In Su v. Fensler, No. 22-cv-01030, 2023 WL 5152640 (N.D. Ill. Aug. 10, 2023), the court granted the Department of Labor’s motion for a preliminary injunction to replace with an independent fiduciary the trustees of the United Employee Benefit Fund, who are accused of breaching their fiduciary duties by using Fund assets to engage
Department of Labor
Latest ERISA Developments on the IRA Rollover Fiduciary Rules, the DOL’s QPAM Exemption Amendment Proposal and the DOL’s ESG Rules
In addition to the excitement of the upcoming outdoor concert season, Proskauer’s lawyers are anxiously awaiting VERY different forms of entertainment:
- the next installment of the never-ending saga of U.S. Department of Labor (“DOL”) guidance on who is considered an investment advice fiduciary, including whether the fiduciary standard applies to advice on whether to take a rollover;
- finalization of the DOL’s QPAM Exemption amendment proposal; and
- resolution of court challenges to the DOL’s final “ESG” rules.
We discussed these developments at ERISAFest 2023. If you missed it, feel free to reach out to your Proskauer contact for a recording, and be sure to sign up next year!
DOL Proposes Self-Correction Option and Other Changes to Voluntary Fiduciary Correction Program
The U.S. Department of Labor (the “DOL”) proposed changes to its Voluntary Fiduciary Correction Program (the “VFCP”) in November for the first time since 2006. The most significant change is the addition of a self-correction option for delinquent deposits of participant contributions and loan repayments. The other changes clarify and expand certain existing aspects of…
DOL’s Final ESG Rules Reflect Warmer Attitude Toward ESG, But Maintain Bedrock Principle that Risk and Return Cannot Be Sacrificed
On November 22, 2022, the U.S. Department of Labor’s Employee Benefits Security Administration (the “DOL”) released final regulations (the “Final Rules”) that are intended to be more supportive of ERISA fiduciaries considering environmental, social, and governance factors (“ESG”) in investment decisions as compared to the Trump administration’s 2020 regulations (the “2020 Regulations”). The Final Rules…
Fifth Circuit Rules that DOL Advisory Opinion Is Subject to Judicial Review and Invalidates DOL Advisory Opinion on Health Insurance
On August 17, 2022, the U.S. Court of Appeals for the Fifth Circuit held that a Department of Labor (“DOL”) advisory opinion, which found that an insurance plan was not governed by ERISA, was unenforceable under the Administrative Procedure Act (“APA”). In doing so, the court ruled that the DOL advisory opinion constituted a “final…
DOL Proposes Significant Changes to the QPAM Exemption – What You Need to Know
On July 27, 2022, the U.S. Department of Labor (the “DOL”) issued notice of a proposed amendment (the “Proposed Amendment”) to Prohibited Transaction Class Exemption 84-14 (which is commonly referred to as the “QPAM Exemption”) that would (as described in more detail below) significantly amend certain of the exemption’s conditions, including:
- increasing the equity/net worth
…
Cryptocurrency in 401(k) Plans? Might be More Like “Crypto-nite,” Says the DOL in Its Latest Release
Kryptonite is a fictional substance that causes the mighty Superman to lose all his strength. According to a recent release from the U.S. Department of Labor Employee Benefits Security Administration (“DOL”), cryptocurrency might carry similar dangers for otherwise strong and healthy 401(k) plan accounts. That is, in DOL’s view, the benefits of cryptocurrency in 401(k)…
DOL Announces Temporary Enforcement Policy and Guidance to Address New Compensation Disclosure Requirements for Service Providers to Group Health Plans
On December 30, 2021, the U.S. Department of Labor (“DOL”) issued Field Assistance Bulletin No. 2021-03 (“FAB”), announcing its temporary enforcement policy for group health plan service provider disclosures under ERISA section 408(b)(2)(B).
The Consolidated Appropriations Act of 2021 (“CAA”) amended ERISA section 408(b)(2) to require “covered service providers”…
DOL’s Latest ESG Proposal: The More Things Change, the More They Stay the Same
On October 14, 2021, the U.S. Department of Labor’s Employee Benefits Security Administration (the “DOL”) published in the Federal Register a new proposed regulation (the “Proposed Rules”)[1] on fiduciary responsibility in selecting ERISA plan investments and exercising shareholder rights (proxy voting). The Proposed Rules reflect an effort to “warm” what the current DOL perceives…
U.S. Department of Labor Steps into the Cybersecurity Discussion
Formally wading into the cybersecurity discussion for the first time, on April 14, 2021, the U.S. Department of Labor (DOL) posted on its website a suite of new guidance, including Tips for Hiring a Service Provider with Strong Cybersecurity Practices, Cybersecurity Program Best Practices, and Online Security Tips for Participants and Beneficiaries.…