Employee Benefits & Executive Compensation Blog

The View from Proskauer on Developments in the World of Employee Benefits, Executive Compensation & ERISA Litigation

Category Archives: 401(k) Plans

Subscribe to 401(k) Plans RSS Feed

The Bipartisan Budget Act’s Impact on Retirement Plans

On Friday, February 9, 2018, Congress passed, and the President signed, the Bipartisan Budget Act of 2018 (the “Budget Act”). The Budget Act contains a number of provisions that affect qualified retirement plans.  Plan sponsors should consider the impact of the Budget Act on their retirement programs. Hardship Withdrawals. The Budget Act relaxes the rules … Continue Reading

Fidelity Prevails In ERISA Float Litigation

The First Circuit joined the Eighth Circuit in finding that Fidelity’s practice of earning overnight “float” interest on the cash paid out to 401(k) participants redeeming shares in mutual funds did not violate ERISA’s duty of loyalty or prohibition on self-dealing.  In so holding, the Court observed that under the terms of the trust agreements … Continue Reading

IRS Significantly Liberalizes Permitted Mid-Year Changes to Safe Harbor Plans

On January 29, 2016, the IRS issued Notice 2016-16 that provides guidance on mid-year changes to a safe harbor plan under sections 401(k) and 401(m) of the Internal Revenue Code. The guidance provides that a mid-year change either to a safe harbor plan or to a plan’s safe harbor notice does not violate the safe … Continue Reading

White House Budget Recommends Elimination of in-Plan Roth Rollovers of After-Tax Contributions

As reported here, the Internal Revenue Code currently permits a plan design that allows plan participants to convert non-Roth after-tax contributions to Roth contributions through in-plan Roth rollovers.  This design would allow a participant to maximize deferrals to a defined contribution plan while limiting future tax liability.  However, among the White House’s Fiscal Year 2016 … Continue Reading

In-Plan Roth Rollovers and After-Tax Contributions: Maximizing Deferrals with Limited Future Tax Liability

Please refer to our February 26, 2015 blog post for potential legislative developments regarding the ability to convert after-tax contributions to Roth contributions. Plan sponsors seeking to provide employees with the ability to make after-tax contributions to a 401(k) plan may be interested in adding, along with the common Roth contribution feature, non-Roth after-tax contribution and … Continue Reading

401(k) Plan Participant Waived ERISA Stock-Drop Claim

The D.C. Circuit affirmed the decision of a district court that Plaintiff Patrick Russell, a 401(k) plan participant, had knowingly waived his right to assert an ERISA stock-drop claim based on, among other things, the alleged imprudence of maintaining an employer stock fund as an investment option.  Russell argued that the district court erred by … Continue Reading

SunTrust Plan Participants’ Stock-Drop Claims Tossed A Second Time

A federal district court in Georgia recently dismissed a suit brought by participants in the SunTrust Bank 401(k) savings plan alleging fiduciary breaches based on defendants’ decision to continue permitting investment in SunTrust stock while its value declined during the subprime mortgage crisis. The court had previously granted in part and denied in part SunTrust’s … Continue Reading

Electronic Self-Certification for Hardship Distributions May Be Insufficient, IRS Says

The IRS recently has reminded plan sponsors to verify and document that hardship distributions comply with their plan document and the law, according to a recent posting by IRS Director of Employee Plans Examinations Monika Templeman on the IRS website, “Examination Tips for Hardship Distributions.” In some cases, allowing participants to apply for loans or … Continue Reading

No Fiduciary Status For 401(k) Plan Service Provider

John Hancock Life Insurance Company is the most recent 401(k) plan service provider to prevail in a case by the plaintiffs’ bar asserting ERISA fiduciary breach claims based on allegations that it charged excessive 401(k) plan fees and received excessive revenue sharing payments.  Santomenno v. John Hancock Life Ins. Co., No. 2:10-cv-01655 (WJM), 2013 WL … Continue Reading