Among the provisions of SECURE 2.0 (effective December 29, 2022) welcomed by plan sponsors were the additions to the Internal Revenue Code that allow qualified plans to refrain from trying to recoup an “inadvertent benefit overpayment” (referred to here as an IBO), and from having to restore such payments to the plan. In addition, the
DOL Expands Fiduciary Obligations for Cybersecurity to Health and Welfare Plans
A little more than three years ago, the U.S. Department of Labor (DOL) posted cybersecurity guidance on its website for ERISA plan fiduciaries. That guidance extended only to ERISA-covered retirement plans, despite health and welfare plans facing similar risks to participant data.
Last Friday, the DOL’s Employee Benefits Security Administration (EBSA) issued Compliance Assistance Release
Use of Plan Forfeitures Not the Slam Dunk It Used to Be
A recent rash of class action lawsuits in California claim that using forfeitures to reduce future employer contributions to tax-qualified retirement plans runs afoul of the Employee Retirement Income Security Act (ERISA). These cases have continued to advance despite their central claim seeming to contradict long-standing Internal Revenue Service (IRS) guidance for the permitted use
SECURE 2.0 Series Part 9: Now It’s Easier Than Ever to Clean Up Those Nasty Little Messes!
The SECURE 2.0 Act of 2022 (the Act) contains several provisions that liberalize the rules for fixing particular retirement plan administrative mistakes that happen occasionally. The IRS has a comprehensive program for correcting retirement plan failures, the Employee Plans Compliance Resolution System (EPCRS), including a self-correction program and a voluntary compliance program (VCP).
Secure 2.0 in the Consolidated Appropriations Act, 2023
As expected, the SECURE 2.0 Act of 2022 (SECURE 2.0), an extensive piece of legislation aimed at retirement plan reform, is included in the Consolidated Appropriations Act, 2023 (the Spending Bill). The 4,000+ page, $1.7 trillion Spending Bill was released early morning on Tuesday, December 20, with a passage deadline of Friday, December 23. If
‘Tis the Season… to Consider ESG Investments in Your 401(k) Plan
We recently summarized the regulatory back and forth of the past few years relating to environmental, social, and corporate governance (“ESG”) factors and their impact on ERISA retirement plans and the fiduciaries that oversee them.
As expected, the Biden administration released a proposed rule last year that re-opened the door (previously closed by the Trump
Is Crypto Too Cryptic for Your 401(k) Plan?
It started sometime last year and, in hindsight, was inevitable. Clients with 401(k) plans and a crypto-savvy employee population began asking whether they could offer cryptocurrency as a plan investment option. In the 401(k) world, where even a self-directed brokerage window with built-in investment limitations can be too risky, the answer seemed obvious – watch
Do Employers Need a CISO for ERISA Compliance?
According to a recent survey, about 45% of companies do not have a Chief Information Security Officer (CISO). As West Monroe’s “The Importance of a CISO” observes, it would be terrific for all organizations to have a CISO, but that simply may not be practical for some, particularly smaller organizations. Recent internal
2022 Cost of Living Adjustments for Retirement Plans
The Internal Revenue Service recently announced its cost-of-living adjustments applicable to dollar limitations on benefits and contributions for retirement plans generally effective for Tax Year 2022 (see IRS Notice 2021-61). Most notably, the limitation on annual salary deferrals into a 401(k) or 403(b) plan will increase from $19,500 to $20,500. The more significant dollar
Plan Defends Valuation of Accounts in Midst of COVID-Related Market Volatility
A 401(k) plan and its administrators are defending the administrator’s decision to require a special valuation of former employees’ account values, given extraordinary market changes due to the COVID-19 pandemic. Under the terms of the plan at issue, when a former employee seeks a distribution of his or her plan account, the account is typically