News

"The company's move to disband its in-house team and shift the work to NEPC is being driven by the pension system's overfunding.... The overfunded status has soared from just over $100 million at the end of 2019 to about $1.2 billion at the end of 2022, an amount that represents more than half of Kodak's assets. That came as rising interest rates pushed down the present value of its future pension liabilities for the more than 37,000 participants that receive benefits in the long-standing program."

"Although PBGC's regulations provide the agency authority to reclaim SFA payments in certain circumstances, PBGC has stated that it lacks the authority to recoup the $127 million at issue. Consequently, the Fund has considered whether it can voluntarily return a portion of the SFA but has concerns that doing so could potentially have severe consequences, including personal liability for the Fund's fiduciaries and the loss of the Fund's tax-exempt status. Therefore, we request formal guidance answering two key questions. [1] Would the Fund violate the exclusive benefit rule under ERISA Section 403 and Code Section 401(a)(2) by returning a portion of the SFA?.... [2] Would the fiduciaries of the Fund violate their duties of prudence and loyalty under ERISA Section 404 by returning a portion of the SFA?"

"[P]lan sponsors should take a proactive and critical look at their welfare plan governance and administration to ensure that fiduciary duties are being satisfied ... [1] Establish and maintain a health and welfare plan committee.... [2] Review and update committee documents and committee composition.... [3] Conduct regular fiduciary training ... [4] Monitor service providers; review and pay reasonable fees.... [5] Follow plan documents.... [6] Fiduciary liability insurance.... [7] Consider cybersecurity obligations.... [8] Highlight your wins."

"Before SECURE 2.0, an employer had to wait until the end of the year to switch from a SIMPLE IRA to a 401(k) plan.... Now, under SECURE 2.0, an employer can replace its SIMPLE IRA with a safe harbor 401(k) at any point during the year. For a mid-year transition, the employer contribution obligation for the year is prorated. Any employee SIMPLE IRA deferrals count toward the 401(k) limit."

14 pages. "[CMS] released draft instructions on the CY2025 Part D Redesign. These draft instructions touch on many of the outstanding Part D benefit adjudication questions that the industry has been asking.... in addition to reinsurance, medical loss ratio, risk corridor, and Out-of-pocket cost (OOPC)/meaningful difference methodologies. Some guidance on Employer Group Waiver Plans (EGWPs) was also provided."

"If adopted, this regulation would establish network adequacy standards for behavioral health services ... The regulation specifies that an adequate network of health care providers includes residential facilities that provide sub-acute care, assertive community treatment providers, critical time intervention services providers, and mobile crisis intervention services providers."

"[D]ismissals for failure to include appropriate comparator plans are a positive trend for 401(k) plan fiduciaries in the Seventh Circuit, and has gained steam in the Sixth and Eighth Circuits as well. In these jurisdictions, plaintiffs are on notice that their complaints must provide allegations of meaningful comparator plans of similar size that received similar recordkeeping services to the plan at issue. Complaints lacking this specificity may face an early exit from litigation."

"Even if you currently allow Roth deferrals, you are not required to offer Roth Employer contributions. You can offer this option even if your plan does not offer Employee Roth deferrals. An employee must irrevocably elect Roth treatment for matching and nonelective contributions before they are allocated to their plan account."

"Insurance giant UnitedHealthcare Group said the hackers struck its Change Health business unit, which routes prescription claims from pharmacies to companies that determine whether patients are covered by insurance and what they should pay. The hackers stole data about patients, encrypted company files and demanded money to unlock them, prompting the company to shut down most of its network as it worked to recover.... U.S. pharmacies reported a wide range of impacts, with independent stores experiencing some of the worst problems."

"Employers may want to identify employees and covered plan members residing in Alabama and consider the potential implications this ruling may have on their family building journey. Ask the health plan or fertility benefit vendor what IVF treatment and embryo transport access in Alabama looks like today -- whether in-network clinics are continuing to provide IVF treatment or have paused it -- and request regular updates.... This may also be a good time to review the plan's reproductive and medical travel benefits and the organization's leave policies."

"The signing makes California the 44th state to adopt the NAIC model update, which is based on the U.S. [SEC]'s Regulation Best Interest. The model update requires sellers of annuities to act in the consumer's best interest and disclose potential conflicts of interest, but it does not require the seller to act as a fiduciary or to move away from collecting sales commissions."

"HB 481 provides that the investment objectives of a retirement system shall be to provide the greatest possible long-term benefits to its members by maximizing the total rate of return on investment within prudent limits of risk for a retirement fund of its type and consistent with any investment return requirement assumed by the actuaries in determining the present and future soundness of the fund."

"In October of 2023, the DOL entered into a settlement agreement with EmblemHealth Inc. ... resolving claims that Emblem breached its fiduciary duties under ERISA by engaging in the practice of cross-plan offsetting.... Based on the potential ERISA violations and the practical problems that may result, employers that maintain health plans (particularly self-insured health plans) should determine whether their TPAs are engaging in cross-plan offsetting."

"Health plans understand that mental health affects outcomes, but the theory often has not translated to improved delivery of health care to individual patients. The new role of incorporating mental health into predicting outcomes, in contrast, is one that focuses on well-executed intervention, not merely identification and awareness. It unifies predictive endeavors with the patient in a timely, relevant manner to address the influence that men- tal health has on all health care experiences."

"One of the conditions for obtaining the protection of either of those PTEs is an annual retrospective review and report on compliance with the requirements of the exemptions. If a failure is found to satisfy the conditions in the exemption, for example, in the review, it must be corrected."

"Income annuities provide the owner a steady stream of cash flows for a set period or for the rest of their life. Savings annuities are an accumulation-focused product with an account balance. While all savings annuities allow the owner to convert the account balance into a stream of cash flows, this is rarely done. These vehicles are often referred to as 'deferred annuities'[.]"

"[K]ey findings suggest many employers view offering or expanding their voluntary benefits programs as an effective strategy to address attraction and retention challenges in 2024."

"[M]ost federal contractors know that it can be challenging to recover increased costs for paid leave stemming from the COVID-19 pandemic under Section 3610 of the [CARES] Act.... A recent Armed Services Board of Contract Appeals (ASBCA) decision provides claimants with some reason for hope by confirming that the ASBCA has Contract Disputes Act (CDA) jurisdiction over appeals from a contracting officer's denial of Section 3610 claims.... [E]stablishing jurisdiction is only the first step, and the path to recovering paid leave costs remains narrow and highly dependent on the facts of each case."

An unofficial monthly report of the Moody's Daily Long-term Corporate Bond Yield Averages and Moody's Daily Treasury Yield Averages (used as benchmarks by some corporate pension plans).

"By its own words, the court has gone where no Delaware court dared go before, overriding a favorable shareholder vote to find that an executive compensation package was fundamentally unfair.... [H]ere are three general themes of note from the decision.... [1] The moving goalposts of executive compensation ... [2] Fairness and the minority shareholder ... [3] The substance of the process matters."

"In the past two years, the [Consumer Financial Protection Bureau (CFPB)] has penalized medical debt collectors, issued stern warnings to health care providers and lenders that target patients, and published reams of reports on how the health care system is undermining the financial security of Americans. In its most ambitious move to date, the agency is developing rules to bar medical debt from consumer credit reports[.]"

"At the federal level, [CMS] issued a final rule in January that requires electronic processing known as Application Programming Interface for prior authorizations ... Starting in 2026, required prior-authorization turnaround times are reduced to 72 hours for urgent claims and seven calendar days for non-urgent claims.... Elsewhere, states are looking at restrictions or outright bans on preauthorization for some services and procedures."

"Health insurance premiums account for between 73% and 81% of retirees' annual health care expenses and, for the most part, are predictable and can be paid from monthly income. However, out‑of‑pocket expenses can vary and should be paid from savings. Traditional financial planning principles and basic budgeting can help address many of the financial unknowns about health care costs in retirement."

"{If] given the option for an enhanced benefit, employees expressed a clear preference for increased pay and increased 401(k) match, while employers assume employees would prefer improved health and dental insurance, health savings accounts and charitable contributions. Seven in 10 workers also reported experiencing challenges when it comes to understanding benefits offered by their employer."

"A hearing that was billed as 'taking a serious look at the retirement crisis in America' with a focus on improving the defined benefit system ended with witnesses agreeing that some reforms are needed, but calling for drastically different measures."