Search the News Archive

Litigation Over Proxy Statement Disclosure -- Another Update

Attorney Michael Melbinger, author of the linked article, writes to contribute "some (hopefully) useful advice to companies that have not yet filed their proxy statements and are seeking approval of a new or amended plan stock plan (including those seeking only approval of additional authorized shares or performance goals for 162(m)). In a measured response to the plaintiffs' claims in many of these lawsuits and letters, [Winston & Strawn has been] suggesting additional disclosure regarding dilution and other data that would allow that figure to be calculated, including the following tweaks (to the extent not already in the disclosure): ..."

The Duty of Advisors to Investigate Their Independence as to the Compensation Committee

"Inquiring minds want to know: 'Mike, how is Winston figuring out how to test for a "business or personal" relationship between the Firm and any director or executive officer of the client?' The answer is that law firm (and most other professional service firms) tend to have a good idea of all of their connections and relationships within a client."

A Turning Point for Proxy Advisors: JPMorgan's AI Pivot Amid Intensifying Regulatory Scrutiny

"The increased attention from regulators, lawmakers, and major market participants such as JPMorgan suggests that the role and influence of these firms are under unprecedented scrutiny. While companies should continue to follow established guidelines and best practices, and utilize market trends to inform their proxy voting and governance strategies, it is equally important to remain adaptable."

Group Health Plans Must Update HIPAA Notices by February 16 to Address New SUD Privacy Rules

"Plan sponsors should determine if and how the new Part 2 requirements apply to their group health plan and review their NPPs accordingly. Plan sponsors should also review whether and how PHI and SUD records travel through their systems and consult with any vendors that handle SUD records to ensure compliance. This may also require updates to business associate agreements for vendors that handle SUD on behalf of the group health plan."

DOL Amicus Briefs Support Curbing Wave of ERISA Litigation

"Amicus briefs are not binding law, but neither are they merely they symbolic. Until regulatory guidance is issued, some key takeaways include the following: [1] A signal to the plaintiffs' bar ... [2] A brief from the Solicitor General on behalf of the DOL can shape outcomes, even if the Supreme Court ultimately does not take the case.... [3] The DOL's new posture suggests that process and judgment should get more deference.... [4] The briefs telegraph where the DOL is heading on formal rulemaking."

Forfeiture Litigation Update, January 2026

"Where district courts have ruled on motions to dismiss forfeiture-related claims, to date they have largely sided with defendant-employers ... [F]orfeiture claims have been dismissed in at least 25 cases and have been allowed to survive in at least six cases.... Appeals are currently pending in the Third, Eighth, and Ninth Circuits, and Bank of America recently requested permission for a Fourth Circuit appeal. The Ninth Circuit is poised to be the first to rule."

New Executive Order Targets Proxy Advisory Firms: Key ERISA Implications

"Plan fiduciaries should monitor the potential reclassification of proxy advisors as ERISA fiduciaries. Such a change would require proxy advisors to demonstrate that their recommendations are based solely on participants' financial interests, potentially increasing their compliance and litigation risks. This uncertainty may also accelerate the trend of companies ... developing in-house proxy analysis solutions to replace external advisors."

IRS Notice Details Expanded Availability of Health Savings Accounts Under OBBBA

"The guidance that enrolling in a [Direct Primary Care Arrangement (DPCA)] will not cause individuals to lose HSA eligibility is helpful. However, questions remain regarding how DPCA offerings can be structured so that their services can be reimbursed from an HSA, and what services may be treated as primary care services. In addition, [Notice 2026-5] provides some flexibility with respect to individuals enrolling in bronze and catastrophic plans off-Exchange or through an ICHRA."

2026 Proxy Season: A Look Ahead to Executive Compensation Issues and Considerations

"As the 2026 proxy season approaches, public companies and their boards are navigating a rapidly evolving executive compensation landscape.... This alert outlines key considerations for public companies and their compensation committees as they prepare for the 2026 proxy season and related compensation decisions"

IRS Finalizes Catch-Up Contribution Regulations: Takeaways for Plan Sponsors

"How will the payroll system calculate the FICA wage threshold of $145,000 for purposes of identifying employees subject to the new Roth catch-up mandate? ... Does the 401(k) plan provide for a 'spillover' catch-up election? Or does the plan require participants to make a separate catch-up election? ... Will the employer [1] implement a deemed Roth catch-up election, or [2] cancel existing elections and require that participants subject to the Roth catch-up mandate make a new Roth catch-up contribution election? ... Communications will be needed to educate employees ... Amendments are generally required by December 31, 2026, but it may be advisable to record the design decisions as they are made."

CalPERS Seeks to Bar Law Firm in San Bernardino's Bankruptcy

"The $265.5 billion California Public Employees' Retirement System ... accused the law firm of Winston & Strawn of being 'deceptive' by hiring several key lawyers who had been working for the pension fund in the bankruptcies of the California cities of San Bernardino and Stockton. Winston & Strawn represents creditor National Public Finance Guarantee Corp., which opposes CalPERS in the two bankruptcies[.]"

New Executive Order Directs Agencies to Facilitate 401(k) Access to Private Equity, Cryptocurrency, and Other Alternative Investment

"As plan fiduciaries are approached by their recordkeepers and investment consultants about possibly adding alternative assets to their DC plans, they will want to [1] consider the key elements of the 2020 Information Letter and the 2021 Supplement.... [2] Monitor forthcoming guidance from the DOL, SEC, and IRS ... [3] Identify experts that can help plan fiduciaries assess whether these alternative assets are right for DC plan participants ... [4] Review the current Investment Policy Statement and governance frameworks ... [5] Evaluate litigation risk."

Health and Welfare Developments for Plan Sponsors

"[1] The One Big Beautiful Bill Act ... [2] New York City Paid Prenatal Leave ... [3] [HHS] Marketplace Integrity and Affordability Final Rule ... [4] [IRS] Revenue Procedure 2025-25: [ACA] Affordability ... [5] IRS Revenue Procedure 2025-26: Employer Shared Responsibility Payments (ESRPs).... Many of [these changes] provide plan sponsors with increased flexibility to optimize benefits offered to their eligible employees and their dependents.... Plan sponsors should review their offerings now to implement any changes before the beginning of the 2026 plan year."

Supreme Court to Address Timing of Actuarial Assumptions in Determining Multiemployer Plan Withdrawal Liability

"If the Court affirms the D.C. Circuit, it may result in less predictable cost estimates for employers. Employers have the right to request estimates of their withdrawal liability annually, but the usefulness of those estimates in making business decisions is diminished when plans and actuaries are able to retroactively change assumptions." [M & K Employee Solutions, LLC v. Trustees of the IAM National Pension Fund, No. 22-7157 (D.C. Cir Feb. 9, 2024; cert. pet. granted Jun. 30, 2025 No. 23-1209)]

Long-Term Part-Time Employee Retirement Plan Rules

"[To] ease your administrative burden you may: [1] Eliminate any hour requirement for eligibility purposes, or [2] Require no more than 500 hours in a 12-month computation period. To avoid additional costs, you can impose a different (but still compliant) service requirement to receive employer contributions for all employees, or applicable only to part-time, temporary, or seasonal employees."

Executive Order Targets Prescription Drug Price Reduction

"[Executive Order 14273] sets forth the administration's statement of objectives to reduce prescription medication costs by promoting competition and eliminating practices that lead to high drug prices.... [T]he executive order sets forth a broad agenda to impact Medicare prescription drug costs, including in the Medicare Part D program."

Pension Risk Transfer Litigation Targets Multiply; Courts Finally Weigh In

"Although the Alcoa and Lockheed cases involve similar facts and allegations, the courts reached opposite conclusions.... Plan sponsors and fiduciaries should continue to carefully consider the guidance in the Department's Interpretive Bulletin 95-1 when choosing a PRT annuity provider." [Konya v. Lockheed Martin Corp., No. 24-0750 (D. Md. Mar. 28, 2025); Camire v. Alcoa U.S.A. Corp., No. 24-1062 (D.D.C. Mar. 28, 2025)]

CMS Announces Early Termination of Four Medicare Payment Models

"Without providing any specifics as to the results of its ongoing analysis of the affected programs, CMS announced its decisions to terminate four models early: [1] Maryland Total Cost of Care (original performance period 2019-2026); [2] Primary Care First (original performance period 2021-2026); [3] ESRD Treatment Choices (original performance period 2021-2027 ... and [4] Making Care Primary (original performance period 2024-2034)."

DOL Increases Civil Penalties for Noncompliance

"Effective January 15, 2025, the [DOL] increased its ERISA health and welfare civil penalties for noncompliance.... [A chart outlines] the former maximum and minimum penalties, the new maximum and minimum penalties, and the increase."

How Plan Sponsors Can Respond to the Increase in Claims Challenging the Use of Retirement Plan Forfeitures

"The first step to mitigating risk is understanding whether the plan documents contain discretionary language permitting the use of forfeitures for plan expenses or future employer contributions. If so, consider: [1] Narrowing the acceptable uses of the plan's forfeiture account to one category of expenses (e.g., employer contributions only or plan expenses paid by the employer only), or [2] Identifying one category of expenses to always be paid first."