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If You Have a Top Hat Plan, This Court Case Is Worth Watching (PDF)

"The Maryland federal district court in Bond v. Marriott International Inc. ... found the plan in question was a top hat plan and that the statute of limitations didn't apply to the suit, even though the complaint was filed 20 years after the participant left employment. The case is now being appealed by Marriott, and the [DOL] recently filed a friend-of-the-court brief on behalf of the former employees.... Little guidance exists on what constitutes a select group of management or highly compensated employees. It's generally beneficial for plan sponsors to limit these plans as much as possible, to help ensure they have top hat status."

Plan Sponsors Can Learn Several Powerful Lessons from Recent Wear-Away Case (PDF)

"It is important that key players in a company's retirement plan understand their roles as fiduciaries and the implications of being one. Periodic training is a must.... Plan provisions, especially plan changes, must be communicated clearly. There can be no sugar-coating adverse news for participants ... As soon as you become aware of a lawsuit against the plan, make sure you send a memo to all affected departments advising them not to destroy any documentation that could be related to the case." [Osberg v. Foot Locker, Inc., No. 07-cv-1358 (S.D.N.Y. Sept. 29, 2015)]

Ten Things Plan Fiduciaries Should Avoid (PDF)

"In recent court case, Tussey v. ABB, Inc., ... the judge found that the plan fiduciaries breached their fiduciary duties and were jointly and severally liable for $13.4 million lost by the Plan due to failure to monitor recordkeeping fees and negotiate rebates and $21.8 million lost by Plan due to mapping one investment fund to another. In addition, the service provider was held jointly and severally liable for $1.7 million for lost float income. Lessons learned from this case are at least 10 things Plan fiduciaries should avoid[.]"

Schedule J of the Proposed Form 5500 Means Increase in Data Collection and Preparation Costs

"If the proposed revisions to the Form 5500 are accepted, Schedule J will be a new addition to the Form 5500 Schedules for group health plans covered by Title I of ERISA. The amount of information requested is staggering. Schedule J will have to be filed by all health & welfare plans; the less than 100 participant exception goes away.... The Schedule J will provide information regarding contributions, claims, benefit structure and compliance information[.]"

IRS Provides Determination Letter Guidance Revenue Procedure 2016-37

"Revenue Procedure 2016-37 changes the remedial amendment period and is geared to the [Required Amendments List (RAL)]. The remedial amendment period for a change included in the RAL will generally be the end of the second calendar year following the year in which the list is issued. A change will not appear on the RAL until the IRS has issued guidance including any model amendments. The first RAL will apply to changes effective during the 2016 calendar year."

Retirement Plan Record Retention -- Whose Job Is It Anyway? (PDF)

"[T]he 9th Circuit [recently] held that the burden of proof shifts to the employer ... when a claimant has made a prima facie case that he is entitled to a benefit but lacks access to key information that the [employer] controls.... [R]ecords for retirement plans should be kept until all benefits have been paid, the trust has been dissolved and sufficient time has passed such that the plan will not be the subject of an audit." [Estate of Barton v. ADT Security Serv. Pension Plan, No. 13-56379 (9th Cir. Apr. 21, 2016)]

IRS Guidance Reflects Shift to Audits from Reviewing Plan Documents (PDF)

"It appears that the IRS has begun channeling its resources to audits rather than reviewing retirement plan documents. As part of this refocus, the IRS has issued four pieces of guidance on determination letters. The guidance: [1] eliminates the five-year remedial amendment cycle system for individually designed plans.... [2] means expiration dates on determination letters issued before Jan. 4, 2016, are no longer operative; [3] decreases Voluntary Correction Program fees in certain cases; and [4] increases determination letter application fees in some circumstances."

The Impact of Opt-Out Incentives on ACA Affordability Calculations

"Until final regulations are issued, employers with opt-out arrangements in effect before December 16, 2015 do not have to reflect opt-out incentives in affordability calculations nor include on the 1095-C.... Employees can include the opt-out incentive in the cost of coverage should they apply for a premium subsidy. Proposed and final regulations are expected to address both conditional and un-conditional opt-out incentives."

Market Volatility: How Concerned Should Retirement Plan Fiduciaries Be? (PDF)

"While a plan sponsor cannot control the external forces that affect financial markets, plan sponsors can mitigate risk for their retirement plans by: [1] Following a documented decision-making process. [2] Identifying the key internal and external players and ensuring that all parties know their responsibilities. [3] Working with investment advisers to develop a defined contribution plan fund line-up that suits the plan's participant demographics. [4] Developing a defined contribution plan investment policy ... [5] Working closely, if a defined benefit plan, with the plan's actuaries and investment advisers, to develop an investment strategy to match plan benefit liabilities with assets.... [6] Monitoring any investment decisions/policies/strategies periodically to ensure that what you expected is happening.... [7] Documenting the process and the decisions."

Fed Agencies Closely Watching Independent Contractor vs. Employee Debate -- and Plan Sponsors Should, Too (PDF)

"If DOL, the states and IRS truly share information and coordinate compliance efforts as intended, it will not be long before employee benefit plans are targeted for independent contractor treatment.... Excluding eligible employees is a qualification issue that could lead to serious financial consequences for retirement plan sponsors."