Employee Benefits Law Report

Archives: ERISA Fiduciary Compliance

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DOL proposes new ERISA fiduciary ESG and proxy voting rules

In what some commentators are describing as the latest volley in a game of regulatory ping-pong, the Department of Labor (DOL) published proposed regulations that would change the way an ERISA fiduciary should consider environmental, social and governance (ESG) issues and related proxy voting decisions with respect to plan investments (the proposed regulations). The proposed … Continue Reading

DOL confirms cyber security is an ERISA fiduciary issue and issues guidance for retirement plan sponsors, service providers and participants

The U.S. Department of Labor (DOL) recently announced new guidance for plan sponsors, fiduciaries, record keepers and participants on best practices for maintaining cyber security. This is the first time the DOL has issued such guidance, and it comes in response to a recent General Accounting Office (GAO) report responding to increased cybersecurity risks to retirement plan … Continue Reading

Fifth Circuit issues mandate that vacates the ERISA fiduciary rule: What plan sponsors should do next

After years of revising regulations and even more years of legal battles, the Department of Labor’s (DOL) 2016 ERISA fiduciary regulations (the regulations) essentially end up right where they started. That is because the U.S. Court of Appeals for the 5th Circuit issued its mandate officially vacating in toto the regulations, including the Best Interest … Continue Reading

Are the ERISA disability claims procedure regulations going to be delayed? How qualified and nonqualified plan sponsors should respond to the latest guidance

While the fiduciary rule has received most of the attention in the world of ERISA as of late, a lesser known regulation that was finalized late last year also may require action by plan sponsors. This regulation , issued by the Department of Labor (DOL) in December 2016, requires applicable plans to satisfy additional procedural … Continue Reading

Hurry up and wait: ERISA fiduciary rule delayed

While it took longer than many expected, the Department of Labor (DOL) issued a proposed rule that would provide a 60-day delay to the application of the new fiduciary rule and related prohibited transaction exemptions. As we reported in our previous blog, the rule was set to impose new fiduciary obligations on those who provide … Continue Reading

Final fiduciary rule creates implications for plan sponsors and financial advisers

After a drawn out and controversial regulatory review process, the United States Department of Labor (DOL) on April 6, 2016, issued final guidance that expands the definition of a “fiduciary” under the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code regarding persons or entities that render investment advice for compensation, received directly … Continue Reading

Fiduciaries in stock-drop suits should be evaluated on real-time conduct, not 20-20 hindsight—Sixth Circuit decision Pfeil, et. al. v. State Street Bank & Trust Co.

ERISA fiduciaries of employee stock ownership plans (ESOPs) and plans with employer stock funds increasingly find themselves in a Catch-22. If they continue to invest in employer stock and the stock price falls, the fiduciaries could be sued for violating their duty of prudence. If they stop investing in employer stock and the price rises, the … Continue Reading

Protection of ERISA’s statute of limitations is narrowed by the Supreme Court

The United States Supreme Court yesterday issued a unanimous opinion in Tibble et al. v. Edison International et al. vacating a Ninth Circuit Court of Appeals ruling that claims by employees of Edison International against the company over allegedly imprudent 401(k) plan investments were time-barred under applicable ERISA statute of limitation rules. The issue before the … Continue Reading

ERISA plan service provider avoids fiduciary status—what it means for service providers and plan sponsors

A recent Third Circuit decision (Santomenno v. John Hancock, et. al.) has been described as a win for service providers to ERISA plans. It certainly is important because this decision, along with other fairly recent decisions, helps to illustrate when service provider actions become significant enough to make them fiduciaries. A somewhat less discussed point, … Continue Reading

Here we go again: Does the DOL’s request for information regarding self-directed brokerage accounts mean new fee disclosure requirements are coming soon?

If you’re a fan of the tv show “The Simpsons,” you might remember an early episode where Homer Simpson launched a crusade against every public safety issue in the city. The result was practically every square inch of the town contained signs alerting people to every dip, pothole, and other nuisance on the roads. After … Continue Reading

SEC money market reform – ERISA impact

Our sister blog reported recently that the Securities and Exchange Commission (the “SEC”) published final regulations that reform money market mutual funds (“MMFs”). The regulations provide for two core reforms: (1) “Institutional” MMFs, other than those invested primarily in government securities, are prohibited from using a stable net asset value (“NAV”), and (2) MMFs must … Continue Reading

DOL updates missing participant guidance

On Thursday, the Department of Labor issued a Field Assistance Bulletin updating its prior guidance on locating missing participants. As before, the guidance technically only applies in the context of terminating defined contribution plans, though the guidance can be instructive for fiduciaries trying to locate missing or unresponsive participants in other retirement plan contexts as well. A central reason … Continue Reading

Could’ve, would’ve. What should a fiduciary do? Fourth Circuit decision could spell more uncertainty for retirement plan fiduciaries.

Coming on the heels of the U.S. Supreme Court’s Dudenhoeffer decision, which eliminated a pro-fiduciary presumption with respect to company stock holdings in qualified retirement plans, the 4th Circuit issued a decision last week that could cause even more unrest for plan fiduciaries. The case, Tatum v. RJR Pension Investment Committee, et al., represents a potential elevation of … Continue Reading

The first progeny of the Hobby Lobby decision

As we noted in a previous blog entry, the United States Supreme Court recently ruled in two companion cases, Sebelius v. Hobby Lobby Stores and Conestoga Wood Specialties v. Sebelius (referred to hereafter as Hobby Lobby) , that regulations issued under the Affordable Care Act (the “ACA”) that compel closely held corporations to provide contraception … Continue Reading

ERISA preemption of state law regarding multiemployer health, welfare and retirement benefits

The Pennsylvania General Assembly has given us another opportunity to expand our employee benefit plan boundaries discussion. This time, the discussion applies to multiemployer plans in the construction industry. It has been reported that Rep. William Keller, D-Philadelphia, introduced a bill in the General Assembly to amend the state’s Mechanics’ Lien Law to classify union … Continue Reading

Facebook brag underscores the enforceability of confidentiality clauses in settlement agreements

Settlement agreements are fairly common in the ERISA / employee benefits area. We typically do not need “unique” provisions for these agreements, beyond making sure all the proper parties are named and that ERISA is referenced. But two issues typically require extra attention: confidentiality provisions, and payment method (including tax withholding and reporting). As discussed in our sister blog, a party might quietly violate a confidentiality provision, and get away with it without causing any real harm.… Continue Reading

ERISA preemption is complicated – except when it isn’t

In light of health care reform, we anticipate ERISA preemption cases to start popping up more frequently. Two recent decisions demonstrate that ERISA preemption is complicated, except when it isn’t. In Liberty Mutual Ins. Co. v. Donegal, Second Circuit Judge Dennis Jacobs explains the complicated nature of ERISA preemption. This opinion may be helpful for anyone to develop a better understanding of the topic and its history. … Continue Reading
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