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Using Paid Time Off Funds to Provide Student Loan Relief to Employees

What do unused paid-time-off (PTO) days, student loan debt and the coronavirus have in common? An opportunity for employers to provide financial relief to employees who are increasingly putting off vacations due to the COVID-19 pandemic. In a recent article by the Society of Human Resource Management, Jeff Holdvogt, a partner in McDermott’s Chicago office, explained that more employees, particularly Millennials, are telling employers that benefits to help pay off student loan debt would go a long way to attracting and retaining them. Access the article.

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ESOP Litigants Play by Their Own Valuation Rules

Imagine if you were playing on a baseball team and the opposing players argue that you are violating the rules of soccer. That’s what it’s like when private parties and the Department of Labor (DOL) challenge Employee Stock Ownership Plan (ESOP) valuations. Plaintiffs play a very different valuation ballgame, which confounds experts who go up against them in a dispute involving allegations that an ESOP paid more than “fair market value” for stock of the sponsor company. In a recent webinar, McDermott attorney Richard Pearl discussed valuation concepts and some fundamental issues under the Employee Retirement Income Security Act. Read more.

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Updated PBGC Guidance for Defined Benefit Plans

Earlier this year, the US Pension Benefit Guaranty Corporation (PBGC) issued a final rule, modifying PBGC regulations that apply to defined benefit pension plans. Among those changes were revisions to: (i) the reportable event notification requirements; (ii) annual financial and actuarial information (Form 4010) reporting; (iii) single-employer plan termination rules; and (iv) the premium rate calculation rules. The rule was generally effective on March 5, 2020, but some provisions have different applicability dates. Access the article.

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Multiemployer Pension Plans: Addressing the Issue of Underfunding

A significant issue facing many business owners is the impact of underfunded multiemployer pension plans. This is most common, but not exclusive to, unionized businesses. McDermott Partner and Global Head of the Firm’s Employee Benefits and Executive Compensation Practice Group Todd Solomon joins Domenic Rinaldi, owner and managing partner of Sun Acquisitions, for a recent episode of the M&A Unplugged Podcast to talk about multiemployer pension plans and discuss proactive steps owners can take to get ahead of future issues regarding pension participants. Access the podcast.

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How Advisers Serving MEPs and PEPs Can Be Conflicted

The most obvious potential conflict of interest for advisers setting up or serving pooled employer plans is if their practice is affiliated with the investments being selected—but there are other potential pitfalls to acknowledge. In a recent article, Erin Turley, a partner with McDermott Will & Emery, said a potential conflict of interest for advisers to PEPs would be if they were acting as either a 3(21) or 3(38) fiduciary to help select investments and were paid from plan assets. Access the article.

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The Biggest Benefits Rulings of 2020: Midyear Report

The US Supreme Court took up several Employee Retirement Income Security Act (ERISA) cases this term, handing down both a major loss and a substantial win to employees looking to sue their employers over retirement plan mismanagement. In a recent Law360 article, McDermott Partner Chris Nemeth discusses these decisions. "It's going to be really interesting to see how this plays out," said Nemeth. Access the article.

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The New Electronic Disclosure Rule is Here

Plan Sponsor Council of America hosted a webinar to discuss the new electronic disclosure rule for retirement plans from the US Department of Labor (DOL), which took effect July 26, 2020. The rule allows employers to deliver disclosures to plan participants primarily electronically, which the DOL says will reduce printing, mailing, and related plan costs by an estimated $3.2 billion over the next decade. Speakers included McDermott's Andrew Liazos, and the topics discussed included: New Safe Harbors, Effective Date and Scope of Rules Notice and Access Safe Harbor E-Disclosure Rule Q & A Access the presentation slides.

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