ERISA & Employee Benefits

The CARES Act: Relief for Small Businesses

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act (the “Act”) was passed. The bill is expected to provide relief for eligible small business through a loan guarantee program, the postponement of certain tax payments, and a tax credit. The Act states that the Administrator at the Small Business Administration (SBA) should issue guidance to lenders and agents ...

Retirement Plan Provisions of CARES Act

The third COVID-19 stimulus package has provisions regarding retirement plans, including expanded and penalty-free withdrawal rights, expanded loan rights, extended rights to repay loans and withdrawals, and a deferral of mandatory distributions. Coronavirus-Related Distributions The 10% early distribution penalty from retirement plans and IRAs under Section 72(t) of the Internal Revenue Code ...

Suspending or Reducing Safe Harbor Contributions in Defined Contribution Retirement Plans

In reaction to the current volatility in the economy due to covid-19, we have been receiving a large number of questions from retirement plan sponsors regarding whether it is permissible to suspend or reduce required safe-harbor contributions during the plan year.  Many companies have to reduce their expenses and improve cash flow.  In recent years many of these companies adopted safe harbor ...

Suggested Administrative Practices in Light of Intel Decision - Ensuring "Actual Knowledge"

by Stephen Wilkes and Livia Aber

Advisors: Time to Finish What was Started….ERISA and Fiduciary Process Have Evolved…Have You?

Over 46 years ago, the Employee Retirement Income Security Act (“ERISA”) was passed overwhelmingly in the House of Representatives by a 376-4 vote.  Congress passed ERISA to empower American workers toward retirement security.  Fast forward, on May 23, 2019, the House of Representatives overwhelmingly passed the Setting Every Community Up for Retirement Enhancement Act (“SECURE Act”) by a vote of ...

Supreme Court's Actual Knowledge Decision Underscores Importance of Plan Administrator Best Practices

The Supreme Court settled the debate over what constitutes "actual knowledge" in the context of an ERISA fiduciary breach claim in a unanimous and simple decision that applied dictionary definitions of the term "actual" to find that the fiduciary breach knowledge requirement means that "the plaintiff must in fact have become aware of that information." The Intel Investment Policy Committee v. ...

Eighth Circuit Delivers Guidance on Whether Rate Setting Amounts to Fiduciary Conduct

Courts have long struggled to set the boundaries at which point ERISA plan service providers exert sufficient control and discretion over plan assets to make them fiduciaries under ERISA 3(21). The significance of being an ERISA fiduciary is self-evident in the litigation context: if an entity is not an ERISA fiduciary, then it cannot be liable for a breach of ERISA's fiduciary duties and ...

Congress Considers Multiemployer Pension Reforms While Benefit Suspensions Loom

The U.S. Treasury Department has received an application by the American Federation of Musicians and Employers' Pension Fund (the "Plan") to suspend benefits under the Multiemployer Pension Reform Act of 2014. Multiemployer pension plans cover union-represented workers and are run by a board of trustees, half appointed by the union and half appointed by employers. Most provide a traditional ...

SECURE Act Finally to Become Law

Congress is subject to one of the same vices as many Americans, namely, putting off important activities until the last moment. Earlier this year, the House of Representatives by a 417-3 vote, approved the Setting Every Community Up for Retirement Enhancement (SECURE) Act (or “Act”), but it never advanced in the Senate, in part because of reservations as to how it would be paid for. However, this ...

ERISA Case in the District Court for the Southern District of New York Highlights Plan Sponsor QDRO Responsibilities

A sometimes forgotten issue in a divorce, separation, or other domestic relations proceeding is the division of retirement plan benefits between former partners and/or husband and wife. While the general rule is that ERISA and the Internal Revenue Code do not permit a participant to assign or alienate the participant's interest in a retirement plan to another person, a developed exception to the ...