"[T]he court found that the lower court had erred in not permitting Yellow to amend its complaint adequately.... The Tenth Circuit's ruling specifically pointed out that Yellow's amended complaint successfully demonstrated that the Teamsters had essentially repudiated their duties under the collective bargaining agreement. Thus, Yellow was exempt from exhausting all grievance procedures that would typically be required in contract disputes." [Yellow Corp. v. Int'l Brotherhood of Teamsters, No. 24-3411 (10th Cir. Nov. 5, 2025)] MORE >>
"[In] most cases, no IRA funds will need to be turned over to creditors if you file for bankruptcy. However, there is one important exception to that rule. If your IRA loses its tax-exempt status, bankruptcy protection for that IRA disappears. When would this happen? The most common way is when a person in bankruptcy commits a 'prohibited transaction' with his IRA dollars." MORE >>
"[T]he Ninth Circuit Court of Appeals addressed whether a bankrupt employer could assume and assign a settlement agreement that significantly reduced its withdrawal liability to an ERISA-governed pension plan. The court ultimately held that the agreement constituted a 'financial accommodation' under the Bankruptcy Code and therefore could not be assumed or assigned in bankruptcy." [In re Svenhard's Swedish Bakery, No. 23-60045 (9th Cir. Sept. 12, 2025)] MORE >>
"Judge Craig Goldblatt of the Delaware Bankruptcy Court has been conducting a master class in the Yellow Corporation Chapter 11 case. His decisions illustrate how ERISA and Bankruptcy law may conflict but more often can be harmonized." [In re Yellow Corp., No. 23-11069 (Bankr. D. Del. Apr. 7, 2025)] MORE >>
"Will a retirement plan's violation of ERISA requirements mean that the anti-alienation protection will dissolve? The Third Circuit held that such was not the case. Although a retirement plan which violated the ERISA rules might suffer other consequences, it was still a plan that fell within the ambit of ERISA and thus the anti-alienation protection held its vitality." [In re Gilbert, No. 23-2944 (3d Cir. Oct. 24, 2024)]MORE >>
"This article shows how ERISA interacts with the Bankruptcy Code in several areas: defined benefit pension plan termination and withdrawal and resulting claims, fiduciary duties in plan administration and termination, and an individual debtor's ability to protect retirement income from creditor claims. In addition, the article addresses how the Code treats top-hat plans, severance, and bonus arrangements." MORE >>
"The Third Circuit said that it found nothing in ERISA's text supporting the proposition 'that ERISA's anti-alienation language does not apply to retirement plans operated in violation of its commands.' ... The Third Circuit also said that it found no language in the IRC rendering an anti-alienation provision in an ERISA plan unenforceable if the plan was not administered in accordance with the IRC." [In re Gilbert, No. 23-2944 (3d Cir. Oct. 24, 2024)] MORE >>
"The documents that now can be submitted electronically include ... [1] Notice of Plan Abandonment and Intent to Serve as Qualified Termination Administrator.... [2] Final Notice and Special Terminal Report for Abandoned Plans (STRAP).... [3] Bankruptcy Trustee Supplement."
"Since 2006, the program has enabled benefit distributions to be made to participants and beneficiaries of individual account retirement plans, such as 401(k) plans, that have been abandoned by their sponsoring companies. It allows qualified termination administrators to wind up a plan’s affairs and provides them with streamlined procedures for distributing benefits. The new system offers these administrators an online option for submitting required information to the department in addition to existing email and paper-based methods."
"DOL believes that the program’s streamlined procedures will reduce administrative burdens and costs for bankruptcy trustees charged with terminating DC plans. The [interim final rule] took effect July 16. This article focuses on aspects of the IFR relevant to plan sponsors."
"The interim final rule modifies the Special Terminal Report for Abandoned Plans (STRAP) that QTAs file with the DOL and creates an optional online method used to file the STRAP and other notices. The DOL also expands the Abandoned Plan Program to include individual pension plans covered by [ERISA], whose sponsors are under Chapter 7 bankruptcy." MORE >>
"[1] What happens to 401(k) assets in a bankruptcy? ... [2] Which agencies can protect workers' retirement savings? ... [3] What is the role of a bankruptcy trustee? ... [4] How are workers at bankrupt companies reunited with their assets?"
"The Chapter 7 bankruptcy trustee's duties are generally the same as the [Qualified Termination Administrator (QTA)], but [there] are a few differences.... There are options for the distribution of benefits from an abandoned plan, but a determination needs to be made as to whether the plan's sponsor is in Chapter 7 bankruptcy and subject to the new special rules or whether the general abandoned plan rules apply." MORE >>
"Allowing Chapter 7 bankruptcy trustees to use the Abandoned Plan Program gives them a clearer path for terminating and making distributions from bankrupt entities' 401(k) plans and potentially reduces the erosion of participant accounts by administrative fees.... [The DOL] has requested additional comments ... and indicated that more changes may be made (including possibly extending the program to cover plans of entities in Chapter 11 bankruptcy or receivership under the FDIC or other applicable federal or state law)."
"The [EBSA] has issued interim final regulations (IFRs) that expand the scope of the abandoned plan program to encompass plans whose sponsors are in liquidation under Chapter 7 of the Bankruptcy Code and related amendments to Prohibited Transaction Exemption 2006-06. The IFRs and PTE amendments, which adopt with modifications the proposed regulations from 2012, are effective July 16, 2024. The DOL has requested comments on numerous aspects of the IFRs. Comments are due by July 16, 2024."
"Before these regulatory updates, Chapter 7 bankruptcy trustees were ineligible to use the Abandoned Plan Program, despite being responsible for administering retirement plan functions on behalf of bankrupt entities ... Using the program's streamlined process, these trustees can now reduce the time and resources needed to wind up a bankrupt company's retirement plan, the department added." MORE >>
"The DOL proposes to improve the Abandoned Plans Program by expanding coverage to ERISA plans affected by Chapter 7 bankruptcy ... The rule also makes other changes, including modifying the Special Terminal Report for Abandoned Plans (STRAP) that qualified termination administrators (QTAs) file with the DOL, and will make an optional online method available for filing the STRAP and other notices." MORE >>
"In September 2023, former employees of Bed Bath & Beyond sued members of the company's 401(k) committee ... [alleging] they lost more than $5 million following the company's bankruptcy filing in April 2023 ... The employees allege that the loss they suffered was avoidable.... [A]nalyzing the lawsuit provides an opportunity to highlight some best practices." [Harvey v Bed Bath & Beyond Inc 401(k) Savings Plan Committee, No. 23-20376 (D.N.J. complaint filed Sep. 14, 2023)] MORE >>
"If the bankrupt business maintains a defined benefit plan, it must notify the [PBGC] of the bankruptcy filing -- either Chapter 7 or Chapter 11. The PBGC, however, does not automatically take over the defined benefit plan."
"U.S. Bankruptcy Judge Thomas J. Tucker granted the city's motion and entered an order requiring the Police and Fire Retirement System to amortize the unfunded actuarial accrued liability that exists as of June 30 over 30 years....In addition, the bankruptcy judge enjoined the Police and Fire Retirement System from further attempts to shorten the amortization period." [In re City of Detroit, Michigan, No. 13-53846 (Bankr. E.D. Mich. Jun. 26, 2023)]
"Colleen Lehr was a former participant in the Perri Electric, Inc. Profit Sharing Plan who was charged with embezzling money from the Plan. She was ordered to pay Perri Electric ... the amount she stole from the Plan. Appellants Colleen and Paul Lehr argued that Perri Electric should have applied the initial installment payment to the Plan and asserted a breach of fiduciary duty claim against Perri Electric. The district court granted summary judgment to the defendants on the basis that the Lehrs lacked statutory standing under ERISA. The Ninth Circuit affirmed." [Lehr v. Perri Electric, Inc., No. 19-17199 (9th Cir. Jan. 3, 2023; unpub.)]
"[M]any courts have taken the view that a pension plan loan does not create a 'debt' for purposes of the bankruptcy.... [A] bankruptcy court has challenged this seemingly well established concept ... [If] pension plan loans are treated as 'debts' ... by more bankruptcy courts, then pension plans may face increased litigation arising from participant bankruptcies. This could include ... efforts by a chapter 7 trustee to claw back loan repayments made prior to bankruptcy[.]" [Montoya v. Dubbin (In re Dubbin), No. 19-12040-17 Adv. 21-1004-t (Bankr. D.N.M. Aug. 6, 2021)] MORE >>
"Under the federal bankruptcy law, IRA assets up to a certain dollar limit cannot be reached by creditors. That dollar limit is indexed every three years based on the cost-of-living. The current dollar limit is currently $1,362,800, but on April 1 it goes up to $1,512,350 until March 31, 2025. That limit is especially generous because it doesn't take into account rollovers from employer plans like 401(k) plans."
"Most people in the retirement plan industry know that, in general, funds in qualified [ERISA] plans are protected from creditors. However, recent court decisions have expanded on the protections provided in some more specific circumstances. The treatment of retirement savings in bankruptcy does come up occasionally, but ... different situations can lead to different outcomes[.]"
