What the New Fiduciary Rule Means for Plan Sponsors and Fiduciaries. On April 8, 2016, the Department of Labor published its final rule on who is a fiduciary as a result of giving investment advice under the Employee Retirement Income Security Act of 1974 (the “New Fiduciary Rule”) as well as related exemptions. Although the New Fiduciary Rule is targeted mainly at the providers of investment advice, it contains a number of provisions that are relevant to sponsors and fiduciaries of qualified retirement plans (e.g., 401(k) plans and traditional pension plans).
Articles Discussing General Topics In Employee Benefits.
Many employers have begun receiving Health Insurance Marketplace notices – letters stating that a particular employee reported that he or she wasn’t offered affordable minimum value coverage for one or more months during 2016. The letter states that the employee has been determined to be eligible for subsidized Marketplace coverage. This means, if the employer is an “applicable large employer” for purposes of the Affordable Care Act’s employer shared responsibility penalties, the employer may be subject to penalties with respect to that employee.
Last year’s announcement by the Internal Revenue Service (IRS) of the elimination of the current five-year remedial amendment cycle system for determination letter approval of restated individually-designed qualified plan documents provoked bitter criticism and calls to reverse course. The Service cited budget constraints allowing a median time of only three hours of agent review per plan for the necessity of severely restricting the issuance of letters.
In her latest video, Sue discusses how to meet the needs of the diverse workforce and different generations, including:
Like many other multiemployer pension plans, the Central States, Southeast and Southwest Areas Pension Fund was hit very hard by the financial crisis in 2008. In response, the Employee Retirement Income Security Act, or ERISA, was amended to allow Central States and other critically underfunded plans to remain solvent through the approval of a so-called “rescue plan.” On May 6, 2016, Central States’ proposed Rescue Plan was rejected by the IRS. This would have huge implications not just for the employers who contribute to the plan, but also for the Pension Benefit Guarantee Corporation (PBGC) and for participants and retires. Joining the WPI to examine the implications of the rejection of Central State’s plan was Littler shareholder Mike Congiu.
Since the beginning of the year, Nexsen Pruet tax and employee benefits attorney Sue Odom has been producing videos about various legal issues that she follows as part of her law practice.
For the past several months, we have been reporting on the application filed by the Central States Southeast and Southwest Areas Pension Fund (“Central States”) to the Department of Treasury to reduce “core” benefits to participants. This extraordinary remedy is permitted by the Kline-Miller Multiemployer Pension Reform Act of 2014 (“Kline-Miller Act”).
In recent weeks, much of the discussion around a recent Supreme Court case, Gobeille, has focused on ERISA preemption. But for fiduciaries of benefit plans the case can serve as a reminder of important duties that often go unexplored—protecting the private data of participants.
Nexsen Pruet tax and employment benefits attorney Sue Odom looks a compliance ’soft spot’ for companies. In this new video, Sue discusses what are known as Section 125 Plans, Cafeteria Plans and Premium Conversion Plans.
Surcharge and Life Insurance Plans: Plugging the Dike against Rising Tide of Employer Fiduciary Liability after Amara. Until the United States Supreme Court decided CIGNA Corp. v. Amara, in 2011, jurists had uniformly interpreted the Court’s earlier guidance under the Employee Retirement Income Security Act (ERISA) as prohibiting, with only minor exceptions, virtually any form of monetary relief for breach of fiduciary duty under the “catch-all” section of ERISA’s civil remedies provisions. That section authorizes “appropriate equitable relief.”
April 1, 2016
Edward C. Renenger
The benefits of an employee stock ownership plan (ESOP) are numerous, but some companies may not be taking advantage of those benefits due to certain misconceptions surrounding these plans. In addition to employees sharing in the company’s growth, ESOP-based companies show increased
Does a benefit plan, to fall within the so-called “church plan exemption,” have to be directly established by a religious entity? Or is it enough for the benefit plan to be established by an organization, such as a medical institution, that is itself established by a religious entity? That is the question that a number of courts are attempting to answer through their holdings in recent cases.
Nexsen Pruet tax and benefits attorney Sue Odom produced two quick videos. The first is about when an employee benefits attorney might be needed and the second about Employee Stock Ownership Plans.
A former executive starts a new chapter in her life and wants to buy a franchise operation and work there. A long-time consultant tires of working for others and wants to start and manage a new stand-alone business for himself. Where can they access money to fund these new operations? From their credit cards? Off their home equity lines? From a new kick-start campaign online?
The IRS recently issued Notice 2016-03 (the “Notice”), addressing several items with respect to changes made to the IRS’s determination letter program. The Notice also extends the deadline for sponsors to adopt a pre-approved defined contribution plan in certain instances.