ML BeneBits

As the US Department of Labor (DOL) continues its investigation of retirement plans and their fiduciaries, we outline nine issues that the DOL has focused on in those investigations as a guide for plan fiduciaries in navigating fiduciary compliance, including top-of-mind areas such as cybersecurity and data privacy and ESG investing.

Based on new ERISA disclosure rules, now is a good time to review the compensation paid to your health plan’s consultant and broker. ERISA Section 408(b)(2)(B) requires brokers and consultants expecting $1,000 or more in direct and indirect compensation for services provided to group health plans to make detailed disclosures to the “responsible plan fiduciary” regarding their services and compensation.

One of the most common questions we receive from buy-side clients in mergers and acquisitions (M&A) is how to handle the 401(k) plan of the target company in the context of a stock purchase acquisition: Should they require the target to terminate the 401(k) plan prior to closing? Or should they keep the 401(k) plan in place for a short period of time following closing and then merge it into their own existing 401(k) plan?

In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), new rules directing national securities exchanges, including the New York Stock Exchange (NYSE) and Nasdaq Stock Market (Nasdaq), to adopt listing standards for compensation recovery (clawback) policies were announced on October 26, 2022 by the US Securities and Exchange Commission (SEC).

Much has been written, on ML BeneBits and elsewhere, about the US Department of Labor’s (DOL’s) so-called “ESG Rule” issued in November 2022 (the DOL Rule). The DOL Rule, in part, addressed the appropriate factors for an ERISA fiduciary to consider when making investment decisions, including the potential use of environmental, social, and governance (hence, ESG) factors in ERISA investment decision-making. But there was more to that rule than the ESG topics that seem to dominate the spotlight.

The COVID-19 public health emergency and presidential declaration of national emergency are intended to end on May 11 and the US government recently issued guidance on unwinding these emergency declarations.

The Internal Revenue Service (IRS) recently issued proposed regulations that would require forfeitures in defined contribution plans—i.e., unvested benefits forfeited by terminating defined contribution plan participants—to be used to offset employer contributions or pay reasonable plan administrative expenses, or otherwise be allocated to participants, by the end of the year following the year of forfeiture.

Both the US House of Representatives and the Senate passed a resolution to overturn the US Department of Labor’s so-called “ESG Rule” on February 28 and March 1, 2023, respectively. The ESG Rule has been a topic of debate as it sought to clarify the role that environmental, social, and governance (ESG) factors can play in fiduciary decision-making on behalf of retirement plans regulated by ERISA. This resolution is part of a larger effort to limit ESG investing at both federal and state levels.

The Employee Benefits Security Administration (EBSA) of the US Department of Labor (DOL) has continued to be active in civil and criminal enforcement investigations of ERISA’s fiduciary duties. This blog post details two recent updates concerning the DOL’s ERISA enforcement program.

The SECURE Act 2.0 makes changes to the US employer retirement plan system with respect to both single employer plans and to “applicable collectively bargained plans.” Applicable collectively bargained plans are defined in the statute as plans maintained pursuant to one or more collective bargaining agreements between employee representatives and one or more employers, i.e., multiemployer plans.