DOL ERISA Enforcement on the Rise
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Compliance and Regulatory DOL ERISA Enforcement on the Rise Abstract: The DOL recently published its Fiscal Year 2018 "Fact Sheet" documenting the criminal and civil enforcement activities. Total monetary recoveries increased for the third year in a row, due to historically high recoveries from EBSA's civil enforcement actions. Although civil enforcement recoveries reached a historic high -- the third largest in over a decade -- the trend of increased criminal investigations and decreased civil investigations continued in FY 2018. Source: Eversheds-Sutherland.com DOL Proposed Regulations on Overtime Exemption Could Increase 401k Plan Contributions Abstract: The DOL issued proposed regulations that, if adopted in proposed form, would substantially increase compensation thresholds used to determine whether executive, administrative, and professional employees must be paid overtime. Among other repercussions, the new rules could indirectly affect retirement plans, including 401k plans, because increased overtime eligibility might result in higher wages. Source: Compliancedashboard.net Not Quite Gone, Far From Forgotten: The Current Status of the DOL Fiduciary Rule Abstract: In June 2018, the US Court of Appeals for the Fifth Circuit officially ordered the DOL to vacate the so-called DOL Fiduciary Rule and its related exemptions. As a result of this order and the DO's decision not to appeal, the DOL Fiduciary Rule is regarded as effectively repealed, leaving just the formality of removing it from the Code of Federal Regulations. But the rule continues to influence developments not only in the retirement area, but also beyond. Source: Morganlewis.com »» Click here for more Compliance and Regulatory Material Fiduciary and Plan Governance Understanding the 3(38) Investment Manager Abstract: Employers and plan sponsors who have not taken the proper steps to mitigate their liability with respect to the provisions of Section 404(a) of ERISA run the potential for drawn out litigation and the financial risk associated with failing to adhere to the "Prudent Person Rule." This requirement may cause you to consider whether you wish to continue to assume the role of a Section 3(21) plan fiduciary or outsource investment oversight to a Section 3(38) Investment Manager. Source: Planpilot.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers Employee Benefits Due Diligence Enhance M&A Negotiations Abstract: While certain aspects of M&A negotiations are secondary or tertiary aspects, they can ultimately make or break a deal. This article offers several steps companies can implement to better manage employee benefits programs during M&A deals. Source: Milliman.com Ethnicity and Culture Influence Views on Retirement Abstract: One size does not fit all for today's diverse consumers when it comes to retirement. In fact, it is increasingly becoming a very personalized journey, as underscored by the latest research from MassMutual. Survey underscores different diverse consumers' attitudes about retirement, including timing, proclivity to plan, expectations, and sources of income. Source: Massmutual.com 19th Annual Transamerica Retirement Survey Abstract: The latest research findings from TCRS based on its 2018 survey of American workers. The Annual Transamerica Retirement Survey explores attitudes about retirement and retirement readiness among American workers. What Is "Retirement"? Three Generations Prepare for Older Age highlights differences and similarities among Baby Boomers, Generation X, and Millennials. Source: Transamericacenter.org Tailoring Plan Designs to Reflect Shorter Employee Tenure Abstract: Recent research reports suggest average employee tenure in the U.S. has trended downward; retirement industry experts agree this fact should inform plan design discussions and participant-level services. Source: Planadviser.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers Auditors Must Adapt Their Audit Approach With the Technology Used to Administer Retirement Plans Abstract: One of the top changes is the overwhelming acceptance of the use of technology to make the administration of plans a much easier task. Gone are the hardcopy enrollment forms and change forms. Gone are the never-ending changes that human resource and the payroll departments must make to participant records and the payroll system. These changes impact how auditors will need to approach the audit of the plan. Source: Poolercpa.com Court and Legal ERISA Fiduciary Breach Claims Against Smaller Plans Increase in 2018 Abstract: As plaintiffs' attorneys noticed the reductions in plan fees and the successful litigation on the part of large plans, they begin to use these negotiated reductions as evidence against smaller plans. These cases argue that, previously, fiduciaries had not been paying attention as plan fees crept out of control. There is now a clear pattern for ERISA litigation, making it profitable to pursue smaller plans. Source: Hallbenefitslaw.com Oracle Granted Partial Summary Judgment in 401k Fees/Investment Option Case Abstract: The US District Court for the District of Colorado granted partial summary judgment to 401k fiduciaries, holding that ERISA's six-year statute of repose barred some claims and rejecting challenges to the plan's fees. Source: Employeebenefitsblog.com Service Provider Managing Stable-Value Fund Was Not a Functional Fiduciary Abstract: In litigation involving a service provider's management of a stable-value fund that was included as an investment option for an employer retirement plan, the US Court of Appeals for the Tenth Circuit affirmed the district court's grant of summary judgment in favor of the service provider. The Tenth Circuit held that the service provider was not a fiduciary under the Employee Retirement Income Security Act of 1974 (ERISA), and therefore could not be held liable for alleged breaches of fiduciary duty. The court also concluded that the participant could not recover on his alternative claim alleging the service provider was a non-fiduciary party in interest that participated in a prohibited transaction because he failed to show the relief he sought was equitable under ERISA. Source: Westlaw.com »» Click here for more Court and Other Legal Issues Legislative and Washington DC Arkansas Moves in on Abandoned Retirement Accounts Abstract: Arkansas has shortened the wait before it can claim abandoned retirement accounts and other assets, a move that some mutual fund industry and consumer advocate groups worry could prompt other states to follow suit and potentially upend consumers' retirement plans. Source: Morningconsult.com Congress Makes Headway on Retirement Legislation Abstract: Both the House and Senate have rolled out retirement plan legislative proposals that recycle many previous initiatives. With bipartisan approval in both chambers, hopes are high that 2019 will be the year for action. The proposals include coverage and nondiscrimination relief for closed defined benefit plans, enhancements for 401k plans, multiple employer pension plans, lifetime income disclosures for defined contribution plans, and more. Source: Buck.com »» Click here for more on Legislative and Washington Actions State-Based Retirement Programs Judge Finds CalSavers Not Pre-empted by ERISA Abstract: ERISA does not pre-empt the California Secure Choice Retirement Savings Program (CalSavers), a federal judge ruled last week. The plaintiffs -- the Howard Jarvis Taxpayers Association and two of its employees -- sought to stop the program from taking effect before employers begin enrolling July 1. Source: Mercer.com The Steel State Takes Aim at Auto-IRA Program Abstract: A bipartisan task force in Pennsylvania is recommending the establishment of a state-run auto-IRA program to help workers who don't have access to a private-sector retirement plan. The task force, which was established in September 2017 by State Treasurer Joe Torsella, released a report March 27 calling for enactment of legislation authorizing the creation of an auto-IRA program through which private-sector employers not currently offering any retirement plan to their workers would have the opportunity to provide access to portable retirement savings options. Source: Napa-net.org Marketplace News Digital Retirement Platform Company Vestwell Raises $30 Million Marsh & Mclennan to Acquire Centurion, a Pennsylvania Retirement Group Cerity Partners Acquires Blue Prairie Group »» Click here for More Marketplace News
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