Many traditional defined benefit plans, such as final average pay plans, offer a lump sum distribution as an optional form of benefit. The amount of the lump sum distribution is sensitive to the applicable interest rate (calculated under Internal Revenue Code Section 417(e)) and varies inversely with the rate level. Higher interest rates result in smaller lump sums, and lower rates result in larger lump sums. Plans must update the applicable interest rate on a monthly, quarterly, or annual basis. With interest rates increasing rapidly, upcoming changes to the applicable interest rate may cause lump sum payments to decrease. In some cases, the decrease may be significant.
ML BeneBits
EXAMINING A RANGE OF EMPLOYEE BENEFITS
AND EXECUTIVE COMPENSATION ISSUES
AND EXECUTIVE COMPENSATION ISSUES
The US Securities and Exchange Commission (SEC) recently approved a proposed environmental, social, and governance (ESG) rulemaking for investment advisers and funds. This proposed rule and form amendments will impact SEC-regulated asset managers, but may also be of interest to investors, including ERISA plans, that consider ESG factors and/or invest in ESG funds.
The Internal Revenue Service (IRS) issued Notice 2022-24 on April 29 to provide the inflation-adjusted amounts for health savings accounts (HSAs) in calendar year 2023.
The Consolidated Appropriations Act of 2022, which was signed March 15, again permits first-dollar coverage for telehealth services without jeopardizing health savings account (HSA) eligibility, effective April 1, 2022, through December 31, 2022.
Cryptocurrency investing has experienced a tidal wave of popularity since the fabled genesis of Bitcoin in 2009. This growth has been fueled by “extreme” investment returns (despite “extreme” volatility) and innovative means of investing in cryptocurrency. As the wave of interest in cryptocurrency investing reaches the shores of 401(k) plans, including interest in cryptocurrency as a plan investment option or through plan brokerage windows, the US Department of Labor (DOL) warns 401(k) plan fiduciaries to exercise “extreme care” before providing plan participants with the opportunity to expose their retirement savings to cryptocurrency.
In the case of Texas Medical Ass'n, et al. v. US Department of Health and Human Services, et al., the US District Court for the Eastern District of Texas on February 23 invalidated portions of the second interim final rule (IFR) issued by the Departments of Health and Human Services, Labor, and the Treasury (the Departments) under the No Surprises Act.
The US Department of Labor (DOL) recently announced that it is seeking comment on the impact of climate change on retirement security and what actions, if any, the agency should take to protect retirement savings from such risks.
Join Morgan Lewis this month for the following programs on employee benefits and executive compensation.
The US Department of Labor (DOL) issued a final regulation (Final Rule) on December 29, 2021, updating the 2021 Form 5500 to reflect certain statutory changes included in the Setting Every Community Up for Retirement Enhancement Act (SECURE Act). The Final Rule focuses primarily on changes to accommodate pooled employer plans (PEPs) and other defined contribution multiple employer plans (MEPs).
The Department of Labor (Department) issued Field Assistance Bulletin No. 2021-03 (FAB) on December 30, 2021, announcing a temporary enforcement policy for group health plan service provider disclosures under ERISA Section 408(b)(2)(B).