Archives: Defined Benefit Plans

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Supreme Court: Plaintiffs Who Suffered No Injury Lack Standing to Sue under ERISA

The plaintiffs’ expectations surely suffered a blow after reading the Supreme Court’s initial observation in their case: “If [the plaintiffs] were to lose this lawsuit, they would still receive the exact same monthly benefits that they are already slated to receive, not a penny less. If [the plaintiffs] were to win this lawsuit, they would still receive the exact … Continue Reading

IRS Provides Further COVID-19 Relief Related to Postponed Deadlines for Time Sensitive Actions

On May 28, 2020, the Internal Revenue Service (IRS) released an advanced version of Notice 2020-35, which amplifies the relief it had previously provided from deadlines for certain time-sensitive actions.  The relief offered by Notice 2020-35 is provided because of the ongoing COVID-19 pandemic and is in addition to the relief provided by Notice 2020-18, … Continue Reading

Will New Stimulus Bill Include Multiemployer Pension Reform?

What could be in the next stimulus bill in response to the COVID-19 pandemic? Congress reportedly is working on a bill (dubbed “Stimulus 3.5”) that includes additional funding for the Paycheck Protection Program created by the CARES Act.  Will the new stimulus bill address long-awaited reforms to the multiemployer pension plan system? The imminent collapse … Continue Reading

IRS Extends the Form 5500 Due Dates for Some Employee Benefit Plans

The Internal Revenue Service has broadened the filing and payment relief provided under prior guidance. IRS Notice 2020-23 postpones, among other relief, the due date for employee benefit plans required to make the Form 5500 series filings due on or after April 1, 2020, and before July 15, 2020.  Plans with original due dates or … Continue Reading

Critical Qualified Plan Fiduciary Issues For Employers To Consider In Light Of Covid-19

With the business disruptions and market turbulence being wrought by COVID-19, many employers sponsoring qualified retirement plans are facing key decisions about their 401(k), profit sharing, defined benefit, and cash balance plans.  From considering potential cost-savings measures such as suspending safe harbor contributions to a 401(k) plan and/or discretionary contributions to a profit sharing plan, … Continue Reading

The CARES Act Effect on Retirement Plans

On March 27, 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act.  The Act largely stabilizes fragile industries, provides loans and tax credits to businesses tied to their retaining their workforces during these uncertain times, and offers additional unemployment relief to employees hurt by COVID-19.  But the CARES Act … Continue Reading

The IRS Extends Looming Restatement Deadlines

The IRS announced on March 27th via its website the extension of the initial remedial amendment period for Section 403(b) plans from March 31, 2020, to June 30, 2020.   It also extended the deadline for the second six-year remedial amendment cycle for pre-approved defined benefit plans from April 30, 2020, to July 31, 2020. 403(b) … Continue Reading

2nd Circuit Pension Liability Ruling Is A Big Win For Employers

As published by Law360 (January 13, 2020, 5:43 PM EST) — Following oral arguments that were held in February 2018, in a long-anticipated decision in the National Retirement Fund v. Metz Culinary Management Inc., the U.S. Court of Appeals for the Second Circuit held that a multiemployer pension fund’s use of a lower interest rate that was … Continue Reading

Building and Construction Industry Exemption from Withdrawal Liability

Since its passage late in 1980, the Multiemployer Pension Plan Amendments Act (MPPAA) has proven to be a hindrance to the profitable operations of employers that contribute to multiemployer pension funds by imposing a surprise, and often expensive, obligation (the “withdrawal liability”) on employers across many industries. However, the construction industry is one of a … Continue Reading

Republicans Propose Wholesale Reform of Multiemployer Pension Plan System

In a white paper and technical explanations, Republican Senators Charles E. Grassley (Chairman of the Senate Committee on Finance) and Lamar Alexander (Chairman of the Senate Committee on Health, Education, Labor and Pensions) have proposed reforms to the multiemployer pension plan system. If implemented, the proposed reforms (not yet introduced as a bill) would represent … Continue Reading

Court Rejects Equitable Exception to MPPAA’s ‘Pay Now, Dispute Later’ Regime

A withdrawing employer must make withdrawal liability installment payments during the pendency of an arbitration proceeding contesting the existence of withdrawal liability, a federal court has affirmed, rejecting the employer’s attempt to recognize an equitable exception to the general “pay now, dispute later” requirement. Boilermaker-Blacksmith National Pension Trust v. PSF Industries, No. 18-2467-JWL (D. Kan. Nov. … Continue Reading

North Carolina Court Awards $41 Thousand-Plus Penalty for Failure to Produce Documents Requested by Plan Participants

Section 104(b)(4) of ERISA provides that a plan administrator must respond to a written request for certain documents (including the plan documents and summary plan description) by a participant or beneficiary by providing the requested documents.  Section 502(c)(1) of ERISA and Regulation § 2575.502(c)-1 provide that a plan administrator who fails to do so within … Continue Reading

First Crack in the Armor of the Segal Blend?

The Segal Group is the premier actuarial firm in the country providing services for hundreds of multi-employer pension funds.  For almost 40 years it has used its own methodology, known as the “Segal Blend” to calculate employers’ withdrawal liability successfully without an adverse ruling by either a court or an arbitrator in hundreds of cases. … Continue Reading

The IRS Doesn’t Disappoint…Again

As imagined by plan sponsors of closed defined benefit pension plans, the IRS issued Notice 2019-49, the fifth extension for an additional year of the temporary nondiscrimination relief for “closed” defined benefit pension plans originally announced by the IRS during 2014.  The extended relief applies to plan years beginning before 2021 for those “closed” plans … Continue Reading

How Multiemployer Pension Plans Continue To Extract More From Contributing Employers Than What They Bargained For

Contributing employers to multiemployer pension plans (“MEPPs”) are commonly surprised that their obligations to such a plan can extend well beyond the contributions required under a collective bargaining agreement (“CBA”) negotiated with a union.  The most significant extra-contractual obligation is withdrawal liability, a statutory exit fee imposed on employers that leave a plan that has … Continue Reading

Required Minimum Distributions

The aging of the baby boomer generation has increased the level of scrutiny with which the Department of Labor, Employee Benefits Security Administration (“EBSA”) will review the efforts of pension plans to locate missing plan participants who did not receive reported benefits.  The focus of the EBSA which began with a review of the efforts … Continue Reading

Changes to Employee Benefit Plans May Create Unforeseen Disclosure Deadlines

Believe it or not, it may be time to distribute a new Summary Plan Description (SPD) to include all changes made since the last issuance or a Summary of Material Modifications (SMM) for any amendments adopted during the 2018 plan year. The Rules:  The Department of Labor (DOL) regulations and Employee Retirement Income Security Act … Continue Reading

IRS No Longer Forbids Pension Plans From Offering Lump Sum Payouts To Retirees Currently Receiving Payments

Over the past several years, sponsors of defined benefit pension plans have examined and implemented ways to reduce their pension liabilities. This is sometimes referred to as “de-risking.” One de-risking option is for a plan to offer a limited-duration window where participants who normally do not have the option to do so can elect to … Continue Reading

Court Finds Union’s Withdrawal Liability Indemnification Obligation of Limited Duration

Congress enacted the withdrawal liability provisions of the Multiemployer Pension Plan Amendments Act (MPPAA) with the ultimate goal of protecting participants and beneficiaries entitled to benefits from multiemployer pension plans.  Congress observed that such plans are financially burdened whenever an employer withdraws and permanently ceases to pay contributions and decided that the burden should be … Continue Reading

The Saga Continues for Multi-Employer Pension Funds

            This is another blog on our monitoring the status of defined benefit multi-employer pension funds.  Since this author last wrote to you, it has been revealed that the Central States Pension Fund is scheduled to become insolvent sometime in 2025.  Worse yet, it has been announced that the multi-employer fund of the Pension Benefit … Continue Reading

The IRS Doesn’t Disappoint

As anticipated by plan sponsors of closed defined benefit pension plans, the IRS issued Notice 2018-69, the fourth extension for an additional year of the temporary nondiscrimination relief for “closed” defined benefit pension plans originally announced by the IRS during 2014.  The extended relief applies to plan years beginning before 2020 for those “closed” plans … Continue Reading

Segal Blend Litigation, Part Two: New Jersey District Court Holds That Use of Segal Blend Did Not Violate MPPAA

As our earlier article reported, Judge Robert W. Sweet of the U.S. District Court for the Southern District of New York had recently held that a multiemployer pension fund’s use of the “Segal Blend” to calculate a withdrawn employer’s withdrawal liability violated the provisions of the Employee Retirement Income Security Act (“ERISA”), as amended by … Continue Reading

DOL Continues Investigating Defined Benefit Plans Regarding Procedures for Locating Participants and Paying Benefits at Mandatory Retirement Age

The U.S. Department of Labor (DOL) publicized last year its stepped up enforcement efforts inquiring about procedures used by larger defined benefit plans for locating, and then beginning payment of benefits to, terminated vested participants who have reached the age when the plan mandates benefits must begin. Those audit activities are continuing. For years, the … Continue Reading

Pension Plan Suffers Cybersecurity Attack, ERISA Advisory Council Offers Cybersecurity Recommendations to DOL

It has been reported that infamous bank robber, Slick Willie Sutton, once said, “I rob banks because that’s where the money is.” Data thieves, understandably, have a similar strategy – go where the data is. The retail industry knows this as it has been a popular target for payment card data. The healthcare and certain … Continue Reading
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