The Department of Labor (DOL) is once again heading toward potential legal challenges following its latest proposal of a standard uniform fiduciary and compliance regime. As per the Department’s official dossier from November 3, registered investment advisers, brokers, insurance agents, and other sellers of services in the individual retirement account marketplace could all find themselves…
In a recent move that may prove a real scare for some, the Department of Labor (“DOL”) on October 31, 2023, more aptly known as Halloween, issued a release proposing changes to the 1975 rule. The “1975 Rule” defines when institutions and individuals are providing fiduciary “investment advice” to employee benefit plans. These plans are…
In an update of an ongoing legal dispute, longtime employees of a subsidiary of Kinder Morgan Inc. have recently gained the right to compel an outside attorney for the company to take part in a deposition. The involved lawsuit claims that several corporate acquisitions have led to reductions in their pension benefits. Magistrate Judge Dena…
The Employee Retirement Income Security Act (ERISA), the Internal Revenue Code (IRC), and the Public Health Service Act (PHS) all contain specific provisions that impact group health plan contracts. In short, these provisions, interpreted in layman’s terms, place prohibitions on group health plans and issuers of such plans from enforcing what are colloquially known as…
In a recent development, the White House Office of Management and Budget received a proposal from the Department of Labor (DOL) to redefine the fiduciary rule under the Employee Retirement Income Security Act (ERISA). This proposed amendment could potentially extend coverage to more individuals involved in employer-sponsored retirement plans. This information was provided by Ary…
In a recent development, the Supreme Court has refrained from clarifying the enforceability of mandatory arbitration provisions in fiduciary breach claims, a topic of increasing significance in light of the surge in class action litigation against 401(k) plans in recent years. This decision continues to leave corporations and law firms in a state of uncertainty….
In August 2023, American Airlines, Inc. filed a motion to dismiss a class action lawsuit accusing it of putting employee retirement savings at risk by investing in environmental, social and governance (ESG) funds. The lawsuit claims these investments were managed by BlackRock and others. The allegations were brought forward by an American Airlines pilot, who…
The October Monthly Minute primarily focuses on two intriguing legal aspects that merit attention – The Sixth Circuit’s decision that emphasizes the adequacy of claim procedures and related judicial review standards, and the Supreme Court’s reluctance to get involved in the arbitration clause enforceability in ERISA litigation. Both topics are of emerging importance and carry…
Serving as a fiduciary for your employer’s retirement plan layers on a whole new set of responsibilities and obligations. As per the Employee Retirement Income Security Act (ERISA), a fiduciary has the duty to act prudently – a reasonable and conscientious action taken in the handling and investment of plan funds. However, it is important…
In a recent development, the Supreme Court has opted not to offer clarification on the matter of enforceability pertaining to mandatory arbitration for claims of fiduciary breach. This development has brought to attention the ongoing debate on whether mandatory arbitration provisions equipped with class action waivers serve as an effective solution to the growing wave…
A Biden administration proposal, if finalized, may trigger a re-evaluation of coverage for mental health benefits by major company sponsors of health plans. This is according to several national groups representing employers who expressed their views in recent public comments on the proposed regulations. A particular point of contention are the proposed rules from the…
Amidst an environment where technology is scaling up operations across different sectors, there is an ongoing strike against technology-savvy Third Party Administrators (TPAs). As per a report published by JDSupra, the issue lies in the changes and advancements, yet the consistency of the government’s random audit processes. For legal professionals advising corporations and law firms,…
The U.S. Department of Labor (“DOL”) released a final rule on December 1, 2022, covering the investment duties of fiduciaries under the Employee Retirement Income Security Act of 1974 (ERISA)—commonly known as the “ESG Rule”. This regulatory update has brought to light anew the proxy voting requirements and their consequential impact on Plan Asset Managers….
Open Enrollment Season – the period that wakes employers from their slumbers and plunges them into lengthy decision-making on employee benefits. The year of 2024 is no different and holds its own set of unique challenges. In light of recent developments and the upcoming enrollment season, employers too need to consider several significant issues. The…
The Department of Labor (DOL) is ushering in changes that will affect the Employee Retirement Income Security Act (ERISA) fiduciaries and private fund managers with their latest final Environmental, Social, and Governance (ESG) investing and proxy voting regulations. These modifications are set to become effective on December 1, 2023. These regulatory modifications stand to influence…
401(k) plan provider contracts often reveal an array of complexities and issues that may not be immediately apparent to the untrained eye. While they feature in our daily lives, these contracts are far from ordinary and have proved especially challenging for legal professionals across the globe. Lawyer Ary Rosenbaum from The Rosenbaum Law Firm P.C….
Multinational investment bank Citigroup Inc has developed a unique approach for using its own employee retirement plans to meet racial diversity goals without violating stringent federal benefits laws. Recently, the Biden administration’s primary worker benefits regulator granted Citi a rarely provided advisory opinion (Advisory Op. 2023-01A), the first one since January 2020. This advisory trails…
The U.S. Department of Labor (DOL) has released an advisory opinion that offers guidance on the Employee Retirement Income Security Act’s (ERISA) implications associated with a racial equity program initiated by Citigroup Inc. (Citi). The advisory opinion, which was issued on September 29, 2023, addresses Citi’s commitment to subsidize some or all investment management fees…
In recent news on ERISA litigation, a Michigan Court has dismissed key class-action lawsuits around investment options and administrative fees. The dismissal marks a turning point in the ongoing legal understanding and interpretation of the Employee Retirement Income Security Act (ERISA). Defined by class-action lawsuits targeting fiduciaries of 401(k) and other retirement plans, the primary…
In the realm of pension plan administration, the issue of cybersecurity risk management is becoming more prominent. Following recent data breaches affecting pension systems and their beneficiaries across the nation, administrative officials are under increasing scrutiny from the Department of Labor regarding their cybersecurity policies and procedures. Nossaman LLP’s Ashley Dunning and Michelle McCarthy hosted…
The United States Court of Appeals for the Fourth Circuit has recently established new standards for plaintiffs seeking unjust enrichment as an equitable remedy under the Employee Retirement Income Security Act (ERISA). This development offers clarity about the circumstances under which a plaintiff may seek a monetary recovery under § 502(a)(3) of ERISA, a section…
In late 2022, the U.S. Department of Labor (DOL) issued the final regulations addressing the responsibilities of ERISA fiduciaries when considering environmental, social, and governance (ESG) factors in investment decisions. These regulations also govern the exercising of shareholder rights, such as voting proxies, that might impact ERISA-covered clients. The new DOL rule on proxy voting…
In the world of ERISA litigation, keeping an eye on recent decisions can be informative and potentially impactful for corporations and law firms alike. This October 2023 edition of The Friday Five, provides a concise exploration of recent rulings. Saul Ewing LLP highlights cases that cover a wide array of topics, including the questionable effect…
In the world of venture capital and finance, acronyms and terms can often become convoluted, leaving both investors and entrepreneurs perplexed. One such term that has become prevalent among U.S.-based investors is “MRL”, which stands for a management rights letter. Despite its commonality, many are left wondering: “What is an MRL?” and “Why does this…
In the past month, plaintiffs have filed two separate lawsuits, Dimou v. Thermo Fisher Scientific, Inc. and Rodriguez v. Intuit, Inc., accusing plan fiduciaries of violating the Employee Retirement Income Security Act of 1974 (ERISA) by leveraging plan forfeitures to offset future employer contributions. This recent flurry of lawsuits is targeted at a common practice…