"This rule amends the [PBGC's] regulation on Allocation of Assets in Single-Employer Plans by substituting a new table for determining expected retirement ages for participants in pension plans undergoing distress or involuntary termination with valuation dates falling in 2024. This table is needed to compute the value of early retirement benefits and, thus, the total value of benefits under a plan.... This rule is effective January 1, 2024."  MORE >>

"The IRS seems to presume in the regulations that all LTPTs are, by definition, nonhighly compensated employees (NHCEs). However, this ignores the situation where a business owner is working in the business fewer than 1,000 hours during a year or where a child of the owners works part-time.... [O]ne must question whether this is a potential area for creativity in the odd situation where an HCE is also an LTPT."  MORE >>

"Among other changes, the forms include: [1] A new Schedule MEP for multiple-employer plans (MEPs), including pooled employer plans (PEPs). [2] Updates for optional defined contribution (DC) group filing arrangements, including a new Schedule DCG. [3] Changes to the method of determining whether a DC plan needs an audit report from an independent qualified public accountant. [4] Additional categories of administrative expenses on Schedule H. [5] Compliance questions relating to retirement plan nondiscrimination testing and favorable opinion letters for preapproved plans."  MORE >>

"The Proposed Rule picks up an individualized recommendation to a retirement investor by an adviser that regularly provides investment recommendations to any investors and, therefore, many common 'one-time' advice scenarios that historically were not covered by the fiduciary standard ... The omission of a 'sales' or 'sophisticated investor' safe harbor may leave a lack of clarity for many common marketing activities."  MORE >>

"[P]lan sponsors should coordinate with their recordkeepers, third-party administrators, and other advisors to ensure all desired changes are implemented (and undesired ones are not).... [T]he deadline to amend plan documents for these rules is not until December 31, 2025, so plan sponsors need to keep good records of their elections so the eventual plan amendments will accurately reflect the plan's operation."  MORE >>

"The Second Circuit issued a well-reasoned opinion that may have significant implications for ERISA prohibited transaction claims at the pleading stage. The Second Circuit embraced a position that plan fiduciaries and their counsel have advanced for years: plaintiffs alleging a prohibited transaction under ERISA section 406 must do more than merely allege facts that the transaction meets the technical elements of a party-in-interest transaction. Rather, the plaintiff must also plead plausible facts showing that ERISA section 408's statutory exemptions do not apply." [Cunningham v. Cornell Univ., No. 21-0088 (2d Cir. Nov. 14, 2023)]  MORE >>

"Many record keepers have been able to reduce expenses and offer low cost share classes because they receive annual 'stipends' from asset managers willing to pay the entry fee. Should those fees be considered when determining whether their compensation is reasonable? ... Does the Bugielski precedent apply to the 'platform' fees paid to advisory firms by record keepers and assets managers? ... Do advisors disclose these payments?" [Bugielski v. AT&T Servs., Inc., No. 21-56196 (9th Cir. Nov. 8, 23)]  MORE >>

"The Treasury Department issued a record-breaking multi-billion dollar fine against Binance ... further compounding the fiduciary risks of crypto assets.... The [SEC] in June had charged Binance with operating as an unregistered securities exchange and those allegations have not yet been resolved."  MORE >>

"Congress has quietly been putting forward new bipartisan proposals for consideration in the next round of retirement plan policymaking.... [1] Automatic reenrollment ... [2] Startup credit boost for micro employers ... [3] ERISA minimum age participation requirement ... [4] Roth IRA rollovers ... [5] Retirement plan tax credits for charities."  MORE >>

"IBM held a surplus of about $3.5 billion in its DB plan, while it paid out $550 million annually in its matching contributions to the 401(k). Faced with no funding requirements for its over-funded plan, IBM can use the $3.5 billion surplus to pay for the 5-percent annual contributions for at least the next 6 or 7 years -- improving its bottom line by $550 million each year.... [T]his clever maneuver -- while leaving employees worse off -- certainly benefits shareholders."  MORE >>

"As the year is quickly coming to an end, it is critical that plan sponsors set some time aside to review and confirm operational and administrative practices throughout the year. As appropriate, operational errors may be corrected and documented before the close of the year with significantly reduced consequences."  MORE >>

"New Item 402(x) ... adds disclosure requirements to annual proxy statements ... For calendar year-end companies, this disclosure will be required in the Form 10-K and proxy statements to be filed in early 2025. However, because the tabular disclosure may be required with respect to option grants made in calendar year 2024, public companies should review and consider changes to their equity grant policies and procedures now."  MORE >>

"[F]or clawbacks that are effected on a gross (pretax) basis, questions arise as to how the clawback is treated for income tax purposes and what avenues an individual may have for recovering any taxes previously paid on the recouped amount.  ... [T]he answers to these questions are far from straightforward, often counterintuitive, and largely dependent on the facts and circumstances of the original payment and its clawback. As a result, an affected individual's likelihood of being made whole for taxes previously paid on recouped compensation will often need to be critically evaluated by a personal tax advisor."  MORE >>