rocknrolls2

Thank you, Peter. Those are excellent points to consider in dealing with this issue. And thank you, Frank (fmsinc) for the helpful case references.

Peter, To answer your questions: the death benefit is provided by a life insurance contract under an ERISA governed plan. The SPD is the plan document. The SPD provides that the designated beneficiary needs to file a claim for life insurance within one year from the employee's date of death. If no claim is timely filed and the whereabouts of the beneficiary are unknown, the disposition of the benefit will be determined by the provisions of the claim policy of the life insurance carrier indicated in the summary of benefits insert. If the plan were to be amended to adopt a missing participant policy, which should require that the whereabouts of the beneficiary be attempted in spite of his or her deportation and such attempt is unsuccessful, even though it is after the fact, since we are not talking about a qualified retirement plan and there is no vesting for welfare benefits (absent a plan provision to the contrary), could the plan treat the beneficiary as having predeceased the participant? I could see that such a provision could apply prospectively, but I am concerned that the amendment would not be valid retroactively.

A participant of a welfare benefit fund passed away. However, his primary beneficiary has been deported and the plan officials have been unsuccessful in attempt to locate her. Can the plan treat the beneficiary as having predeceased the participant and make the benefit payable to any contingent beneficiary or, if none, the plan's default beneficiary? Alternative, can the plan treat the beneficiary as a missing beneficiary and treat the death benefit as it would with respect to any other missing participant or beneficiary under the plan?

I agree with Peter that, from a plan document standpoint, an amendment to require mandatory automatic enrollment is likely within the remedial amendment period. However, because this is a mandatory requirement for plans that do not satisfy the grandfather rule or are church or government plans, there is an operational aspect to this that would require correction. Effective for the 2025 plan year, automatic enrollment should have been implemented for the plan's participants. For that, it would make sense to provide qualified nonelective contributions allocated to the accounts of participant who were not already making elective deferrals to the plan in the amount of the missed deferral opportunity, as per Rev. Proc. 2021-30.

You have not explained who owns which percentages of ABC Company. That would be needed to make a determination.

Brian and Peter, You have raised some pretty good points, I agree.

Following up on this, in the responses citing state wage payment laws, I have seen a number of cases holding that such laws are preempted by ERISA (even applying the more narrow view of preemption that the courts now seem to be following). I know that refunding the overcharge (versus overpayment) is the right thing to do and that it is also the right an ethical thing to include interest, but I am not convinced that reliance on state wage payment laws, in itself, is something compelling the employer or trustee to do so. Any thoughts on that point would be especially welcomed.

The group health plan is self-funded. The participant contributions are deposited into a trust. The employer also contributes for a portion of the premiums.

Employee A works for Company X. For 2025, A elected family medical coverage under X's health plan. Family coverage costs the employee $275 in monthly premium payments. Employee A was actually charged $300 per month for such coverage. X's health plan discovers the error in the third quarter of 2025. Is X required to repay A the amount of the extra premium amount? Is X required to include interest on the reimbursed premium amount?

From my experience, there was a lot of discussion of creating a correction program akin to EPCRS, to deal with 409A violations. That appears to have fallen by the wayside. Unless there is pressure to rekindle the idea, I think it is likely to go nowhere for the foreseeable future. What complicates this further is that the prospect of top execs facing significant tax exposure does not necessarily tear at the heart strings of many of the key policymakers in Washington.

Thanks David and Peter, One thing that likely also played a factor at the time Manhart and Norris were decided was that the "glass ceiling" was substantially lower than it is today. I know from the experience of two brilliant highly-motivated adult daughters, who have moved rapidly up the corporate ladders of their respective careers, only to run smack into the glass ceiling as it currently stands.

I am working with a client with a defined benefit plan for collectively bargained employees. The overwhelming majority of the participants are male. The plan uses the RP-2014 blue collar male table for actuarial equivalence for participants and the RP-2014 blue collar female table for beneficiaries. In 1983, the US Supreme Court decided Arizona Governing Committee v. Norris, which held that the use of sec-based tables violated Title VII of the Civil Rights Act. Has anything developed which has changed this result in the interim? Or can this be justified by using a table for a single gender for all participants, regardless of actual gender? Thanks!

Although I am an attorney, this is not legal advice to anyone. Consult with the plan's legal counsel. They will tell you to do one of two things: (1) file a lawsuit in federal court called an interpleader in which the plan offers to pay the money to the party determined to be entitled to it by the court -- you may need to deposit the account balance with the court. The court will decide --and your client avoids the worry of paying twice and of having to fight to get the money back from the party who was determined not to be entitled to the account; or (2) decide the claim with counsel's advice and pay the person to whom it is properly payable. As far as disclosing materials submitted by the spouse, I know that the ERISA requirements do not compel the plan to share that information with the other person, with two exceptions: (1) if you grant the wife's appeal and inform the daughter that she is not entitled to the benefit, the claims procedure regulations require you to share the information with the claimant; and (2) if someone sues, the mother and daughter will be parties to the lawsuit and their attorneys will be entitled to relevant documents during discovery in the litigation. To short-circuit the process and maybe resolve this short of litigation, I would suggest that you share the information with the daughter and that you propose interpleader as an amicable way to resolve the issue. But Remember, I am not the plan's lawyer -- you will need to defer to him or her for the final recommenation.

IMHO, in addition to the inevitable failure of the coverage test, this is no way for the owners to be running a business. It is basically saying, if we like you, you're in, if we don't like you, you're out and if we don't like you, we can keep you out by paying a few thousand bucks more to keep you out. It is bound to cause resentment, mistrust and ill-feeling for the employer and among the employees. Moreover, to discourage this chicanery, you should be charging a nuisance fee for putting up with the inconvenience of constructing all kinds of crazy hoops to try to squeak their inanely complex structure squeak through compliance testing.

Thank you, Brian, for your thorough and detailed answer. However, while I agree that the personal benefit account should be considered a group health plan for ERISA purposes, what causes me to lean on the opposite side of this fence are the following: (1) the account can pay other types of benefits including severance and supplemental unemployment, and, in some cases, disability benefits; and (2) the personal benefit account is not a primary payor. Do these facts, in any way, change your conclusion?