"If your non-governmental 457(b) plan has accepted deferrals exceeding the IRS-prescribed annual dollar limit (or the limit on catch-up deferrals, if applicable), the good news is that the regulations outline an approved correction method. The method is similar to the method that applies to 401(k) plans ... The bad news is that if an excess deferral under a non-governmental 457(b) plan is not distributed by April 15 of the following year, with earnings, there is no further opportunity for correction"  MORE >>

"DOL hopes plan administrators will voluntarily provide extensive historical information -- much of which goes beyond what the act requires -- to help the agency meet its Dec. 29 deadline for setting up the database. If the ICR is approved substantively intact, sponsors will need to carefully consider whether to provide the requested data, including discussing with legal counsel any potential risks under applicable privacy laws. Comments are due June 17."  MORE >>

"Because the adopted rule broadens the definition of who is an investment advice fiduciary, more entities and advisers will likely be subject to the rule and will need to rely on PTEs to effectuate sales and receive compensation. Institutions relying on PTE 2020-02 and PTE 84-24 as adopted will be required to update disclosures and make changes to their policies and procedures to align them with mitigating conflicts and complying with impartial conduct standards."  MORE >>

"The DOL also raised the equity and assets under management thresholds to qualify as a 'qualified professional asset manager' which will be phased in over the next six years. These could prove burdensome for smaller investment managers.... [T]here will be registration and recordkeeping requirements on investment advisers if they wish to rely on the QPAM Exemption in the future.... [T]his could also impact managers relying upon various exemptions under the Investment Advisers Act and the Investment Company Act."  MORE >>

"[T]he Seventh Circuit ruled that the district court had 'raised the bar too high' in evaluating 'plausibility.' The court noted that while Rule 9(b) requires heightened particularity in pleading, it does not require heightened plausibility: '[a]ll it does is call for more than a 'short and plain statement' of the claim; it leaves the requirement of plausibility untouched.' " [Appvion, Inc. Ret. Sav. & Emp. Stock Ownership Plan v. Buth, No. 23-1073 (7th Cir. Apr. 23, 2024)]  MORE >>

"Three class action complaints filed in March reveal that the plaintiffs' bar views pension risk transfers as an area of significant liability for sponsors of DB plans. The lawsuits ... potentially signal a new area of litigation in an environment where plan sponsors are increasingly interested in transferring pension risk. The plaintiffs bringing these lawsuits all decry the selection of a specific annuity provider ... as the fiduciary's wrongdoing. The three lawsuits concern risk transfers involving billions of dollars of pension liability, impacting over 100,000 participants and beneficiaries."  MORE >>

"[1] Late contributions.... [2] Compensation.... [3] Eligibility.... [4] Impermissible distributions.... [5] Loans.... [6] Compliance testing.... [7] Form 5500 series filings."  MORE >>

"The participant information that was exposed included participants' names, addresses, Social Security numbers, payment and deduction amounts, as well as bank routing and account numbers if the participants had set up direct deposit.... [On] February 26, the firm learned of a software issue that caused certain reports run by three authorized system users to include plan participant information that they were not entitled to see."  MORE >>

"To be 404(c) compliant, plan sponsors must first ensure that they are offering a broad range of investments, including at least three options, each of which is diversified and has materially different risk and return characteristics.... [R]ecordkeepers have automated a lot of this process to ensure that plan sponsors are following all the requirements.... [E]mployers should confirm with their providers that this automated process is working."  MORE >>

"[M]ore than 2 million employees from 12 tech-sector companies could have earned an estimated $5.1 billion in additional returns had their companies moved to decarbonize their retirement plan holdings 10 years ago.... Despite these companies publicly announcing climate goals and often asserting climate-friendly branding, they continue to invest billions of dollars of employee savings into fossil fuels and other industries accelerating climate change."  MORE >>

"At first blush, the decision may seem a bit clear-cut: Simply calculate the lifetime value of the early benefit amount versus the lifetime value of the higher benefit, based on some assumed life expectancy. The calculus is a bit more complicated than that because of the more favorable tax treatment of Social Security income versus IRA withdrawals, spousal benefit coordination opportunities, the consideration of the surviving spouse, and Social Security's lifetime income guarantee that exists under current law."  MORE >>

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).  MORE >>

"The fiduciary-only regulatory package rolled out by the [DOL] last week is nothing more than a repackaging of its failed 2016 regulation ... The Department ignored clear evidence of the harm its earlier fiduciary-only approach caused retirement savers, disregarded recent enhancements to consumer protections, and discounted a federal court ruling that vacated the earlier rule."  MORE >>

"[1] Determine which of your workers have agreed to non-compete clauses. This may include former workers, and may include 'Senior Executives.' [2] Consider whether your existing agreements will be enforceable under applicable state laws that are not preempted by the FTC rule.... [3] [S]tart thinking about the logistics of notifying your workers about unenforceable non-competes. [4] If your business relies on trade secrets or other confidential information ... consider taking additional steps to protect your most valuable information from being misappropriated by departing workers ... [5] Develop a system to keep track of any restrictive covenants you use moving forward."  MORE >>

"The Chamber alleges in its complaint that 'the economy as a whole will suffer' because dominant firms snatch the best employees from startups and small businesses. The Chamber argues that the FTC's Rule is an assertion of power that is contrary to centuries of state and federal law and relies on 'novel claims of authority.' " [Chamber of Commerce of the U.S.A. v. Federal Trade Commission, No. 24-00148 (E.D. Tex. complaint filed Apr. 23, 2024)  MORE >>

"To date, three lawsuits have been filed challenging the legality of the FTC's Final Rule banning non-competes. The initial two cases were filed in Texas federal court, which is widely viewed as a more hospitable forum for attacks on the Rule. The third case was filed in Pennsylvania federal court, possibly for the strategic purpose of creating a circuit split to enhance appellate options.... While other lawsuits against the FTC and its commissioners trickle in, it's likely the U.S. Chamber's lawsuit will take the lead."  MORE >>

Rev. Apr. 2024. "Split-dollar life insurance arrangements can be a key feature of executive compensation packages.... Review the [SEC] Form 10-K, Annual Report, including items 10,11 and 12 to identify the 16b executives.... Once you've established that the issue exists, determine who the policy owner is and whether the employee or the beneficiary is entitled to receive any death benefit or cash surrender value under the policy."  MORE >>

"Standard disability plans typically cover anywhere from 40-70% of an employee's salary; however, the problem lies within the limitations of the coverage. This disability plan structure typically does not account for bonuses or other types of incentive compensation, potentially leaving a large gap for those employees who are rewarded with such financial incentives based on their performance. Carve-out plans can help provide the additional protections that this population requires."  MORE >>