans sponsored by different types of employers also do their job well: improving retirement readiness for employees of for-profit, nonprofit, and governmental entities. However, all plans are not created equal, and cannot be audited the same. This article focuses on audit procedures specific to 403b plans. Source: Belfint.com
Is Your Individually Designed 403b Plan Eligible for a Determination Letter? The IRS rollout of this qualified plan determination letter program for 403b plans began in June 2023. Plan sponsors of Code Section 403b tax-sheltered annuity plans that have not already done so may want to consider applying for an IRS determination letter or planning and budgeting for the process next year if they are not yet eligible. Here is why. Source: Erisapracticecenter.com »» Click here for More 403b Material Court and Legal
Labor Agency Has Tall Task Saving ESG 401k Rule Post-Chevron The DOL needs to persuade a Texas judge that federal benefits law provides it with clear authority to promulgate its sustainable 401k investing regulation after the Fifth Circuit sent a challenge to the rule back to the trial court. Judge Matthew Kacsmaryk's earlier decision to uphold the rule leaned heavily on agency deference under the now-scrapped Chevron doctrine. The US Court of Appeals for the Fifth Circuit sent the case back to Kacsmaryk after the high court ruling. The next phase of the case will be a crucial early test of Loper Bright's impact on regulatory challenges. Source: Bloomberglaw.com
Multi-Employer Plan Sponsor Settles 401k Fee Suit CURPA, a Wisconsin-based professional employer organization, provides services to credit unions, such as payroll, employee benefits, and other employee management tasks. One of those benefits is a multi-employer 401k plan with more than 20,000 participants with account balances at the end of 2020, as per the DOL. Former plan participants in the CURPA multi-employer 401k plan have reached a deal to settle an ERISA suit over excessive fees. Source: Hallbenefitslaw.com
District Court Dismisses 401k Forfeited Funds Suit Against HP A California federal district court judge has dismissed a novel proposed class action suit against HP involving the company's alleged misuse of 401k funds forfeited by former workers. The judge reasoned that nothing in federal benefits law compelled HP to use the funds for plan expenses rather than to reduce its employer contributions. Source: Hallbenefitslaw.com
Judge Dimisses 401k Excessive Fee Allegations Against Tyson Foods A federal judge in the U.S. District Court for the Western District of Arkansas dismissed a lawsuit filed against Tyson Foods Inc., which had accused the company of overcharging participants for recordkeeping fees and failing to solicit competitive bids. Source: Planadviser.com
Another ERISA Forfeitures Lawsuit Allowed to Proceed A court hearing a lawsuit against Intuit, Inc., and its benefits committee denied the company's motion to dismiss, finding the plaintiff had sufficiently pled her fiduciary breach, anti-inurement, and prohibited transaction claims and that the plan "as a whole was damaged." In the complaint in this case, the plaintiff faulted Intuit for allegedly failing to use plan forfeitures to eliminate administrative expenses charged to participants' accounts and instead used those funds to reduce the company's contributions to the plan. Source: Millerchevalier.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC
Gulf Between Senate and House on DOL Budget, Retirement Security Rule The Democrat-led Senate Committee on Appropriations passed a spending bill for the DOL on Aug. 1, as part of a comprehensive bill to fund the DOL, the Education Department, and the Health and Human Services Department for the fiscal year 2025, which begins Oct. 1. The bill is considerably different from the budget passed by the Republican-controlled House Committee on Appropriations in July. The two bills also contain differing policy priorities. The House version would defund the Retirement Security Rule. Source: Asppa.org »» Click here for more on Legislative and Washington Actions Compliance and Regulatory
Participants Have Plan Distribution Options During Hurricane Season On August 9, the IRS announced it would provide tax relief for individuals and businesses in four states affected by Hurricane Debby: South Carolina, North Carolina, Florida, and Georgia. As intense storms are becoming more frequent due to climate change, it is more important than ever for participants to be aware of their distribution options during emergencies. Source: Planadviser.com »» Click here for more Compliance and Regulatory Material Marketplace News Cetera Leans Into Wealth Expertise in 401k Participant Programming Retirement Income Solution Debuts at J.P. Morgan Asset Management
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