Recent Blog Posts
- DOL Provides Guidance for Private Equity Investments in 401(k) Plans Employers that are fiduciaries of participant-directed individual account plans (such as 401(k) plans) subject to the Employee Retirement Income Security Act of 1974, as amended (‘Plans” and “ERISA”, respectively) should be pleased with the position taken by the Department of Labor (“DOL”) in an information letter dated June 3, 2020 (the “Letter”) addressing the use of private equity investments in designated investment alternatives offered in Plans. The DOL states that, subject to the standards and considerations set forth in the... More
- What the DOL Giveth, the IRS (May) Taketh Away: Benefits Guidance in the Time of COVID-19 In EBSA Disaster Relief Notice 2020-01, “Guidance and Relief for employee Benefit Plans Due to COVID-19 (Novel Coronavirus) Outbreak” ( “Notice”), the DOL provided sponsors of defined contribution plans subject to ERISA relief from DOL enforcement action for failure to timely forward participant contributions and loan repayments to the plan during the period from March 1, 2020, and to the 60th day following the announced end of the National Emergency. This DOL relief, however, appears to be limited to ERISA... More
- DOL Gives Extra Time to Plan Participants and Beneficiaries: Benefits Guidance in the Time of COVID-19 Plan participants and their beneficiaries may now have extra time to exercise some of their rights under the employee benefit plans in which they participate. On April 28, 2020, the Department of Labor, the Internal Revenue Service, and the Department of the Treasury issued a joint notice extending certain timeframes applicable to employee benefit plans. The joint notice was published as a final rule in the Federal Register on May 4, 2020 (“Final Rule”), issued pursuant to Section 518 of... More
- Benefits Guidance in the Time of COVID-19: RIFs, Furloughs, Layoffs, and Leaves of Absence As the COVID-19 state of emergency continues, businesses are implementing and considering a variety of employee-related measures to manage the impact of the crisis. While some businesses may avail themselves of payroll protection programs and loans to maintain the status quo, others may be faced with having to implement reductions-in-force (RIFs), furloughs and layoffs. Added to this, employers may be faced with larger numbers of leaves of absence both because of COVID-19-related health and family care reasons, but also when... More
- Temporary Benefit Strategies to Immediately Help Workers: Benefits Guidance in the Time of COVID-19 The closure orders issued by federal and state government authorities across the United States have resulted in the reduction and loss of income for a significant percentage of the U.S. workforce. On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act (the “Coronavirus Act”), effective April 1, 2020, providing relief for certain eligible families, employers and businesses. Further legislation is on the horizon. Meanwhile, under existing law, the Internal Revenue Code of 1986, as amended... More
- May Employees Take Hardship Distributions Under Their 401(k) Plan? Benefits Guidance in the Time of COVID-19 [Updated on April 17, 2020]
As temporary layoffs and furloughs become more prevalent during the COVID-19 outbreak, employers have been asking whether they may allow employees to take hardship distributions under their Section 401(k) plans for expenses and losses resulting from COVID-19.
Under the IRS hardship distribution final regulations, employers were permitted to add a new safe harbor hardship category that would allow an employee to take a hardship withdrawal to cover expenses and losses (including loss of income) incurred by the... More
- Employer-Sponsored Leave Sharing or Leave Donation Programs: Benefits Guidance in the Time of COVID-19 Many employers are looking for ways to assist employees directly impacted by COVID-19 and employees on temporary lay-off or furlough who are exhausting their available paid-time-off (PTO). One option employers often ask about is the feasibility of adopting a leave sharing or leave donation program that would permit employees to donate vacation, sick leave or PTO to employees who need the additional time because they have been impacted by COVID-19. Properly structured, leave donated to a co-worker is a viable... More
- Monitoring ERISA Investment Fiduciaries Fiduciaries of employee benefit plans subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) that appoint investment managers (“Appointing Fiduciaries”) will be interested in the opinion of the U.S. District Court for the Western District of Pennsylvania in Scalia v. WPN Corporation, et al (“WPN”) regarding their duty to monitor investment fiduciaries. Given the potential risk related to a breach this fiduciary duty, the WPN opinion is likely to be an important one for Appointing Fiduciaries.
- Notice to Financial Advisers: State Regulators Are Enforcing the DOL Fiduciary Rule Financial institutions and advisers that manage retirement plan assets and are subject to the regulations of the Department of Labor (“DOL”) under the Employee Retirement Income Security Act of 1974, as amended, (“ERISA”) regarding fiduciary duties (the “Fiduciary Rule”) may also be subject to state law violations for failure to comply with the Fiduciary Rule. The Enforcement Section of the Massachusetts Division of the Office of the Secretary of the Commonwealth (the “Massachusetts Enforcement Section”) filed an administrative complaint (the... More
- Plan Sponsors: Potential Targets for IRS Compliance Examinations The IRS recently released the Tax Exempt and Government Entities FY 2018 Work Plan (the “2018 Work Plan”) which provides helpful information for sponsors of tax-qualified retirement plans about the focus of the IRS’ 2018 compliance efforts for employee benefit plan. While the 2018 Work Plan is a high-level summary, it does address IRS compliance strategies for 2018 and should assist plan sponsors in administering their retirement plans.
The Work Plan provides that for fiscal year 2018, the IRS compliance strategies... More