In 2017, several private universities were hit with ERISA class actions alleging various breaches of fiduciary duty and prohibited transactions—including claims that these universities’ defined contribution plans charged unreasonable recordkeeping costs. One such university was Cornell in the case of Cunningham v. Cornell University.
ML BeneBits
EXAMINING A RANGE OF EMPLOYEE BENEFITS
AND EXECUTIVE COMPENSATION ISSUES
AND EXECUTIVE COMPENSATION ISSUES
Join Morgan Lewis lawyers this summer for programs on employee benefits and executive compensation.
When private equity investment transactions close, management and private equity investors are off to the races—generally aligned on strategic and financial objectives. However, as market conditions and the economic climate shift, key parties may become misaligned and management incentive plans (MIPs) could become underwater or ineffective.
The letter of intent has been executed. The due diligence is done. The purchase agreement is signed. The money has been wired. The deal has closed. You’re done—back to business as usual! Think again. For the folks responsible for employee benefits matters, whether it be the CEO, CFO, comptroller, or human resources team, the real work after a merger or acquisition may be just beginning.
With the expiration of COVID-19 pandemic relief suspending loan payments and interest accruals on federal student loans (interest accruals resumed September 1 and loan payments are set to resume in October), now is a good time for employers to take a closer look at the student loan matching contribution feature of the SECURE 2.0 Act of 2022 (SECURE 2.0).
The Internal Revenue Service (IRS) recently issued IR-2023-144 (the Notice), warning stakeholders of compliance issues associated with employee stock ownership plans (ESOPs) related to the tax liability of high-income taxpayers. Although it is unclear what prompted the Notice, the IRS’s intent is clear—it has a new enforcement focus on ESOP-related tax avoidance, particularly with respect to S corporation ESOPs.
The US Department of Labor (DOL) released an extensive regulatory agenda in January 2023 laying out the agency’s priorities for the year. The DOL has faced scrutiny from Congress this legislative session, demonstrated most recently by the congressional repeal of the DOL’s so-called “ESG Rule” in early March. President Joseph Biden’s veto of that repeal on March 20, 2023, rescued the ESG Rule from the congressional chopping block. Luckily for the DOL, however, many of the other 70-plus priority items for 2023 appear to be less controversial. Below we summarize a few of those items that have direct relevance to Employee Retirement Income Security Act (ERISA) regulated retirement plan sponsors.
The Federal Trade Commission (FTC) announced a notice of proposed rulemaking on January 5, 2023, that would ban employers from entering into or maintaining noncompete clauses with their workers. The proposal was issued in response to President Joseph Biden’s July 9, 2021 executive order and related statements calling on the FTC to ban or limit employment contract restrictive covenants that restrict workers’ freedom to change jobs. See our LawFlashes discussing the proposal and frequently asked questions.
As 2022 comes to a close, we're resharing our top five most-read blog posts of the year. Thank you for your engagement, and we look forward to providing you with more content in 2023!
The Affordable Care Act (ACA) requires non-grandfathered group health plans (and insurers) to provide coverage for certain preventive health services for all adults, women, and children. Preventive services covered under the law must be provided to individuals without cost sharing, i.e., without the requirement to pay a copayment, coinsurance, deductible, or other cost.