The US District Court for the District of Colorado granted partial summary judgment to 401(k) fiduciaries, holding that ERISA’s six-year statute of repose barred some claims and rejecting challenges to the plan’s fees.
McDermott Will & Emery
Still No Right to Jury Trial – MIT 401(k) Plan Participants Not Entitled to Jury Trial of ERISA Breach of Fiduciary Duty Claims
The District of Massachusetts court struck the plaintiffs’ jury-trial demand in their ERISA complaint for damages and equitable relief against 401(k) plan fiduciaries. The court followed the “great weight of authority” in ruling that there is no right to trial by jury in ERISA actions for breach of fiduciary duty.
Ninth Circuit Clarifies “Actual Knowledge” for ERISA’s Statute of Limitations
Late last year, the Ninth Circuit held that in order to trigger ERISA’s three-year statute of limitations a defendant must demonstrate that a plaintiff has actual knowledge of the nature of an alleged breach. Accordingly, the court held that merely having access to documents describing an alleged breach of fiduciary duty is not sufficient to…
IRS Provides 403(b) Plan Relief for Improper Exclusion of Part-Time Employees
Posted in Retirement Plans
The IRS recently released Notice 2018-95 to provide transition relief to 403(b) plan sponsors that improperly excluded part-time employees from making elective deferrals under their plans. Employers must begin to operate the part-time employee exclusion under their 403(b) plans correctly for the plan year immediately following the transition relief period, which will mean as soon…
First Circuit Holds Defendants Have Burden to Negate Loss Causation in ERISA Fiduciary Duty Cases
The US Court of Appeals for the First Circuit has solidified a circuit split on who has burden of proving loss causation in ERISA breach of fiduciary duty cases. The First Circuit joined the Fourth, Fifth and Eighth Circuits holding that once a plaintiff demonstrates a fiduciary breach, the defendant has the burden to negate…
Tax Cuts and Jobs Act of 2017: Impact on Executive Pay of Tax-Exempt Organizations
By McDermott Will & Emery on
Posted in Employee Benefits, Executive Compensation
The Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”) made some significant changes to the executive pay area for tax-exempt organizations with the imposition of a new excise tax on certain amounts paid to some employees of the tax-exempt organization. Imposing taxation in areas which previously had no such result will warrant…
ERISA Preempts State Regulation of PBM–Pharmacy Pricing Agreements
ERISA broadly preempts state laws that “relate to” ERISA-governed employee benefit plans to ensure a uniform federal regulatory scheme and to relieve ERISA plans from the burdens of satisfying a patchwork of state laws. Recently, however, several states have enacted legislation designed to regulate the prices that pharmacy benefit managers, as third-party administrators for ERISA-governed…
Lessons Learned from ESOP-Owned Companies from Recent Litigation
By McDermott Will & Emery on
Posted in Employee Stock Ownership Plans (ESOPs)
Recent litigation and audit activity is focusing on the process undertaken by fiduciaries in connection with a transaction involving an ESOP. Eliot Burriss presented at the 2018 National Center for Employee Ownership Conference summarizing relevant litigation cases, exploring roles and responsibilities, and providing best practices.
SEC Director Makes Groundbreaking Speech about Blockchain Token Sales
The Director of the SEC’s Division of Corporation Finance William Hinman gave a speech in which he discussed whether a digital asset originally offered as a security can become something other than a security over time. The speech provided some of the most important considerations to date for analysis of blockchain token transactions under US…
ESOP Litigation Trends: Department of Labor Voids Fiduciary Indemnification Agreements to Reach Settlements
The US Department of Labor has taken the position that certain indemnification clauses are void against public policy under Section 410 of ERISA. This policy has been adopted by private plaintiff classes; as evident from a recent settlement, a policy that voids indemnity provisions can limit defense budgets, make settlements more likely and potentially create…