As part of our continuing series on SECURE 2.0, signed into law December 29, 2022, this post focuses on significant changes for section 403(b) tax-sheltered annuity plans (“403(b) plans”). 403(b) plans are similar to 401(a) tax-qualified defined contribution plans but sponsored by public schools or non-profit entities and subject to unique requirements under the
SECURE 2.0 Delivers New Rules for Correcting Retirement Plan Errors
As part of our ongoing series on SECURE 2.0, this post discusses three significant changes to corrections of common retirement plan errors: (1) New rules for correcting overpayments, (2) expansion of the Self-Correction Program under the IRS’s Employee Plans Compliance Resolution System (“EPCRS”) to cover most inadvertent errors, and (3) making permanent the current
[Podcast]: Key ERISA Fee and Investment Litigation Developments and the Impact of Hughes v. Northwestern University
In this episode of The Proskauer Benefits Brief, Myron D. Rumeld, partner and co-chair of Proskauer’s ERISA Litigation group and senior associate Tulio D. Chirinos, review the current state of affairs with respect to the litigation challenging the fees charged and investments offered in defined contribution plans; and The Supreme Court’s recent decision in Hughes v. Northwestern University where the court reversed and remanded the Seventh Circuit’s decision affirming dismissal of a 403(b) plan excessive fee litigation.
Back to Basics: IRS Issues Ruling About Failure to Cash a Distribution Check from a Qualified Retirement Plan
In Revenue Ruling 2019-19, the IRS answered three basic questions about the consequences of an individual’s failure to cash a distribution check from a qualified retirement plan. Uncashed checks arise in a number of contexts and questions on the taxation of uncashed checks should be carefully considered.
In the hypothetical posed by the IRS, Individual
Third Circuit Resuscitates Claims Against University 403(b) Plan Fiduciaries
Over the past several years, the ERISA plaintiffs’ bar has targeted university-sponsored 403(b) plans, arguing that the plan fiduciaries breached their fiduciary duties and engaged in prohibited transactions in connection with offering certain investment options and the administrative fees associated with such plans. Among other things, they have argued that the plan fiduciaries offered too
Ninth Circuit Rejects Bid To Arbitrate ERISA Plans’ Claims
The Ninth Circuit held that employees’ agreements to arbitrate all claims the employees may have did not extend to claims brought on behalf of two ERISA plans under ERISA § 502(a)(2). In so ruling, the Court explained that the employees could not agree to arbitrate claims on behalf of the plans in individual employment contracts
Third Circuit Analyzes Standing for ERISA Plan Management Claims
A recent Third Circuit decision reinforced the need for ERISA plaintiffs to plead injury-in-fact to establish Article III standing. In Krauter v. Siemens Corp., No. 17-1662, 2018 WL 921542 (3d Cir. Feb. 16, 2018), the plaintiff was a beneficiary of four pension plans that had been sponsored by Siemens. After the Plaintiff’s retirement, Siemens
PBGC Issues Final Regulations Regarding Rollovers from Defined Contribution Plans to Pension Plans
The PBGC has recently initiated efforts to enhance retirement security for Americans by promoting lifetime income options (i.e., annuitized benefits). As part of these efforts, as well as those of the IRS and U.S. Department of Labor, the PBGC issued final regulations regarding the treatment of rollovers from defined contribution plans to defined benefit plans for purposes of the PBGC’s statutory guarantees under Title IV of ERISA. The PBGC regulations are intended “to encourage people to get lifetime income by removing barriers to moving their benefits from defined contribution plans to defined benefit plans.” The guidance also “removes the fear that the amounts rolled over would suffer under guarantee limits should [the] PBGC step in and pay benefits.”
New Guidance on Locating Missing Participants for Terminated Defined Contribution Plans
On August 14, 2014, the U.S. Department of Labor (DOL) provided new guidance to plan fiduciaries of terminated defined contribution plans for locating missing and unresponsive participants in order to distribute their benefits. The guidance comes in the form of Field Assistance Bulletin (FAB) No. 2014-01, which replaces FAB No. 2004-02. As discussed below, the guidance may also prove useful in finding missing and unresponsive participants in other circumstances as well.