News Archive

"Mandatory cash-out distributions may clear small account balances from the company's 401(k) plan; however, forced cash-outs can also create risk, leakage, and unhappy former employees. This post breaks down the increased $7,000 cash-out limit under SECURE Act 2.0, default safe harbor rollover IRAs, and how auto portability works as an enhancement to the mandatory cash-outs so you can simplify administration while protecting participant outcomes."  MORE >>

"Legislation that would create the Mississippi Work and Save Program is moving quickly.... Private-sector employees in Utah are one step closer to being able to avail themselves of a new savings vehicle that would facilitate preparing for retirement.... Private-sector employees in Kansas whose employers do not offer them a retirement plan would obtain coverage through the Kansas Empowerment Savings Program if legislation now before the state House of Representatives is enacted."  MORE >>

"The proposed regulations reflect the DOL's position that group health plan fiduciaries have a duty to ensure the reasonableness of fees and that transparent fee disclosures should help them to evaluate PBM arrangements. ... [T]he DOL recognizes that negotiating PBM arrangements requires specialized expertise, and that most group health plans must work with benefits consultants or brokers who may have conflicts of interest due to payments or rebates they receive from PBMs. The proposed regulations ... do not provide guidance on how fiduciaries can use [the disclosures] to negotiate more favorable prescription drug prices."  MORE >>

"[T]he Proposed Rule would: [1] Allow issuers to offer catastrophic plans with terms of either one year or multiple consecutive years, up to 10 years ... [2] Repeal standardized plan options and related limit requirements ... [3] Permit low-deductible plans with higher maximum out-of-pocket limits ... The Proposed Rule also adds additional standards of conduct for insurance agents, brokers, and web-brokers 'by clarifying prohibited marketing practices and reinforcing oversight to deter fraud and misleading conduct.' "  MORE >>

"The nation's highest court's consideration of a 401(k) suit involving alternative investments and the need for a 'meaningful benchmark' has been bumped till next term. While the justices recently agreed to extend briefing due dates in the case ... its absence on the court's April calendar indicates a delay, in this case till next term." [Anderson v. Intel Corp. Inv. Policy Comm., No. 22-16268 (9th Cir. May 22, 2025; cert. pet. granted Jan 16, 2026, No. 25-498)]  MORE >>

"[T]he Fifth Circuit held that the arbitration clause in the company's defined contribution retirement plan violated the effective vindication doctrine because it prohibited participants from asserting claims in a representative capacity on behalf of the plan, which the Court explained 'is facially at odds with the statutory text' of ERISA Section 409 'and the remedy it provides.' The arbitration clause was also unenforceable because it only permitted participants to obtain individualized relief in arbitration rather than plan-wide relief.... [A table] lists the federal appellate courts that have applied the effective vindication doctrine in holding that an ERISA plan arbitration clause was unenforceable." [Parrott v. International Bancshares Corp., No. 25-50367 (5th Cir. Feb. 10, 2026)]  MORE >>

"New York City's Earned Safe and Sick Time Act (ESSTA) adds 32 hours of frontloaded unpaid safe/sick time to its existing paid safe/sick time requirements for employers. The ESSTA also expands the permissible uses for both types of leave under the Act to include scenarios tied to caregiving, housing or subsistence proceedings, public disasters and workplace violence. Employers ... will no longer be required to grant a set number of temporary schedule changes; employees, instead, will enjoy a protected right to request such changes."  MORE >>

"[This decision] reinforces several recurring themes in ERISA litigation: [1] Boilerplate objections remain disfavored and can be deemed waived. [2] Incentive and bonus structures tied to claim outcomes are generally discoverable when limited to personnel involved in the claimant's file. [3] 'Batting average' statistical discovery continues to face significant judicial resistance. [4] Courts will tailor discovery to the handling of the specific claim at issue, rejecting sweeping company-wide requests." [Schaefer v. Unum Life Ins. Co. of Am., No. 24-0590 (M.D. Penn. Feb. 12, 2026)]  MORE >>

"Annuity purchases for retirees with small benefit amounts can be an easy and highly effective way to reduce PBGC premiums and save money at no cost to plan participants. For plan sponsors not subject to the PBGC Variable Rate Premium Cap, purchasing annuities for retirees receiving less than $380 monthly will save the plan money. For plan sponsors subject to the cap, purchasing annuities for retirees receiving less than $1,070 monthly will save the plan money."  MORE >>

"Managed accounts offer personalization and improved outcomes but raise cost-effectiveness concerns for sponsors. ROI comparison between managed accounts and education programs is needed for better decision-making. More due diligence is recommended before implementing managed account solutions in retirement plans."  MORE >>

"Executive benefits are an increasingly common way for employers to attract and retain top talent for key positions in the organization. Although nondiscrimination rules often present barriers to implementing certain forms of executive arrangements, there are almost always workarounds, alternatives, or taxable (with a gross-up if desired) approaches that can accomplish many of the same goals."  MORE >>

"In 2018, 7.9 per 100,000 enrollees received a CGT; by 2022, the rate rose to 9.2 per 100,000.... CGT users represent fewer than one-tenth of one percent of the enrollee population but account for approximately one-half of one percent of total spending.... Among enrollees in the top 1 percent of total health care spenders, just 0.58 percent used CGTs. However, these individuals accounted for 1.6 percent of spending within that top-spending group."  MORE >>

"[W]orking while receiving Social Security can come with a significant tax drag. If you claim before your full retirement age (currently 67), Social Security benefits are subject to the “earnings test,” a formula that temporarily withholds a portion of benefits if your wage income exceeds certain levels. You may also need to pay taxes on Social Security benefits or surcharges on Medicare premiums, or simply be pushed into higher income tax brackets."  MORE >>

"The average millennial (ages 30 to 45 in 2026) contributes 8.8% of their salary to their 401(k), and their employer contributes 4.6%. Many financial experts suggest a target of 15% in total. Median 401(k) balances for people in their 30s are about $25,000 -- $40,000, while the average, which skews higher, is over $100,000."  MORE >>

"The plan clearly required enrollment of a newborn within 31 days of birth for coverage to be effective retroactively to the date of birth, and the participant provided no evidence that such enrollment had occurred. The court further rejected the participant's argument that NMHPA requires automatic coverage for newborns, explaining that the statute only prohibits plans from limiting the length of hospital stays for mothers and covered newborns below the statutory minimum." [Townley v. Aetna Life Ins. Co., No. 24-3513 (S.D. Tex. Dec. 31, 2025)]  MORE >>

"A notable change in the proposed revision includes expanding the scope to acknowledge that the performance of actuarial services for retiree group benefit programs may require actuaries from more than one practice area, in which case, all references to actuary collectively apply to collaborating actuaries, and to clarify the application of the standard when the actuary selects an output smoothing method and when an assumption or method is not selected by the actuary."  MORE >>

"[P]ublic pension liabilities are not legally treated as general obligation-type debt and are not subject to the safeguards restricting GO debt undertakings. In some states, these pension obligations have even stronger claims on the full-faith and credit of the state than GO debt. The lack of general obligation debt type safeguards constraining public pension liabilities has significant implications on the financial risk position of state and local governments"  MORE >>

48 pages. "What's New: [1] Automatic enrollment.... [2] Compensation limits for 2025 and 2026.... [3] Elective deferral limits for 2025 and 2026.... [4] Defined contribution limits for 2025 and 2026.... [5] Defined benefit limits for 2025 and 2026.... [6] SIMPLE plan salary reduction contribution limits for 2025 and 2026.... [7] Catch-up contribution limits for 2025 and 2026.... [8] Higher catch-up contribution limit for ages 60 to 63.... [9] Distributions from Roth accounts."  MORE >>

"The maximum annual limitation on cost sharing that a group health plan can impose on essential health benefits has been increased by 13.2% for 2027."  MORE >>

"[The Cunningham] opinion flagged a handful of tactics lower courts could use to weed out flawed cases, including ordering plaintiffs to address affirmative defenses early on, assessing attorneys' fees and sanctions, and carefully scrutinizing whether cases should be dismissed for lack of actionable injuries. Trial court judges have begun to follow the high court's advice, providing a potential roadmap for defendants' attorneys juggling the hundreds of would-be class suits filed under ERISA over the past several years."  MORE >>

"The line between who can and cannot invest in private securities is mostly governed by wealth and income, and this is arbitrary, [SEC Chair Paul Atkins] argued.... Atkins went on to argue that workers already have indirect access to alts in their pensions, 'why not extend it to 401(k)s?' He added that 'one cannot necessarily have a balanced portfolio in this current market without having exposure to the private markets.' "  MORE >>

"For calendar-year plans, the PBM requirements would be effective for plan years beginning on January 1, 2029. The CAA will require plan sponsors to ensure that contracts with PBMs contain all of the contractual requirements set forth in the CAA. Plan sponsors will also need to monitor both PBM reporting obligations and PBM compensation."  MORE >>

"While the new federal guidelines are aimed at reforming the PBM industry, they include significant new obligations for sponsors of employee benefit plans.... [P]lans need to consider the basic measures that they must take to comply with the new requirements, including amending PBM Agreements and requesting appropriate disclosures. More deeply, plan sponsors must reckon with the significant volume of data being provided by their PBMs."  MORE >>

"If catch-up contributions are recharacterized under IRC 415(c) and the participant is subject to the Roth requirement, any pre-tax deferrals must be converted to Roth. That means potential tax consequences for the participant.... The Roth catch up requirement can also create potential nondiscrimination challenges."  MORE >>

23 pages. "What's new: [1] Telehealth and other remote care services.... [2] Health Flexible Spending Arrangement (FSA) contribution and carryover for 2025."  MORE >>