A federal district court in Florida sent a proposed ERISA breach of fiduciary duty class action to individual arbitration on the basis of a plan arbitration clause that allowed for individual relief and plan-wide injunctive relief. The case is Holmes v. Baptist Health South Florida, Inc., No. 21-cv-22986, 2022 WL 180638 (S.D. Fla. Jan.
403(b) Plans
The Supreme Court Declines to Establish Pleading Standard for Defined Contribution Plan Excessive Fee Litigation
By Myron Rumeld, Tulio Chirinos & Daniel Wesson on
To the disappointment of many in the ERISA community, the Supreme Court issued a six-page opinion on January 24th that declined to opine on most of the issues that were before the Court in Hughes v. Northwestern University, No. 19-1401 (U.S. Jan. 24, 2022). In a unanimous opinion authored by Justice Sotomayor, in which…
Tenth Circuit Addresses Damages for Excessive Recordkeeping Fee Claims
By Myron Rumeld & Anastasia Gellman on
One of the multitude of recent cases challenging the recordkeeping fees of 401(k) plans recently made its way to the Tenth Circuit Court of Appeals. Ramos v. Banner Health, No. 20-1231, — F.3d —- (10th Cir. June 11, 2021). Following a bench trial that resulted in a determination that the fiduciaries of Banner Health’s…
SEC Cracks Down on Retirement Fund Advisers’ Undisclosed Compensation and Conflicts
By Russell Hirschhorn on
In August 2020, the SEC issued two orders against VALIC Financial Advisors Inc. (VFA) related to VFA’s management of 403(b) and 457(b) plans. These matters arise out of two of the SEC’s enforcement initiatives, the Teachers and Military Service Members’ Initiative and the Share Class Selection Disclosure Initiative. VFA is a registered investment adviser and…
Seventh Circuit Upholds Dismissal of 403(b) Plan Lawsuit Against Northwestern University in Apparent Split with Third Circuit
Since the beginning of 2016, the ERISA plaintiffs’ bar has filed nearly two dozen complaints targeting university-sponsored 403(b) plans. The majority of these lawsuits assert that plan fiduciaries breached their duties and engaged in prohibited transactions by (1) “packing” a plan with too many investment options that underperformed and were more expensive relative to other…
D.C. Circuit Rules that ERISA Plan Participant’s Release Extends to Fiduciary Breach Claims On Behalf of The Plan
By Tulio Chirinos on
On March 24, 2020, the D.C. Circuit Court upheld a district court ruling that an ERISA plan participant’s broad release of claims includes breach of fiduciary duty claims against ERISA plan fiduciaries, notwithstanding the release’s carve-out for any “claims for vested benefits.” The ruling extinguishes a participant’s class action claims under ERISA sections 502(a)(2) and…
Final Hardship Distribution Regulations, Part Three: New Disaster Relief and Expanded Sources Available for Hardship Distributions
By Paul M. Hamburger & Jennifer Rigterink on
The IRS recently released final regulations making a number of changes to the rules applicable to hardship distributions from 401(k) and 403(b) plans. Concluding our three-part series on the final regulations, this blog entry will focus on the following changes to the hardship distribution rules: (1) modifications to the list of safe harbor expenses that…
The Deadline for 403(b) Sponsors to Review Plan Documents for Compliance is Approaching
By Steven Weinstein on
Section 403(b) plans must be maintained pursuant to a written plan document that meets detailed requirements set forth in IRS regulations. If a plan contains a defect as to form (e.g., a provision does not comply with the regulations or a required provision is missing), the plan can be at risk for losing its qualification…
Final Hardship Distribution Regulations, Part Two: Implementation Considerations
By Paul M. Hamburger & Jennifer Rigterink on
As discussed in our prior blog entry, the IRS recently released final regulations making a number of significant changes to the rules applicable to hardship distributions from 401(k) and 403(b) plans. As part of our continuing series on these final regulations, this blog entry will focus on two specific issues: (1) the elimination of…
Final Hardship Distribution Regulations, Part One: Key Changes and Deadlines for Plan Sponsors
By Paul M. Hamburger & Jennifer Rigterink on
Last week, the Department of Treasury and the IRS issued final regulations regarding hardship distributions from 401(k) and 403(b) plans. The final regulations respond to comments based on earlier proposed regulations and make a number of significant changes to the existing IRS rules that apply to hardship distributions.
Given the detailed material in the regulatory…