"These special in-service distribution provisions are optional for plan sponsors. Employers should consider whether one or both would be helpful to their workforce.... These distributions are not eligible for rollover. Plan participants will need to account for these distributions on their tax returns, and they should receive Form 1099-R, which reports the distribution amount."  MORE >>

"To be treated as 'incurred by the employee,' the employee must have a legal obligation to repay the loan under its terms. The Notice explains that a cosigner may have a legal obligation to repay a loan, but a guarantor would not have such an obligation unless the primary borrower defaults.... A plan is not required to have an employee submit verification in support of his or her certification that the qualified education loan is a QSLP. However, a plan may establish reasonable procedures that require independent verification that an employee has made payments on a qualified education loan."  MORE >>

"The Sixth Circuit now joins the Second, Third, Seventh, and Tenth Circuits in concluding that an arbitration agreement may not prospectively waive participant rights under ERISA to seek plan-wide relief. While courts still appear to be in broad agreement that ERISA cases are generally arbitrable, whether a particular arbitration provision is enforceable may depend on subtle differences in the facts, the claims made, the remedies sought, and the wording of the arbitration provision." [Parker v. Tenneco, Inc., No. 23-1857 (6th Cir. Aug. 20, 2024)]  MORE >>

"The [DOL] has supported IBM retirees, asking an appeals court to overturn a lower court's rejection of the retirees' lawsuit that the company shortchanged pension benefit payments by using outdated mortality data to calculate their benefits.... [The DOL amicus brief] said a federal judge not only misinterpreted federal law but also ignored a 9-0 Supreme Court ruling that governs the timetable for plaintiffs' filing ERISA lawsuits." [Knight v. International Business Machines Corp., No. 22-4592 (S.D.N.Y. Apr. 4, 2024; on appeal to 2d Cir. No. 22-4592)]  MORE >>

"Encourage participants to review and update their beneficiary designations regularly, particularly following major life events such as marriage, the birth of a child, or a divorce.... Ensure that all beneficiary designations are complete and legible.... Clearly communicate the plan's default provisions for distributing assets if no valid beneficiary designation exists.  ... Clearly outline how divorce impacts beneficiary designations."  MORE >>

"The assumption by participants must be that the firms advertising rollovers are operating in the participants' interest, but, in fact, participants very often are moving from fiduciary protection and low-fees into an unprotected arena where their assets will be invested in high-fee mutual funds.... [P]rotections clearly are required for rollovers. If a fiduciary standard is appropriate when funds are in 401(k) plans, then such a safeguard is still appropriate when participants are contemplating moving those funds to an IRA."  MORE >>

"While the FTC may have lost this battle, it ultimately may win the war on non-competes.... Notwithstanding governor vetoes of laws totally banning non-compete clauses in New York, Maine, and Rhode Island, state legislatures continue to introduce and pass laws that whittle away at the scope of permissible use of non-compete clauses.... Until federal legislation is enacted or future rulemaking limiting or prohibiting non-compete clauses sticks, employers should continue to assess their business interests that need to be protected and consider how to protect those interests."  MORE >>