On November 1, 2024, the IRS issued Notice 2024-80, which provides certain cost-of-living adjustments for a wide variety of tax-related items, including retirement plan contribution maximums and other limitations, effective January 1, 2025. Several key figures are highlighted below. 

Recently, the IRS issued an Issue Snapshot addressing participant consequences when excess 401(k) deferrals are made. Elective deferrals include both pre-tax salary reduction contributions and any designated after-tax Roth contributions. 

On October 1, 2024, the IRS announced disaster tax relief for all individuals and businesses affected by Hurricane Helene, including the entire states of Alabama, Georgia, North Carolina, and South Carolina and parts of Florida, Tennessee, and Virginia.

On August 20, 2024, the Sixth Circuit ruled in Parker v. Tenneco, Inc., that 401(k) plan provisions mandating individual arbitration are invalid as a prospective waiver of rights and remedies guaranteed under ERISA.

On December 7, 2024, the DOL issued Compliance Assistance Release No. 2024-01, which provides updated cybersecurity guidance for employee benefit plans. The DOL also clarified that the cybersecurity guidance applies to all employee benefit plans, including retirement plans and health and welfare plans. In recent years, the DOL has increasingly focused on cybersecurity measures for ERISA plans. Release No. 2024-01 enhances the DOL’s 2021 cybersecurity guidance and is intended to help plan sponsors, fiduciaries, service providers, and participants...

On August 19, 2024, the IRS released Notice 2024-63, which provides interim guidance pursuant to the SECURE 2.0 Act for employers that want to provide matching contributions based on eligible student loan payments made by participating employees. In brief, among many other changes to retirement plan rules, SECURE 2.0 permits employers to amend their 401(k), 403(b), 457(b), and SIMPLE IRA plans to make matching contributions with respect to qualified student loan payments (QSLPs) for plan years beginning after December 31, 2023.

On July 24, 2024, in Kruchten v. Ricoh USA, Inc., et al., the US Court of Appeals for the Third Circuit (Third Circuit) reversed the dismissal of an ERISA excessive fee claim by the US District Court for the Eastern District of Pennsylvania (district court). During the appeal process, the Third Circuit reversed the opinion of the case on which the district court relied (Mator v. Wesco Distrib. Inc.) and clarified the pleading standards for excessive fee claims under ERISA, rejecting the narrow, more stringent standard suggested by the district court. As a result, the Third Circuit reversed the motion to...

On July 18, 2024, the US Court of Appeals for the Fifth Circuit (Fifth Circuit) vacated a trial court’s determination that DOL’s final rule enabling retirement plan fiduciaries to consider the potential financial benefits of investing in funds that take environmental, social and corporate governance (ESG) factors into account was not “manifestly contrary” to ERISA.

On July 18, 2024, the IRS released final regulations updating the required minimum distribution (RMD) rules for retirement plans. The final regulations, which reflect certain changes made by the SECURE Act and the SECURE 2.0 Act, largely follow proposed regulations issued in 2022 (the 2022 proposed regulations). Simultaneously, the IRS issued new proposed regulations (the 2024 proposed regulations), addressing additional RMD issues under the SECURE 2.0 Act (SECURE 2.0).

On June 20, 2024, the IRS issued Notice 2024-55, which provides guidance on two exceptions to the 10% tax under Code section 72(t)(2) on early retirement plan distributions that were included in the SECURE 2.0 Act. The two exceptions are for emergency personal expense distributions and domestic abuse victim distributions.