Department of Labor (DOL) issued final regulations establishing new safe harbors for the electronic delivery of required retirement plan disclosures under ERISA. As background, retirement plan administrators must deliver required disclosures using methods that are reasonably calculated to ensure actual receipt of documents by plan participants. Under prior guidance from 2002, the DOL created a safe harbor electronic delivery method for required disclosures. But the 2002 safe harbor is only available with respect to employees…
The financial fallout from the outbreak of COVID-19 has unfortunately forced employers to turn to layoffs and furloughs. Many employers facing these decisions are looking for cost effective ways to mitigate the financial impact on affected employees. A supplemental unemployment benefit plan (“SUB Plan”) may be one way to assist employees while generating some cost savings for the company. A SUB Plan is a unique type of severance benefit plan that permits employers to supplement…
Now is the time to consider opportunities to manage global pension cost and risk. Many employers have already frozen their defined benefit plans and implemented defined contribution plans. Of course, such cost-reduction strategies may raise employment law issues in non-US jurisdictions because of the Acquired Rights Directive in EU jurisdictions and similar legislation elsewhere. In considering any such change, an employer has to consider how such change will be communicated to employees and employee representatives,…
Almost all plan documents contain some level of administrative provisions outlining how the plan is intended to operate (e.g., number of committee members, quorum, etc.). Plan sponsors often view these provisions as “boilerplate” with little or no meaning. In actuality, these are substantive provisions of the plan and failure to follow those provisions can have substantial consequences. The Consequences Failure to follow the terms of the plan document is a potential qualification issue under IRS…
The Fifth Circuit recently vacated the US Department of Labor’s (“DOL”) 2016 fiduciary rule that had expanded ERISA’s fiduciary definition to those providing investment advice for a fee to an ERISA plan or its participants. In light of the Fifth Circuit’s decision, the DOL has issued a temporary enforcement policy halting the enforcement of certain prohibited transaction claims against investment advice fiduciaries. Under Field Assistance Bulletin 2018-02, the DOL indicated that it will not pursue…
In a recent blog post we discussed the new disability claims procedure rules scheduled to go into effect on January 1, 2018. Earlier this year, as part of the administration’s direction to evaluate existing regulations to make them less burdensome, the Department of Labor (DOL) opened a comment period (through December 11, 2017) on whether the new disability claims procedure rule should be modified, rescinded or retained and raised the possibility of a delay. Based on the…
On June 1, 2017, the United States Court of Appeals for the Fifth Circuit, in Langley v. Howard Hughes Mgmt. Co., L.L.C., 694 F. App’x 227 (5th Cir. 2017), held that William Langley, a former golf club executive, was entitled to receive approximately $255,000 in severance pay, plus attorney’s fees. The Court found that the administrator’s interpretation of a severance plan, which resulted in denying the former executive’s claim for severance pay, was an abuse…
The IRS, DOL and PBGC recently provided various forms of relief intended to help employees and employers impacted by Hurricanes Harvey and Hurricane Irma. In this second blog post we review funding and reporting relief and take a brief look at Vacation/PTO donation programs. To read our first post on loans and hardship distributions from qualified plans, click here. Defined-Benefit Plan Funding Relief IRS Notice 2017-49 provides single defined-benefit plan sponsors or employers covering more…
Although to date, the new administration has not been successful in moving forward its legislative agenda, it has aggressively pursued its goal of reducing the regulatory burden on American businesses. At the 2017 Global Equity Organization National Equity Compensation Forum, Baker McKenzie will be discussing the latest regulatory and legislative developments in executive compensation. Some of the hottest topics on every company’s mind we will be addressing include: The Department of Labor Fiduciary Rule -…
Pursuant to Department of Labor guidance, a “statement of investment policy” provides fiduciaries responsible for plan investments with written guidelines or general instructions concerning various types of investment management decisions. Typically, an investment policy will establish criteria and procedures for the selection, monitoring, removal, and replacement of plan investments. Unlike the “funding policy” required for plans under Section 402(b) of ERISA, there is no requirement under ERISA that a plan have a written investment policy…