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Guest Article
(From the May 3, 2010 issue of Deloitte's Washington Bulletin, a periodic update of legal and regulatory developments relating to Employee Benefits.)
The Department of Labor's Spring 2010 Regulatory Agenda identifies three new proposed regulations that are being formulated: Improved Fee Disclosure for Welfare Plans, QDIA Target Date Disclosure, and Amendments to the Claims Procedure Regulation.
The Spring 2010 Regulatory Agenda for the Employee Benefits Security Administration (EBSA) builds on the items listed in its prior semi-annual agenda. This Agenda and information on the updated agenda items can be found on the Department's website at: www.dol.gov.
Improved Fee Disclosure for Welfare Plans
Proposed regulations are slated to be issued in March 2011 to amend the standards for the prohibited transaction exemption under ERISA § 408(b)(2) by which a plan is permitted to contract or make reasonable arrangements with a party in interest for office space, or legal, accounting or other services necessary for the establishment or operation of the plan, if no more than reasonable compensation is paid. According to the Agenda:
This amendment will ensure that plan fiduciaries of welfare plans are provided or have access to that information necessary to a determination of whether an arrangement for services is 'reasonable' within the meaning of the statutory exemption. (Emphasis added.) |
QDIA Target Date Disclosure
Proposed regulations are scheduled to be released in August 2010 to amend the qualified default investment alternative (QDIA) regulations, which provide relief from certain fiduciary responsibilities in participant-directed account plans where, in the absence of direction from the participant, the participant's account is invested in a QDIA. According to the Agenda:
This amendment will provide more specificity to fiduciaries as to the investment information that must be disclosed in the required notice to participants and beneficiaries. This amendment also will enhance the information that must be disclosed concerning target date, or similar age based, qualified default investment alternatives. (Emphasis added.) |
Amendments to the Claims Procedure Regulation
Proposed regulations are expected to be released in April 2011 to amend the claims procedure regulation under ERISA § 503, which requires the Department to promulgate procedures by which "adequate notice in writing to any participant or beneficiary whose claim for benefits under the plan has been denied." A "reasonable opportunity" to obtain a "full and fair review" must also be provided. The current regulation is almost ten years old. According to the Agenda:
This rulemaking is intended to strengthen, improve, and update the current rules governing the internal claims and appeals process. |
The claims review procedures will also be updated to comport with the requirements of the recently enacted Patient Protection and Affordable Care Act as amended, according to a separately released Regulatory Agenda Narrative, which can be found on the Department's website at: www.dol.gov.
Other Priorities: Worker Misclassification
The Department's Regulatory Agenda Narrative also announced that the EBSA will be working with the Wage and Hour Division to ensure that benefit plan issues are addressed in settlements with employers regarding the misclassification of employees as independent contractors. Employers will be required to resolve the benefit rights of misclassified employees in the settlement process.
The information in this Washington Bulletin is general in nature only and not intended to provide advice or guidance for specific situations.
If you have any questions or need additional information about articles appearing in this or previous versions of Washington Bulletin, please contact: Robert Davis 202.879.3094, Elizabeth Drigotas 202.879.4985, Mary Jones 202.378.5067, Stephen LaGarde 202.879-5608, Bart Massey 202.220.2104, Tom Pevarnik 202.879.5314, Sandra Rolitsky 202.220.2025, Deborah Walker 202.879.4955. Copyright 2010, Deloitte. |
BenefitsLink is an independent national employee benefits information provider, not formally affiliated with the firms and companies who kindly provide much of the content and advertisements published on this Web site, including the article shown above. |