There have been significant developments that will impact the future of US Department of Labor regulations and litigation related to employee stock ownership plans (ESOPs). Ted Becker and Julian André recently presented a webinar for the National Center for Employee Ownership and shared what ESOP fiduciaries, ESOP company directors, and employees involved with ESOPs need to know about these changes.
Employee Retirement Income Security Act class action lawsuits filed earlier this year against the group health plans of two large US employers underscore the importance of implementing formal welfare benefit plan governance structures that include fiduciary committees comparable to the governance structures employer sponsors of retirement plans routinely adopt.
This recent article, published by the Society for Human Resource Management, offers plan sponsors a list of practical action items to consider to help protect themselves from risks related to the fiduciary governance of their health and welfare plans.
The Internal Revenue Service (IRS) has announced plans to initiate dozens of new audits this spring in an attempt to ground high-flying taxpayers and their personal usage of corporate aircrafts. These audits will focus primarily on “highest risk” corporations and large partnerships, IRS Commissioner Danny Werfel stated. Werfel added that audits of high-income earners will likely follow to “ensure that high-income groups are not flying under the radar.”
A civil enforcement action against a healthcare company reveals a straightforward lesson: It’s never too late for leaders to make the right decision. In this Forbes article, Michael Peregrine discusses the government’s complaint and offers takeaways for corporate boards.
The Internal Revenue Service recently announced the cost-of-living adjustments to the applicable dollar limits for various employer-sponsored retirement and welfare plans for 2024. Certain health and welfare plan limits have not yet been released.
Most of the dollar limits that are subject to adjustment for cost-of-living increases will increase for 2024. The Social Security Administration released separate adjustment amounts.
The US Securities and Exchange Commission (SEC) recently approved amendments to clawback policy listing standards proposed by the New York Stock Exchange (NYSE) and the Nasdaq Stock Market LLC (Nasdaq) that extend the effective date of the exchanges’ respective listing standards to October 2, 2023. Issuers listed on the NYSE and Nasdaq now have until December 1, 2023 (60 days from the new effective date) to comply with their respective exchange’s listing standards.
On January 25, 2023, the Delaware Court of Chancery held, for the first time, that the rationale for a duty of oversight (Caremark duty) owed by directors of Delaware corporations applies equally, if not to a greater degree, to officers. In re McDonald’s Corp. Stockholder Derivative Litigation, C.A. No. 2021-0324-JTL (Del. Ch. Jan. 25, 2023).
However, this officer duty of oversight will be more context-driven than the duty owed by directors. Some officers, like a chief executive officer or a chief compliance officer, will have company-wide oversight duties while other officers with more constrained areas of responsibility will have a more constrained duty of oversight (i.e., establishing information reporting systems and upward reporting of red flags will be based on the particular officer’s responsibilities and authority). Additionally, as with a director’s duty of oversight, oversight liability for officers will require a showing of bad faith, meaning a plaintiff will need to establish that the officer consciously failed to make a good faith effort to establish information reporting systems or consciously ignored red flags.
A Massachusetts federal judge recently gave a major win to Schneider Electric in an employee benefits lawsuit brought by former workers. According to this Law360 article, seven former Schneider Electric employees accused the company and its investment manager of running afoul of the Employee Retirement Income Security Act of 1974 when they replaced well-performing funds with those of the investment manager. McDermott Partners Sarah E. Walters, Jennifer B. Routh and Margaret H. Warner represented Schneider Electric.
What do retirement plan professionals and participants need to know about the recently passed SECURE 2.0 Act of 2022? In this webinar replay, McDermott’s Employee Benefits team discusses the many changes to retirement plans and individual retirement accounts, including the key changes for 401(k), 403(b) and defined benefit plans as well as other changes impacting health and welfare plans. Discussion topics include the following:
Join partners from McDermott’s Employee Benefits team on Wednesday, January 25, 2023, as they discuss the impact of the recently passed SECURE 2.0 Act of 2022. With over 90 changes to retirement plans and individual retirement accounts (IRAs), this webinar will highlight the key changes for 401(k) and 403(b) plans and defined benefit plans, as well as changes in the Consolidated Appropriations Act, 2023 impacting health and welfare plans.
Topics Include:
To learn more, read the full On the Subject here.
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