The Department of Labor announced increased penalties for employee benefit plans under ERISA. The increases generally apply to penalties that involve employee benefit reporting and disclosure failings if the penalty is assessed after January 2, 2018, and if the violation occurred after November 2, 2015. We’ve compiled a resource outlining the ERISA penalty amounts assessed for violations on or before January 2, 2018, and those amounts assessed after January 2.
Make a New Year’s resolution to improve the fiduciary governance practices for your employee benefit plans. Join McDermott lawyers Brian Tiemann and Finn Pressly for a refresher course on your fiduciary duties, an overview of common pitfalls and best practice tips to keep your plan administration on track in 2018. We will also provide an update on the Department of Labor’s expansion of the fiduciary rule and what the latest extension of the special transition period means for plan sponsors and service providers.
Date: Friday, January 5, 2017
Time: 10:00 – 10:45 am PST
11:00 – 11:45 am MST
12:00 – 12:45 pm CST
1:00 – 1:45 pm EST
Mark your calendars for the first Friday of every month! McDermott’s Employee Benefits Group will be delivering timely topics in our “Fridays With Benefits” monthly webinar series.
The Internal Revenue Service (IRS) and the Department of Labor (DOL) conduct different types of benefit plan audits, such as retirement plans and health and welfare plans, and for various reasons. In a presentation, Jeffrey Holdvogt and Maggie McTigue discuss IRS and DOL audit triggers, the process for each and what to do if your plan is audited. They also discuss the top audit issues and actionable steps companies can take to avoid audits and compliance issues.
In a recent webinar, Jake Mattinson and Sarah Raaii discussed the practices that benefits professionals can adopt to add value to their organizations and avoid common mistakes. Jake and Sarah discussed recommended practices for ERISA benefit claims and inquiries, how to review plan compensation definitions and payroll codes, best practices for corrections using the Voluntary Fiduciary Correction Program (VFCP), and the importance of document retention. The webinar is part of the larger Benefits Emerging Leaders Working Group, a group that meets to discuss key benefit issues and trends and provides networking opportunities aimed at connecting tomorrow’s benefit leaders with a broad network of professionals.
Offering employer stock in a 401(k) plan investment lineup can seem like a win-win situation. It can enable employees to become company owners—real, skin-in-the-game, participants in their employer’s economic future—through a simple deferral election. The U.S. Supreme Court has even recognized the value of employer stock funds, confirming that Congress sought to encourage their creation through provisions and standards contained in the Employee Retirement Income Security Act of 1974 (“ERISA”).
However, in the wake of a series of high-profile employee lawsuits seeking recovery against Enron, Lehman Brothers, and other employers for losses from 401(k) investments in employer stock, such funds can—almost as easily—seem a recipe for disaster. This article examines the quandary that employer stock funds pose for plan sponsors, who must navigate ERISA’s careful balance of (1) ensuring fair and prompt enforcement of employee rights under employer-provided retirement plans while (2) encouraging employer creation of these plans.
Originally published in Bloomberg Law, May 25, 2017
With approximately 68 million US employees without access to a retirement savings plan through an employer, there has been increased movement by states to sponsor retirement type arrangements for private sector employees. Partner Andrew Liazos presented “State-Run Retirement Plans – What Labor Allowed” discussing insights and strategies for retirement, health and executive compensation plans. He addresses the various state retirement plan approaches, such as auto enrollment IRAs, state marketplaces, prototype plans and Medical Expenditure Panel Surveys.
In a recent presentation, McDermott attorneys discussed how to prepare responses for a Department of Labor (DOL) investigative audit of a company’s health and welfare plan, including required documentation and procedures, DOL audit triggers, and key legal provisions that employers and employee benefits advisers should monitor regularly and review prior to responding to a DOL audit notification. One DOL survey found that nearly one-third of all health and welfare plan audits resulted in penalties in excess of $10,000 per examination. Employers and employee benefits advisers should evaluate and anticipate DOL audit risks and preemptively remedy potential defects to avoid painful and expensive assessments.
Health system employers should make sure they are familiar with three key employee benefit issues: (1) the new Department of Labor (DOL) fiduciary rule that currently becomes effective April 10, 2017 (but may be delayed in the near future under the new administration); (2) recent excessive fee litigation filed against universities (and now health care systems such as Essentia Health) maintaining Code Section 403(b) fee plans; and (3) new Code Section 457(f) regulations. Each of these issues present risks and opportunities for health systems in 2017.
On November 1, 2016, the US Department of Labor (DOL) released advance copies of the 2016 Form 5500 and Form 5500-SF annual return/report and their related schedules and instructions. Information copies of the 2016 forms, schedules and instructions are available on the DOL’s website. The advance copies were released for informational purposes only, and may not be used for filing. Official versions of Form 5500 and Form 5500-SF should be posted on the DOL’s website early next year.
On July 11, 2016, the Department of Labor (DOL) and Internal Revenue Service (IRS) announced a proposal to implement significant changes to the forms and regulations that govern annual employee benefit plan reporting on Form 5500. The proposed changes, which were published in the Federal Register on July 21, 2016, would considerably increase the annual reporting obligations for nearly all health and welfare plans. The changes would also have a considerable impact on annual retirement plan reporting obligations. For more information about the effect of the proposed changes on retirement plan sponsors, see Proposed Changes to Form 5500 Reporting Requirements May Have Significant Impact on Retirement Plan Sponsors.
The DOL is seeking written comments on the proposed changes, which must be provided by October 4, 2016. The revised reporting requirements, if adopted, generally would apply for plan years beginning on and after January 1, 2019.
Read the full article here.