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New Executive Order Seeks to Expand Small Business Access to Retirement Plans

President Donald Trump has signed an Executive Order instructing the Department of Labor (DOL) and the Treasury Department to consider regulations to make it easier for small businesses to offer retirement savings plans. Some have claimed that complying with current requirements has made it difficult for small businesses to band together to offer association retirement plans (ARPs), sometimes referred to as multiple employer plans. The proposed changes would allow small businesses to pool their resources to provide employees a type of 401(k) plan.

In Private Letter Ruling, IRS Approves 401(k) Student Loan Repayment Benefit

The IRS has released a Private Letter Ruling (“PLR”) 201833012, in which it approved a student loan repayment program as a 401(k) benefit. Although the PLR can only be applied by the taxpayer/plan sponsor requesting it, it is a promising development for employers seeking to provide stronger incentives for a workforce increasingly saddled with student loan debt.

IRS Allows Student Loan Benefit in 401(k) Plan

In a private letter ruling (PLR), the Internal Revenue Service (IRS) approved an employer's proposed program to add a student loan benefit to its 401(k) plan. The employer will make matching contributions to its 401(k) plan for employees who make student loan repayments. The program would be voluntary and an employee could opt-out after enrolling.

Benefits Update (No. 3, September 2018)

In July 2016, the U.S. Department of Labor (USDOL), the Internal Revenue Service, and the Pension Benefit Guaranty Corporation released proposed revisions to the Form 5500 Annual Return required for certain ERISA-covered employee benefit plans. While the proposed regulations garnered attention when they were released, the agencies have been relatively quiet about the changes to come. However, because the regulations target plan year 2019 and could include sweeping compliance changes for health plans in particular, it’s time to start planning.

The IRS Doesn’t Disappoint

As anticipated by plan sponsors of closed defined benefit pension plans, the IRS issued Notice 2018-69, the fourth extension for an additional year of the temporary nondiscrimination relief for “closed” defined benefit pension plans originally announced by the IRS during 2014. The extended relief applies to plan years beginning before 2020 for those “closed” plans that satisfy certain conditions in Notice 2014-5. The relief for “closed” defined benefit plans refers to those defined benefit plans amended prior to December 13, 2013, to limit ongoing accruals to some or all employed participants in the plan as of a particular date, thus no longer admitting new participants into the plan.

DOL Issues Updated ACA Marketplace Notice

The U.S. Department of Labor (DOL) recently issued new versions of the Affordable Care Act (ACA) Notices of Exchanges. The ACA requires employers to provide employees with a written notice that contains information about the insurance purchasing exchanges (i.e., the “Health Insurance Marketplace” or “the Marketplace”) and describes the availability of a premium tax credit and the effects of obtaining coverage through the Marketplace. In the notice, employers must also explain that employees may lose their employers’ nontaxable contribution to health benefits if they elect to obtain coverage through the Marketplace.

Victory for NYU After First Trial in the 401(k) Fee Cases Filed Against Colleges and Universities

In the past two years, more than 16 prominent colleges and universities across the country have been targeted by class action lawsuits filed under the Employee Retirement Income Security Act (ERISA) challenging the fees and investment lineups in the schools’ retirement plans. On July 31, 2018, a New York federal court issued an opinion and order in favor of NYU in the first of those cases to proceed to trial, Sacerdote v. New York University.1 As the first case to consider the merits of the claims asserted in these ERISA class actions, Sacerdote is not only a significant victory for NYU but also for the other colleges and universities defending similar suits.2

Segal Blend Litigation, Part Two: New Jersey District Court Holds That Use of Segal Blend Did Not Violate MPPAA

As our earlier article reported, Judge Robert W. Sweet of the U.S. District Court for the Southern District of New York had recently held that a multiemployer pension fund’s use of the “Segal Blend” to calculate a withdrawn employer’s withdrawal liability violated the provisions of the Employee Retirement Income Security Act (“ERISA”), as amended by the Multiemployer Pension Plan Amendments Act (“MPPAA.”)

Ninth Circuit Determines Employment Agreement Does Not Require Arbitration of Certain ERISA Claims

On July 24, 2018, the Ninth Circuit Court of Appeals ruled in Munro v. University of Southern California, No. 17-55550, that an employer/fiduciary of a 401(k) plan cannot force a fiduciary breach claim under Employee Retirement Income Security Act (ERISA) section 502(a)(2) into arbitration. In the case, the named plaintiffs signed mandatory arbitration agreements as part of their employment. The employees agreed to arbitrate “all claims . . . that Employee may have against the University or any of its related entities . . . and all claims that the University may have against Employee.” The court held that these agreements only applied to claims made by or against the employees and did not require arbitration of claims made under ERISA section 502(a)(2) because such claims are made on behalf of the benefit plan and are not individual claims.

Association Health Plans – Update

As we advised was likely during our June 29, 2019 webinar, Association Health Plans—Are They Really an Option to Consider?, at least two states were likely to challenge the enforceability of the new regulations issued by the Department of Labor that expand the definition of “employer” for groups who are qualifying association health plans (“AHP’s”).