Search the News Archive

Litigation Over Proxy Statement Disclosure -- Another Update

Attorney Michael Melbinger, author of the linked article, writes to contribute "some (hopefully) useful advice to companies that have not yet filed their proxy statements and are seeking approval of a new or amended plan stock plan (including those seeking only approval of additional authorized shares or performance goals for 162(m)). In a measured response to the plaintiffs' claims in many of these lawsuits and letters, [Winston & Strawn has been] suggesting additional disclosure regarding dilution and other data that would allow that figure to be calculated, including the following tweaks (to the extent not already in the disclosure): ..."

The Duty of Advisors to Investigate Their Independence as to the Compensation Committee

"Inquiring minds want to know: 'Mike, how is Winston figuring out how to test for a "business or personal" relationship between the Firm and any director or executive officer of the client?' The answer is that law firm (and most other professional service firms) tend to have a good idea of all of their connections and relationships within a client."

IRS Finalizes Catch-Up Contribution Regulations: Takeaways for Plan Sponsors

"How will the payroll system calculate the FICA wage threshold of $145,000 for purposes of identifying employees subject to the new Roth catch-up mandate? ... Does the 401(k) plan provide for a 'spillover' catch-up election? Or does the plan require participants to make a separate catch-up election? ... Will the employer [1] implement a deemed Roth catch-up election, or [2] cancel existing elections and require that participants subject to the Roth catch-up mandate make a new Roth catch-up contribution election? ... Communications will be needed to educate employees ... Amendments are generally required by December 31, 2026, but it may be advisable to record the design decisions as they are made."

New Executive Order Directs Agencies to Facilitate 401(k) Access to Private Equity, Cryptocurrency, and Other Alternative Investment

"As plan fiduciaries are approached by their recordkeepers and investment consultants about possibly adding alternative assets to their DC plans, they will want to [1] consider the key elements of the 2020 Information Letter and the 2021 Supplement.... [2] Monitor forthcoming guidance from the DOL, SEC, and IRS ... [3] Identify experts that can help plan fiduciaries assess whether these alternative assets are right for DC plan participants ... [4] Review the current Investment Policy Statement and governance frameworks ... [5] Evaluate litigation risk."

Health and Welfare Developments for Plan Sponsors

"[1] The One Big Beautiful Bill Act ... [2] New York City Paid Prenatal Leave ... [3] [HHS] Marketplace Integrity and Affordability Final Rule ... [4] [IRS] Revenue Procedure 2025-25: [ACA] Affordability ... [5] IRS Revenue Procedure 2025-26: Employer Shared Responsibility Payments (ESRPs).... Many of [these changes] provide plan sponsors with increased flexibility to optimize benefits offered to their eligible employees and their dependents.... Plan sponsors should review their offerings now to implement any changes before the beginning of the 2026 plan year."

Supreme Court to Address Timing of Actuarial Assumptions in Determining Multiemployer Plan Withdrawal Liability

"If the Court affirms the D.C. Circuit, it may result in less predictable cost estimates for employers. Employers have the right to request estimates of their withdrawal liability annually, but the usefulness of those estimates in making business decisions is diminished when plans and actuaries are able to retroactively change assumptions." [M & K Employee Solutions, LLC v. Trustees of the IAM National Pension Fund, No. 22-7157 (D.C. Cir Feb. 9, 2024; cert. pet. granted Jun. 30, 2025 No. 23-1209)]

Long-Term Part-Time Employee Retirement Plan Rules

"[To] ease your administrative burden you may: [1] Eliminate any hour requirement for eligibility purposes, or [2] Require no more than 500 hours in a 12-month computation period. To avoid additional costs, you can impose a different (but still compliant) service requirement to receive employer contributions for all employees, or applicable only to part-time, temporary, or seasonal employees."

Executive Order Targets Prescription Drug Price Reduction

"[Executive Order 14273] sets forth the administration's statement of objectives to reduce prescription medication costs by promoting competition and eliminating practices that lead to high drug prices.... [T]he executive order sets forth a broad agenda to impact Medicare prescription drug costs, including in the Medicare Part D program."

Pension Risk Transfer Litigation Targets Multiply; Courts Finally Weigh In

"Although the Alcoa and Lockheed cases involve similar facts and allegations, the courts reached opposite conclusions.... Plan sponsors and fiduciaries should continue to carefully consider the guidance in the Department's Interpretive Bulletin 95-1 when choosing a PRT annuity provider." [Konya v. Lockheed Martin Corp., No. 24-0750 (D. Md. Mar. 28, 2025); Camire v. Alcoa U.S.A. Corp., No. 24-1062 (D.D.C. Mar. 28, 2025)]

CMS Announces Early Termination of Four Medicare Payment Models

"Without providing any specifics as to the results of its ongoing analysis of the affected programs, CMS announced its decisions to terminate four models early: [1] Maryland Total Cost of Care (original performance period 2019-2026); [2] Primary Care First (original performance period 2021-2026); [3] ESRD Treatment Choices (original performance period 2021-2027 ... and [4] Making Care Primary (original performance period 2024-2034)."