Articles Discussing Retiree Benefits.

Wrongful use of retirement plan participant data was among the claims made by a class of 40,000 participants against the plan sponsor and others in Cassell et al. v. Vanderbilt University et al. Specifically, the plan participants claimed that the University inter alia breached its “loyalty and prudence” duty by failing to protect confidential employee retirement plan participant information, allowing the plan’s recordkeeper to obtain access to participant’s personal information and to profit from that access.

As reported by CBC, B.C. Pension Corporation announced a data breach involving pension plan records after discovering a box containing microfiche could not be found following a recent office move.

Collective bargaining agreements, including those that establish ERISA plans, should be interpreted according to ordinary principles of contract law, the U.S. Supreme Court has reaffirmed in a per curiam opinion. CNH Industrial N.V. v. Reese, No. 17-15 (Feb. 20, 2018).

According to the U.S. Department of Labor (DOL), one-third of American workers do not have the option to participate in a retirement savings plan through their employers.1 To help employees save for retirement, more states are passing or exploring legislation that requires employers to automatically enroll their workers in state-sponsored payroll deduction savings programs. The employee may then opt out, or change the beginning contribution amount, if the employee wishes to do so. Generally, this legislative trend affects only employers that do not offer access to an employer-sponsored retirement plan.

Executive Summary: On April 6, 2016, the U. S. Department of Labor (DOL) released a long-awaited final rule expanding the definition of “fiduciary” under ERISA as well as the duties of investment advisors who qualify as fiduciaries thereunder. In addition, the DOL issued two related prohibited transaction exemptions that have the effect of minimizing the compliance burden imposed on investment advisors who now, under the final rule, qualify as fiduciaries, by (1) permitting firms to receive certain common types of compensation if they contractually commit to putting their clients’ best interests first, and (2) permitting certain principal transactions between those fiduciary-advisors and their customers.

The Department of Labor (DOL) has issued a final rule to re-define who is rendered a “fiduciary” of an employee benefit plan under the Employee Retirement Income Security Act (ERISA) by providing investment advice to a plan or its participants or beneficiaries. More than five years in the making, issuance of a final rule to address conflicts-of-interest in retirement advice has been a priority for the White House and DOL to advance its “middle-class economics” agenda in the face of criticism in Congress and by a number of stakeholders. According to a DOL fact sheet, “this final rulemaking fulfills the Department’s mission to protect, educate, and empower retirement investors as they face important choices in saving for retirement in their IRAs and employee benefit plans.”

An IRS plan audit uniquely focuses an employer’s mind on the core identity of its qualified retirement plan, which is that of a tax exempt organization, but one whose exemption (or “qualification”) requirements are far pickier than those applicable to one’s favorite charity. Any single material operational violation or non-conforming written plan provision risks disqualification and loss of the related special tax benefits.

Citing the threat of future insolvency, a New Jersey Teamsters Local Pension Fund has applied to the U.S. Treasury Department for permission to reduce by 40 percent the vested member benefits in the Fund.

On December 9, 2015, the IRS issued Notice 2015-87 [link below], which provides guidance on the application of the recent United States Supreme Court (“SCOTUS”) decision in Obergefell v. Hodges [link below] to qualified retirement and health and welfare plans.

The IRS recently issued long-awaited final regulations on hybrid pension plans, along with proposed transitional relief for hybrid pension plans that are not in compliance with the final rules. The newly issued final rules provide guidance on issues not covered in the final hybrid plan regulations that were issued in 2010, and clarify certain issues in the 2010 final regulations. The final rules are generally effective for plan years beginning on or after January 1, 2016, except that provisions in the final rules clarifying provisions in the 2010 final rules are effective for plan years beginning on or after January 1, 2011.

Q: When is a retirement account not a retirement account? A: When it’s an inherited IRA and the owner is bankrupt.

On April 4, 2014, the Department of the Treasury issued its long-awaited supplemental guidance on when and how tax-qualified retirement plans (including 401(k) plans) must comply with Windsor v. United States, in which the Supreme Court held that federal laws must recognize valid same-sex marriages. In Rev. Rul. 2013-17, the Department interpreted Windsor to require recognition (for purposes of the Internal Revenue Code) of same-sex spouses who were legally married where the marriage took place, effective Sept. 16, 2013. In the new guidance (Notice 2014-19), the Department expands upon that prior guidance with respect to qualified retirement plans and whether (and how) same-sex spouse recognition can be applied retroactively.

The First Circuit recently issued a decision in Bonneau v. Plumbers & Pipefitters Local 51 Pension Trust Fund, No. 13-1515 (1st Cir. Nov. 15, 2013). This interesting case addresses an open question – when a pension plan is amended to enhance benefits based on prior service, are those benefit enhancements protected accrued benefits that cannot be reduced by a future amendment, or are they gratuitous benefits that can be taken back? The First Circuit decided that if the benefit enhancement is adopted while the employees are still employed, the resulting benefits are protected, but if they are adopted after retirement or termination of employment, they are not protected by ERISA.