403(b) Plan Restatement Deadline Fast Approaching!

403(b) retirement plans are used by a wide variety of non-profits, including large university systems. These plans are required to be restated on IRS-approved documents in order to ensure they meet IRS requirements. The deadline to accomplish this, March 31, 2020, is fast approaching. New Formal Plan Documentation for 403(b) Plans In 2007. new final regulations governing 403(b) plans included sections focused on Read More

Third Party Sued for Alleged Fiduciary Breach Involving Retirement Plans and Health and Welfare Plans

A recent lawsuit, Chavez, et al. v. Plan Benefits Services, Inc., et al., focuses on a dispute regarding two benefit plans, a retirement plan, and a health and welfare plan sponsored by Training, Rehabilitation & Development Institute, Inc. (TRDI). The plan participants did not sue TRDI, the plan sponsor, but rather third party entities responsible for marketing and supporting these plans. Third Party Plan Read More

Circuit Court Determines One Plan Document May Serve as Both Plan and SPD

It takes a lot of paperwork to put together an ERISA-compliant benefit plan, so every time a process shortcut is provided in the form of a simplified reporting requirement, companies should look at the shortcut and determine if it offers them any benefits. A recent decision in federal court has found that companies can have a single document that serves as both the formal plan document and the summary plan Read More

In Surprise Reversal, Ninth Circuit Rules Fiduciary Breach Claim is Subject to Arbitration

A recent decision by the U.S. Court of Appeals for the Ninth Circuit found that arbitration is allowable to handle fiduciary breach claims when they are brought by an individual. In the case at hand, Charles Schwab was sued by a plan participant who claimed that Schwab breached their fiduciary duties and that certain transactions, specifically the holding of proprietary funds in a 401(k) plan, were prohibited by Read More

Beware! Layoffs and RIFs May Constitute Partial Plan Termination

Partial termination of a retirement plan can happen for reasons ranging from merging with another company to voluntary termination. Laying off a large enough portion of one’s workforce, due to a reduction in force or other reason, can result in a partial plan termination, something the business may want to avoid. What Creates a Partial Plan Termination? When layoffs impact more than 20% of total plan participants Read More

Can Business Associates Be Subject to HIPAA Civil Monetary Penalties?

HIPAA-covered business associates handle tasks ranging from health plan payments and health care operations to data storage and processing. For these businesses, being a business associate means HIPAA rules and their related civil monetary penalties apply when HIPAA data privacy, security, and even breach notification rules are violated. The Department for Health and Human Services (“HHS”) Office for Civil Rights Read More

Cash Your Retirement Plan Distribution Check! IRS Rules Participant’s Uncashed Check Includable in Gross Income

A recent revenue ruling issued by the IRS addressed whether an uncashed check, in this particular instance a retirement plan distribution check, was still included in an individual’s gross income. The IRS confirmed that an individual’s withholding and reporting obligations were the same regardless of whether the check was cashed or held. As a general rule, amounts distributed to plan participants as part of a 401(a) Read More

Can an Executive Recover 409A Excise Taxes from an Employer?

Employees, particularly executives, look closely at the full benefits package they are offered upon employment. Benefits, both health and retirement plans, are often major factors in choosing between different job offers for top tier candidates. Employers are expected to operate these plans in a reasonable fashion, and when they don’t they often find themselves subject to lawsuits alleging breach of fiduciary Read More

Fiduciary Lawsuits Highlight Importance of Service Provider Agreement Legal Reviews

When entering into a Service Provider Agreement for your 401(k) plan, legal review of the document itself is important to ensure that vendor fees are reasonable. Investment advisors, recordkeepers, and other service providers who help with your benefit plans are under increasing scrutiny due to a string of lawsuits and the Department of Labor’s fee disclosure rules. With increased transparency of fees came increased Read More

Plan Sponsors Take Note! IRS Stipulates that ACA Employer Penalties Cannot be Waived or Reduced

A recent Information Letter issued by the IRS discusses the employer mandate, also known as the employer shared responsibility payment (ESRP) and questions regarding waiver and hardship payments. In short, the IRS letter clearly stipulates that the Affordable Care Act (ACA) employer mandate penalties will not be waived or reduced. Applicable Large Employers (ALE) IRS Code Section 4980H lists penalties for ALEs that Read More