We have posted three articles on Department of Labor’s proposal to re-define who is an ERISA advice ‘fiduciary,’ reviewing the proposal generally and the seller’s carve-out, the Best Interest PTE and the participant education carve out. As we discussed in those articles, the DOL proposal may affect plan sponsors in three ways. First, sponsors and… Read More
In our prior article we reviewed the basic principles of an ERISA fiduciary’s duty to monitor persons it appoints to carry out plan-related functions. In this article we discuss the application of those principles to the selection of plan investments and investment managers. We are going to consider this issue exclusively in the context of… Read More
The scope and substance of a fiduciary’s duty to monitor those persons it appoints to carry out plan-related functions is becoming an issue in several contexts. The fiduciary’s ongoing duty to monitor the prudence of investment decisions was the issue the Supreme Court sent back to the lower court in the recently decided Tibble case…. Read More
The Department of Labor’s proposed regulation re-defining who is an ERISA ‘fiduciary’ would, among other things, supersede current rules on investment education. DOL’s participant education rules generally define when participant communications about investments (and, under the proposal, distributions) constitute ‘education’ or ‘advice.’ Communications that are advice may trigger fiduciary status; communications that are education generally… Read More
as of July 31, 2015 Falling interest rates during July increased pension liabilities, producing losses during the month, although both model pension plans we track remain ahead for the year. Plan A lost 2% last month but remains up 5% for the year, while Plan B dropped 1% during July but remains up 2% so… Read More
In this Current Outlook we review legislation introduced that would ease the rules on electronic disclosure. We also briefly discuss the effect of the Supreme Court’s decision in Obergefell (the same-sex marriage case) on retirement plans and its decision not to review the Fourth Circuit’s decision in Tatum v. R. J. Reynolds Tobacco Company. Electronic… Read More
Many sponsors maintain cash balance plans, either as (1) their main retirement benefits program, (2) a program for a specific group of employees (e.g., employees ‘grandfathered’ in connection with a ‘soft freeze’), or (3) a legacy benefit for certain employees (in connection, e.g., with a ‘hard freeze’). In 2014, IRS finalized cash balance plan regulations,… Read More
Recently, the Supreme Court handed down its unanimous decision in Tibble v. Edison International, a defined contribution plan fee case. The Court vacated the Ninth Circuit’s decision, which had been in favor of sponsor fiduciaries, and remanded the case back to the Ninth Circuit for further proceedings. The case involves the application of ERISA’s statute… Read More
On July 9, 2015, IRS released Notice 2015-49, Use of Lump Sum Payments to Replace Lifetime Income Being Received By Retirees Under Defined Benefit Pension Plans. The Notice effectively prohibits, as of July 9, 2015, the payment of lump sums to retiree-annuity recipients in de-risking transactions. In this article we review the Notice. Background –… Read More
On May 13, 2015 Senators Isakson (R-GA) and Murphy (D-CT) introduced the Lifetime Income Disclosure Act, a bill that would require defined contribution plan sponsors to provide participants an annual estimate of the ‘lifetime income stream equivalent’ of their accrued benefit. The bill would require the Department of Labor to issue implementing regulations within a… Read More
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