The Consolidated Appropriations Act (the Act) was signed into law by the president on December 27, 2020, and includes significant health and welfare benefits provisions that affect group health plans and health insurance issuers. The Act is the most comprehensive single piece of legislation to impact group health plans since the Affordable Care Act.
In June, the US Department of Labor issued an information letter indicating that it will allow defined contribution retirement plans (such as 401(k) plans) to indirectly invest in private equity funds. While information letters are not binding, this new guidance creates a significant opportunity for plan sponsors to consider investment options that include private equity funds. However, it will be important for both plan sponsors and funds to carefully evaluate potential investments for compliance with fiduciary requirements.
In recognition of the difficulties faced by retirement plan sponsors, participants and beneficiaries due to the COVID-19 pandemic, new guidance extends the deadlines for notices and disclosures required by Title I of ERISA and extends deadlines for retirement plan participants and beneficiaries to submit benefit claims and benefit appeals. The new guidance also provides some welcome fiduciary relief for electronic disclosures, incomplete plan loan or distribution documentation, as well as delayed participant contributions and loan repayments.
The SECURE Act—the most significant piece of retirement plan legislation in more than a decade—is now law. Plan sponsors should immediately start considering how changes included in the SECURE Act could impact their retirement and health and welfare plans in 2020 and beyond.
The Treasury Department and the IRS recently finalized new hardship distribution rules applicable to defined contribution plans. Plan sponsors should prepare for operational changes to comply with the new regulations, including some beginning January 1, 2020.
The Ninth Circuit signaled that it might rehear Dorman v. The Charles Schwab Corp., where earlier this year it held that a mandatory arbitration provision required arbitration of an ERISA fiduciary-breach claim.
The Department of Labor (DOL) issued a proposed rule that, if finalized, would expand its existing guidance and liberalize rules for electronic disclosure of retirement plan notices under ERISA. The proposed rule, which sets forth a notice and access safe harbor, would permit electronic disclosure as the default method of delivery while permitting participants to opt out and continue to receive paper disclosures.
In the string of pension-plan related, actuarial equivalence lawsuits, the court in DeBuske, et al. v. PepsiCo, Inc., et al. recently handed down the first decision favorable to plan sponsors. The DeBuske court’s narrow decision may, however, have limited impact going forward.
In today’s high-stakes environment, in-house counsel and HR professionals are often on the frontlines, responding to headlines that threaten business and reputational objectives.
Join McDermott Will & Emery’s Employment and Employee Benefits practice groups at a half-day forum in our Chicago office on Oct. 10. This forward-looking program is designed to drive conversation around emerging trends to help employers craft their own narrative, instead of being held captive by it.
Federal Court Certifies Class in Multiple-Plan ERISA Challenge to Health-Plan and Retirement-Plan Fees
A Texas federal court certified a class in case brought by participants in one plan, and allowed those participants to represent participants in unaffiliated plans. The claims alleged that the defendants, who marketed and provided services to all of the plans, breached fiduciary duties by imposing excessive fees. See Chavez, et al. v. Plan Benefits Services, Inc., et al., No. AU-17-CA-00659-SS, United States District Court for Western District of Texas (Aug. 30, 2019).