Peter Gulia

That an investment-adviser firm’s representative gets no direct or indirect compensation might not be good enough if the representative is an owner of the firm, or otherwise has some interest regarding the firm’s compensation. This is not advice to anyone.

ERISA § 3 [29 U.S.C. § 1002] Definitions (14) The term “party in interest” means, as to an employee-benefit plan— (A) any fiduciary (including, but not limited to, any administrator, officer, trustee, or custodian), counsel, or employee of such employee-benefit plan; (B) a person providing services to such plan; (C) an employer any of whose employees are covered by such plan; (D) an employee organization any of whose members are covered by such plan; (E) an owner, direct or indirect, of 50 percent or more of— (i) the combined voting power of all classes of stock entitled to vote or the total value of shares of all classes of stock of a corporation{,} (ii) the capital interest or the profits interest of a partnership, or (iii) the beneficial interest of a trust or unincorporated enterprise, which is an employer or an employee organization described in subparagraph (C) or (D); (F) a relative (as defined in paragraph (15)) of any individual described in subparagraph (A), (B), (C), or (E); (G) a corporation, partnership, or trust or estate of which (or in which) 50 percent or more of— (i) the combined voting power of all classes of stock entitled to vote or the total value of shares of all classes of stock of such corporation, (ii) the capital interest or profits interest of such partnership, or (iii) the beneficial interest of such trust or estate, is owned directly or indirectly, or held by persons described in subparagraph (A), (B), (C), (D), or (E); (H) an employee, officer, director (or an individual having powers or responsibilities similar to those of officers or directors), or a 10 percent or more shareholder directly or indirectly, of a person described in subparagraph (B), (C), (D), (E), or (G), or of the employee-benefit plan; or (I) a 10 percent or more (directly or indirectly in capital or profits) partner or joint venturer of a person described in subparagraph (B), (C), (D), (E), or (G). . . . . (15) The term “relative” means a spouse, ancestor, lineal descendant, or spouse of a lineal descendant. https://www.govinfo.gov/content/pkg/USCODE-2024-title29/html/USCODE-2024-title29-chap18-subchapI-subtitleA-sec1002.htm

Even if you never work with health plans, a case involving a “No Suprises Act” rule raises a question that matters for all situations in which Congress delegates to an executive agency a power to make a legislative rule. An appeals court decided that some parts of a rule to implement Congress’s “No Suprises Act” are contrary to law, and vacated those parts. Beyond not applying those parts in deciding the litigants’ dispute, the court might have nullified those parts of the rule from applying to anyone, anywhere in the United States. The Solicitor General argues that the Administrative Procedure Act’s scope-of-review provision [5 U.S.C. § 706] for a court “[t]o the extent necessary to decision” to “hold unlawful and set aside agency action, findings, and conclusions found to be . . . not in accordance with law” does not empower a court to vacate an agency rule as to everyone. Rather, a court’s relief properly applies only to the litigants in the particular dispute the court has power to decide. Further, the Solicitor General argues: “[E]ven if the Court were to hold that vacatur is a permissible remedy under the APA, [the Court] should treat vacatur as an equitable remedy subject to ordinary equitable principles.” Among those principles, “remedies ‘ordinarily operate with respect to specific parties,’ rather than ‘on legal rules in the abstract[.]’” United States Dep’t of Health and Human Servs. v. Texas Medical Ass’n, No. 26-491 (U.S., cert. petition filed Oct. 14, 2026), https://www.supremecourt.gov/DocketPDF/26/26-491/429429/20261014091943719_TMA%20v.%20HHS%20Petition.pdf. If the Supreme Court grants review and decides what the Solicitor General asks for, a Federal district court’s decision—even one declaring an agency rule contrary to law—would have no effect beyond the particular case’s litigants. An appeals court’s nonprecedential decision would have no effect beyond the particular case’s litigants. An appeals court’s precedent would affect only cases litigated in a district in that circuit’s geographic range. (For example, an Eleventh Circuit precedent affects only districts in Alabama, Florida, and Georgia.) Others arguing that an agency’s rule is contrary to law would need to litigate those issues case-by-case. What’s meant as national law might not become uniform until an appropriate case is litigated in the Supreme Court and is decided by that Court’s reasoned opinion. Some people might find that unsettling. But it’s not much different than what can happen with courts interpreting a statute that lacks a call for an executive agency to make a legislative rule. While I describe some of the Solicitor General’s arguments, I don’t express any view.

The Treasury’s rule to interpret and implement Internal Revenue Code § 401(a)(9) includes this: (b) Determination of account balance — (1) General rule. In the case of an individual account under a defined contribution plan, the benefit used in determining the required minimum distribution for a distribution calendar year is the account balance as of the last valuation date in the calendar year preceding that distribution calendar year (valuation calendar year) adjusted in accordance with this paragraph (b). For this purpose, all of [a participant’s] accounts under the plan are aggregated. Thus, all separate accounts, including a separate account for employee contributions under section 72(d)(2), [but not a designated Roth account, and not the value of a qualifying longevity annuity contract] are aggregated for purposes of this section [26 C.F.R. § 1.401(a)(9)-5]. (2) Adjustment for subsequent allocations and distributions — (i) Subsequent allocations. The account balance is increased by the amount of any contributions or forfeitures allocated to the account balance as of dates in the valuation calendar year after the valuation date. For this purpose, contributions that are allocated to the account balance as of dates in the valuation calendar year after the valuation date, but that are not actually made during the valuation calendar year, may be excluded. (ii) Subsequent distributions. The account balance is decreased by distributions made in the valuation calendar year after the valuation date. 26 C.F.R. § 1.401(a)(9)-5(b) https://www.ecfr.gov/current/title-26/part-1/section-1.401(a)(9)-5#p-1.401(a)(9)-5(b). If a plan’s administrator follows that rule: If the plan has only one valuation date in each year, that date is each March 31, and 2026 is the distribution calendar year for which one calculates a minimum distribution: March 31, 2025 balance plus contributions and forfeitures allocated (or allocated and made) April 1 through December 31, 2025 minus distributions made April 1 through December 31, 2025 equals account balance to determine the 2026 minimum distribution. This is not advice to anyone.

Thank you for sharing a further reasoning. Among other issues, whether a complaint plausibly asserts a claim on which relief could be granted might turn on whether the complaint alleges facts from which a judge could find that the valuation expert was not independent regarding the person who might have engaged in a prohibited transaction. It might be disloyal or imprudent for a valuation-reviewing fiduciary if that fiduciary knows or, in the exercise of prudent diligence, would know that the valuation expert is not independent.

Might the plan sponsor have set a measure of 83 hours in a month because a health or other welfare plan for the employees looks to that measure for some purpose?

Perhaps the legislation puts Congress’s imprimatur on identifying the IRS’s Revenue Ruling as a plausible method for estimating the hypothetical fair market value of an asset that has no “generally recognized” market. But the method is vulnerable to the information assumed. Does “good faith” require only exclusive-purpose loyalty? Or does that loyalty require that the fiduciary act with ERISA § 404(a)(1)(B) prudence?

ERISA § 3(18)(B)(i), as this legislation would add it, states: “For purposes of clause (ii) of subparagraph (A) [determining the fair market value of a security for which there is no generally recognized market], a fiduciary of an employee stock ownership plan (as defined in section 407(d)(6)) may make a good faith reliance on a valuation provided by an independent valuation expert or business appraiser that has relied upon the principles and methodologies set forth in Internal Revenue Service Revenue Ruling 59–60 (as amplified and modified by the Internal Revenue Service from time to time) in determining the fair market value of an asset described in such clause.” I’m curious: What does this legislation do to lessen a fiduciary’s responsibility in determining the fair market value of an untraded security?

Among reasons for focusing on a service provider’s agreement is that acting beyond one’s obligation might increase the service provider’s exposures to liabilities and expenses. A participant might assert that the volunteer became a fiduciary of the plan. That could include a cofiduciary’s responsibility to make prudent efforts to remedy other fiduciaries’ breaches. Or, a participant might assert that the volunteer provided tax, ERISA, or other legal advice. Courts hold a nonlawyer who provides (or is alleged to have provided) any legal advice to the standards of competence, diligence, accuracy, completeness, and conduct that apply to a licensed and professionally behaving lawyer. A participant might assert that she was an intended beneficiary of the service provider’s advice, and the less-than-careful advice harmed the participant. A volunteer might beat back those and other claims. After spending too much money on attorneys’ fees and other expenses, likely unrecoverable. For example, consider CSA 401(k) Plan v. Pension Professionals, Inc., 195 F.3d 1135, 23 Empl. Benefits Cas. (BL) 2241 (9th Cir. Nov. 23, 1999). A TPA tried to get an employer’s chief executive, who also was a plan trustee, to restore money he stole from the retirement plan. For this Good Samaritan effort, the participants sued the TPA, asserting that the TPA’s efforts made it the plan’s fiduciary. The TPA suffered two rounds of litigation, and paid substantial attorneys’ fees, before the appeals court found the TPA was not a fiduciary. The TPA’s attorneys’ fees and expenses were not reimbursed by any of the wrongdoers. This is not advice to anyone.

Did the plan’s administrator deliver the summary plan description to participants who were immediately eligible? Whether that was done, or omitted, might matter in the administrator’s and other fiduciaries’ evaluations of correction opportunities. This is not advice to anyone.

Lois Baker, thank you for your refresh, which shows an action not yet displayed when I looked. So, Article I § 7’s “ten days (Sundays excepted)” began. Unless the 119th Congress adjourns, the legislation seems likely to become a law. “The amendments [of ERISA § 3(18)] “shall apply with respect to determinations described in [ERISA §] 3(18)(B) [as amended] “made on or after the date of enactment of this Act.”

Today, Congress.gov shows seven House of Representatives actions on September 16. https://www.congress.gov/bill/119th-congress/senate-bill/2403/all-actions And shows an enrolled bill. https://www.congress.gov/119/bills/s2403/BILLS-119s2403enr.pdf But does not yet show anything for “became law” or even “to President”. The parchment might not have been delivered to the President. I express no view about whether the legislation or some part of it might be contrary to the Constitution of the United States of America.

If mtopalovic (or her employer) is a service provider, and not any fiduciary: Have you been paid for all services already performed? Might you decline to provide further services until they are paid in advance? Might a suggestion that the corporation pursue shareholders for a contribution of capital be beyond your contract services? If you assemble a draft of the plan’s administrator’s Form 5500 report on 2025, do it truthfully. If you would be an electronic submitter of the administrator’s Form 5500 report, consider, after getting and considering your lawyer’s advice, withdrawing that service if the administrator instructs you to submit a report you believe would be false. How will the plan’s administrator deliver to the plan’s participants, beneficiaries, and alternate payees the summary annual report that refers to the Form 5500 report on 2025? Which person is responsible to tax-report distributions paid in 2026? If contributions needed for 2025 safe-harbor treatment remain uncollected by October 15, 2026, has the plan lost 2025 safe-harbor treatment? What steps could help you show that the service provider never had any discretionary authority, and never exercised any discretion? This is not advice to anyone.

The originating post’s premise is that the might-be-receiving plan does not initiate participant loans. Basically’s query is about whether to accept a rollover-in contribution that includes an outstanding loan made under the distributing plan. Consider austin3515’s observations. About uniformity. And about what’s practical. Even if both the distributing and receiving plans’ administrators are willing, either’s recordkeeper might less helpful. Tax law’s coverage and nondiscrimination rules and ERISA § 408(b)(1)’s call for loans to be “available to all . . . participants . . . on a reasonably equivalent basis” suggest that a plan’s sponsor and administrator might expect a provision that allows a rollover-in contribution to include accepting an outstanding loan allows that opportunity uniformly for all similarly situated participants. 29 C.F.R. § 2550.408b-1 https://www.ecfr.gov/current/title-29/section-2550.408b-1. Consider that a plan’s acceptance of the repayment rights under a participant loan that had been payable to another plan might be a novation of the loan agreement. This is not advice to anyone.

One quibble: If a participant’s request for a participant loan is denied and the denied claimant seeks a review of that decision, wouldn’t ERISA § 503 claims procedure suggest that a review is with the multiple-employer plan’s administrator or its claims administrator—likely aligned with the professional-employer organization, not the service-recipient employer?