As we wrote in a previous On the Subject, the Ninth Circuit Court of Appeals had signaled that it might rehear its August 2019 decisions in Dorman v. The Charles Schwab Corp., in which the Court compelled arbitration of ERISA class-action claims relating to a 401(k) plan. After ordering additional briefing, however, the Ninth Circuit denied the plaintiff’s petition for rehearing, leaving the Court’s decisions unchanged and requiring the plaintiff to arbitrate his ERISA breach-of-fiduciary-duty claims.
Recently, the Department of Labor (DOL) published final rules clarifying the circumstances under which “bona fide” groups or associations of employers and professional employer organizations (PEOs) may be permitted to sponsor single defined contribution multiple employer plans (MEPs). Concurrently, the Internal Revenue Service (IRS) published proposed rules detailing an exception to the “one bad apple” rule for defined contribution MEPs, which rule provides that the failure of one employer to meet established qualification requirements results in the disqualification of the MEP for all participating employers.
The Internal Revenue Service (IRS) expanded the temporary relief for frozen defined benefit plans to include nondiscrimination requirements relating to benefits, rights and features, available for plan years beginning before 2021. The expanded relief enables frozen pension plans to satisfy the nondiscrimination requirements that apply to benefits, rights or features.
The First Circuit issued a decision holding that two private equity funds involved in a case are not required to pay for the withdrawal limit of a portfolio company. Despite the limited victory, the guiding rule with respect to defined benefit plan and multiemployer plan pension liabilities remains “buyer beware,” as applicable law continues to provide that such liabilities may become liabilities of private equity funds under certain circumstances.
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.
Recently the Internal Revenue Service (IRS) and the Social Security Administration announced the cost-of-living adjustments to the applicable dollar limits on various employer-sponsored retirement and welfare plans and the Social Security wage base for 2020. In the article linked below, we compare the applicable dollar limits for certain employee benefit programs and the Social Security wage base for 2019 and 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.
The IRS recently issued guidance on the tax treatment, withholding and reporting for required distributions from tax-qualified retirement plans. Plan sponsors should contact their retirement vendors and trustees to ensure that they implement the tax requirements of the new guidance appropriately for their tax-qualified retirement plans.
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.
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