Lawsuit Related to Use of Forfeitures Dismissed

On September 5, 2024, a federal court for the Eastern District of Virginia dismissed claims that a 401k plan participant asserted against BAE Systems regarding the use of forfeitures to reduce future employer contributions. The Court's ruling is a significant victory for defendants in the newest wave of ERISA litigation. The decision underscores that including plan terms that eliminate discretion by directing how forfeitures are to be used can mitigate litigation risk.

Source: Groom.com, September 2024

District Court Permits 403b Plan Fiduciary Breach Claims to Proceed

A federal district court in Massachusetts recently denied a motion to dismiss a complaint filed by plan participants in the Cape Cod Healthcare, Inc. 403b plan, which alleged that the plan's fiduciaries breached their ERISA duty of prudence by permitting the plan to pay excessive recordkeeping fees and remain invested in overpriced, underperforming investment options. Plaintiffs, both former employees of Cape Cod Healthcare, alleged that Cape Cod Healthcare (plan sponsor and named fiduciary) and individual fiduciary defendants breached their fiduciary duty in two ways.

Source: Erisapracticecenter.com, September 2024

ERISA at 50: No Midlife Crisis for ERISA Preemption

While ERISA is best known for regulating employer-sponsored retirement benefits, it also applies to employer-sponsored benefit plans more broadly, including employer-sponsored health plans. Significantly, ERISA effectively preempts state and local regulation of self-funded, employer-provided health benefits. The scope of this has generated some degree of debate. To better understand the value of ERISA preemption to large employers, the Employee Benefit Research Institute and American Benefits Council conducted roundtable discussions with over a dozen benefits executives at large companies. This 8-page report shares key insights from these discussions.

Source: Ebri.org, September 2024

Rollover Recommendations: PTE 2020-02 Compliance Considerations Following the DOL Fiduciary Rule Stay

The effective date of the DOL's new expansive fiduciary rule and the amendments to Prohibited Transaction Exemption 2020-02 has been stayed pending the outcome of the lawsuits challenging the rule and the amended PTE. However, broker-dealers and their registered representatives may still be fiduciaries under the current DOL fiduciary rule when recommending rollovers and may need to comply with the current version of PTE 2020-02 to receive the management fee that results from the rollover recommendation. This article describes circumstances when compliance with the PTE may be needed and the PTE conditions that apply now.

Source: Brokerdealerlawblog.com, September 2024

Six Reasons to Consider Retirement Income

People are living longer. And we're also, for the most part, not choosing to put off retirement. More years to enjoy retirement should be a good thing if we can afford them. From financial security to mental fitness, here's how guaranteed income can benefit workers as they enter that next chapter.

Source: Blackrock.com, September 2024

Read on Retirement: Advisor Perspective

Retirement. It's deeply personal. And nobody knows this better than the retirement plan advisors working first-hand with sponsors to understand and address the challenges their savers face. Blackrock surveyed over 300 advisors as part of its annual "Read on Retirement®" research to better understand how they're enhancing outcomes and growing their practice. This is a 12-page report.

Source: Blackrock.com, September 2024

"Retirement Crisis" Debunked - Facts Versus Factoids, Part II

This is the second in a two-part series on Andrew Biggs' intriguing new white paper titled "America's 'Retirement Crisis': The Emperor Has No Clothes" that debunks the various claims that the nation faces a retirement savings crisis. "What the discussion over retirement policy needs is not factoids but facts -- that is, accurate answers to relevant questions that shed light on the underlying issues being examined," Biggs writes. "There is no need to turn upside down a retirement system that by objective measures is among the most successful in the world."

Source: Asppa-net.org, September 2024

2025 401k Contribution Limits: Milliman Halves Its Increase Prediction

It's looking like retirement savers will only see a $500 increase in the amount they can contribute to their 401k, 403b, or 457 plans in 2025, according to the newly updated final forecast for the 2025 IRS contribution limits from Milliman. For 2024, the elective deferral limit was also increased by $500 compared to 2023.

Source: 401kspecialistmag.com, September 2024

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