"This advisory serves as a reminder of the multiple year-end notices that defined contribution plans must issue to participants. These notices must be distributed within a reasonable period of time, typically 30 days, before the start of the plan year."  MORE >>

"The EPCRS plan correction standards are amended to be consistent with [Notice 2024-77]. But note that if a plan opts to forego recoupment of an overpayment any related operational failures must still be corrected. These could include scenarios in which the overpayment resulted from incorrect account allocations, resulting in the underpayment of benefits to other participants, or where the overpayment causes an impermissible forfeiture under Code Section 411."  MORE >>

"Overpayments that are a violation of the Internal Revenue Code require a correction in accordance with EPCRS, such as an attempt to recover the funds, and a notice to the participant indicating that the overpayment is not a permissible rollover. This is analogous to returns of excess deferrals, which are not eligible rollover distributions since they represent an amount that exceeded a legislative requirement, not a failure to follow the plan provisions. However, there is no need to correct de minimis overpayments."  MORE >>

"The Court recently schedule oral argument for January 22, 2025. It is hard to predict the outcome at this stage, particularly where the Court will be faced with a textualist or strict-construction argument based on ERISA that plaintiffs claim favors their interpretation of the statute. Either way, the Court's decision should provide some much-needed clarity on the pleading standard for ERISA prohibited transaction claims." [Cunningham v. Cornell Univ., No. 21-0088 (2d Cir. Nov. 14, 2023; cert. pet. granted Oct. 3, 2024)]   MORE >>

"At different points in the [September 25 oral argument], all three judges on the Second Circuit panel questioned the instructions the jury received before issuing its 2023 verdict in favor of Yale.... According to the employees, the judge should have instructed the jury that Yale could avoid damages only if it could prove that a prudent fiduciary 'would have' -- not 'could have'- made the same decisions." [Vellali v. Yale Univ., No. 16-1345 (D. Conn. Jun. 28, 2023; on appeal to 2d Cir. No. 23-1082)]  MORE >>

"In addition to forfeiture basics, this post provides a high-level overview of the recent forfeiture litigation, including all the fuss that has been caused across the retirement plan industry and specifically to 401(k) plan fiduciaries. The crux of the matter is that the litigating plaintiffs seek to use [DOL] regulations to trump the longstanding permitted usage of forfeitures under the IRS rules. This post also reviews important considerations and best practices for plan committees to mitigate risk."  MORE >>

"One of the simplest and most effective ways for [a participant] to safeguard his account is to regularly change his passwords and avoid using the same one twice.... The DOL also warns us all to be cautious when using public Wi-Fi in places like coffee shops, airports, or hotels ... As a service provider, the recordkeeper should have a written policy and internal detailed procedures on how it handles any potential breach.... Communication is key."  MORE >>

"[T]he reopening of the pension plan was clearly important to Boeing workers.... [T]he employee pays regardless of whether retirement benefits are provided through 401(k)s or defined benefit plans.... [A] very risk-averse individual could invest their 401(k) assets only in Treasuries and come out ahead of the Boeing defined benefit plan."  MORE >>

"Experts ... anticipate shifts in regulatory priorities that could bring both opportunities and challenges for plan sponsors, advisors, and participants. [1] Fiduciary rule: a likely reversal ... [2] ESG investing: back to basics ... [3] Tax legislation: a double-edged sword ... [4] Industry dynamics: shifting DOL priorities ... Despite the challenges, retirement plan advisors have opportunities to adapt and thrive in this evolving landscape."  MORE >>

"[One of ARA's] biggest priorities for the remainder of the Congress is to enact legislation that would permit the use of collective investment trusts (CITs) in 403(b) plans.... Many industry stakeholders are also anxiously awaiting action on the technical corrections legislation to the SECURE 2.0 Act."  MORE >>

"Even Chat GPT's quickie analysis -- which does not include performance and other myriad fees private investments charge -- immediately reveals the disclosed numbers are far too low to be believed.... So, the huge unanswered question is: How did the pensions, their auditors, lawyers, investment professionals, public stakeholders and state media somehow manage to overlook or hide -- for decades -- the obviously greater true fee amounts in an apparent brazen effort to make the costs look lower than they really were?"  MORE >>

"Although employers generally outsource administration of ERISA plans to service providers, employers retain a fiduciary duty to manage the plan for the benefit of the participants. The DOL appears to interpret this to mean that employers have a duty to safeguard plan data and assets from cybersecurity risks. In 2021, the DOL kicked off a cybersecurity initiative for ERISA plans ... The DOL has since conducted numerous investigations into the cybersecurity programs of ERISA plans."  MORE >>

"American employers and employees are facing a conundrum: heightened levels of workplace stress and burnout. This concern is exacerbated by ongoing rising costs of health care, financial vulnerability and looming worry about the future of their families ... [B]urnout is affecting nearly 3 in 5 American workers -- with a notable generational gap.... [E]mployees experiencing high levels of stress is now up to 38% in 2024 -- from 33% in 2023.... [A] growing number of employees would consider leaving their jobs for better benefits, even if it meant taking a pay cut (62%, compared to 53% in 2023)."  MORE >>