For the many employers that use a pre-approved 401(k) plan (or another type of defined contribution plan), the deadline to execute a restatement of the plan was July 31, 2022. An employer that missed the deadline will need to (i) review whether a correction will be required to maintain the
Articles Discussing 401(k) Plans.
Crypto, SDBAs, and Your 401(k) Plan: What Now?
Just over a month ago, we wrote about the Department of Labor’s guidance on cryptocurrency as a 401(k) investment option, and the landscape has already shifted multiple times.
Fidelity Investments made news on April 26 when it announced its new cryptocurrency-based investment option for 401(k) plans and other investment vehicles.
Is Crypto Too Cryptic for Your 401(k) Plan?
It started sometime last year and, in hindsight, was inevitable. Clients with 401(k) plans and a crypto-savvy employee population began asking whether they could offer cryptocurrency as a plan investment option. In the 401(k) world, where even a self-directed brokerage window with built-in investment limitations can be too risky, the
DOL Issues Guidance on Use of Cryptocurrency in 401(k) Plans
On March 10, 2022, the Department of Labor issued guidance on the use of cryptocurrency in plans governed by ERISA. The announcement applies to cryptocurrencies as well as digital assets, which include “tokens,” “coins,” “crypto assets” and any derivates thereof.
Private Equity Investments In 401(K) Plans – The DOL Says Not So Fast
Hot button ERISA fiduciary issues remain a focus for investment committees of 401(k) plans in 2022. From “excessive” fee litigation – including litigation over the duty to monitor the fees charged by various mutual funds made available to plan participants (the U.S. Supreme Court reaffirmed this duty in January 2022)
401(k) Plans Using Pre-approved Plan Documents Must Be Restated by July 31, 2022
In Announcement 2020-7, the Internal Revenue Service (IRS) announced employers’ deadline by which to adopt new plan documents related to Notice 2017-37. The new announcement informs employers that maintain defined contribution plans (e.g., 401(k) plans, profit-sharing plans, and money purchase plans) through the adoption of IRS pre-approved plan documents that
Dealing With Missing Participants in Terminating Puerto Rico 401(k) Plans
For a host of legal and practical reasons, the only feasible alternative for disposing of the accounts of missing participants in a terminating 401(k) or other defined contribution retirement plan qualified only in Puerto Rico (commonly known as a “P.R.-only plan”) is, after making reasonable efforts to locate the missing
BlackRock 401(k) Plan Class Action Headed for Trial
A class action alleging that BlackRock entities favored their own proprietary funds when selecting investment options for BlackRock’s 401(k) Plan is headed for trial after Judge Haywood S. Gilliam, Jr. denied both parties’ motions for summary judgment on January 12, 2021. Baird v. BlackRock Inst’l. Trust Co., No. 17-1892 (N.D.
“Defined Contribution Plans, Section 401(k) Plans: Tax Aspects,” Bloomberg Law Benefits Guide
Susan Chambers, a partner in the Tax Practice Group in the New Orleans office, and Linda Bounds Keng, a partner in the firm’s Tax Practice Group in the Jackson office, authored the chapter titled “Defined Contribution Plans, Section 401(k) Plans: Tax Aspects” in the Bloomberg Law Benefits Guide.
401(k) Plan Sponsors—Do You Need to Start Tracking Hours for Your Part-Time Employees?
At the end of 2019, President Donald Trump signed into law the Setting Every Community Up for Retirement Enhancement (SECURE) Act, which included a number of changes to employer-sponsored retirement plans. One change involved expanding the ability of long-term, part-time employees to make 401(k) deferral contributions. While this change becomes
Department of Labor Releases Guidance for 401(k) Plan Investments in Private Equity
Last month the US Department of Labor (Department) issued an Information Letter stating that it is possible for individual account plans subject to the Employee Retirement Income Security Act of 1974 (ERISA) to offer limited private equity investments in a manner that complies with ERISA, provided certain suitability issues are considered by plan fiduciaries. The Information Letter confirms that a plan fiduciary would not violate ERISA fiduciary duties “solely because the fiduciary offers a professionally managed asset allocation fund with a private equity component.” Similarly, the Information Letter confirms that fiduciaries may offer private equity as a small component of an ERISA plan’s diversified investment option, like a target date fund, a target risk fund, or a balanced fund.
Suspending Safe Harbor Contributions Mid-Year: A Primer for Employers
As cash flow and decreased revenue concerns rise, many employers are looking for ways to cut costs. This article generally identifies the circumstances that allow a safe harbor 401(k) plan sponsor to suspend safe harbor contributions and the related consequences of such suspensions.
COVID-19 And Late Remittances of Employee Deferrals to 401(k) Plans
Many employers facing economic challenges because of COVID-19 have considered several possibilities for reducing their contributions to their 401(k) plans. Whether freezing safe harbor matching or nonelective contributions or deciding against making discretionary matching and/or profit-sharing contributions, the goal has been the same: reduce their employee benefits costs.
What many
Northrup Grumman Agrees to Settle 401(k) Excessive Fee Suit
Northrop Grumman has agreed to pay $12,375,000 to settle a class action brought under the Employee Retirement Income Security Act (“ERISA”) by participants in its 401(k) plan. The parties reached the initial terms of this settlement last year minutes before the start of the trial.
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.
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