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Alternative Retirement Plan Investments: A Checklist

"Fiduciary duties still attach to decisions to add nontraditional investment alternatives to a plan's investment menus.... [P]lan sponsors must thoroughly evaluate alternative investments and any funds that invest in them.... [This article provides] a non-exhaustive list of questions fiduciaries may wish to consider before selecting any alternative investment."

SEC Issues Staff Guidance Furthering Policies of Defined Contribution Plan Executive Order

"The staff's revised position could substantially increase the number of [closed-end funds (CEFs)] that invest a large portion of their assets in private funds and that are available to defined-contribution plans ... even though [Accounting and Disclosure Information 2025-16] does not reference the executive order directly or mention defined-contribution plans.... The ADI cites several protections for investors in CEFs that invest in private funds. These protections may exceed those applicable to other vehicles available to defined-contribution plans."

New Kids on the Blockchain: Cryptocurrencies in 401(k) Accounts

"Rescinding [Compliance Assistance Release 2022-01] restores a more neutral stance to the regulatory environment. However, this does not mean that fiduciaries will be clamoring for cryptocurrencies and other digital assets as designated investment alternatives (DIAs) for their plans. Based on fiduciary duties and the volatility of most cryptocurrencies alone, prudent fiduciaries often will hesitate to allow such investments in a plan lineup."

Plan Sponsor and Asset Manager Considerations Under 401(k) Alternatives Executive Order

"[T]he order does not require the DOL to consider the use of direct stand-alone alternative investments. It directs the DOL only to provide guidance on selecting funds that include alternative assets.... Absent more expansive guidance, plans considering alternative investments generally can focus on collective investment trusts (CITs) or other professionally managed accounts."

District Court Grants Motion to Compel Discovery of Reinsurance Information for ERISA Plan

"The court found that a 'structural conflict may exist' regarding the relevant underlying plan documents and other documents and ordered limited discovery. The court also ordered limited discovery regarding the existence of reinsurance for the plan and the identity and authority of any such reinsurer." [THC-Orange County, LLC v. Regence BlueShield of Idaho, Inc., No. 24-0154 (D. Idaho Jun. 2, 2025)]

Unsafe Harbor? Deregulation and the Limit of the SECURE Act Safe Harbor for Selection of Lifetime Income Provider

"The preamble to the direct final rule explains that '[a]lthough the statutory safe harbor did not technically nullify or repeal the regulatory safe harbor, its existence offers an unnecessary and inefficient alternative and may inadvertently be a trap for the unwary.' On a closer read, however, the differences between the safe harbors may in fact be significant and far from noncontroversial. In divergence from the purpose of both safe harbors, the removal of the regulatory safe harbor may create a gap that could have the effect of chilling annuity sales going forward."

Takeaways from the SEC Roundtable on Executive Compensation Disclosure Rules

"[P]anelists representing issuers, advisors, and investors scrutinized many of the SEC’s disclosure rules, contemplated the utility of the disclosures provided, and discussed potential rule changes. ... Panelists were unanimous in remarking how CD&A disclosure has swelled over the years.... The requirement to disclose the ratio of a CEO's total compensation to the median total compensation of all other company employees drew significant criticism.... One participant remarked that the [pay-vs-performance] rule resulted in disclosure written by economists, for economists."

Executive Order Seeks to Eliminate Discrepancies in Drug Pricing Between United States and Other Countries

"While this administration may navigate the prior administrative law issues, several questions must first be addressed, including [1] Definition of 'developed' countries ... [2] Impact on generics and biosimilars ... [3] Framework for direct-to-consumer sales ... [4] Role of pharmacy benefit managers and insurance reimbursement ... Strategic considerations for drug manufacturers include ... [1] Participation in the notice and comment process ... [2] Internal review of drug prices ... [3] Preparing for antitrust scrutiny ... [4] Direct-to-consumer sales ... [5] Negotiations with foreign countries."

How Plan Sponsors Can Make a Plan Less Susceptible to Litigation in the Wake of Cunningham v. Cornell

"Consider adding an arbitration clause to the plan document.... Create prudent processes and procedures for selecting, monitoring, and removing plan service providers.... Have a well-developed investment policy statement that has clear guidance on how and when to remove underperforming funds. Have regular meetings of plan trustees and other plan fiduciaries.... Engage the plan's counsel or service providers for fiduciary training at least annually and ensure any new plan trustees get training up front."

Faulty COBRA Notices Can Cost Big Bucks

"While we don't know the exact number of class action plaintiffs, we do know that Ms. Marrow was one of three covered participants in her family.... For the Marrows alone, this would amount to $452,100 ... The plaintiffs argue that the COBRA notice incorrectly stated that qualifying beneficiaries had 60 days from their last day of employment to elect COBRA continuation coverage.... The plaintiffs also argue that expressing the deadline as a number of days from a specific date requires qualified beneficiaries to perform calendar calculations." [Marrow v. E.R. Carpenter Company, Inc., No. 23-2959 (M.D. Fla. Feb. 4, 2025)]