On June 24, 2024, the DOL released a report to Congress regarding Interpretive Bulletin 95-1 (the bulletin), which addresses ERISA fiduciary obligations of defined benefit (pension) plan sponsors when they select an annuity provider. The report was issued pursuant to Section 321 of the SECURE 2.0 Act, which directed the DOL to determine whether the bulletin’s guidance required amendment and to assess any risks to plan participants associated with... 

On May 23, 2024, in Moore et al v. Humana Inc. et al., the US District Court for the Western District of Kentucky (the court) granted summary judgment in favor of defendants Humana Inc. and the Humana Retirement Plans Committee (the defendants) in their roles as plan sponsor and fiduciary of the Humana Retirement Savings Plan (the plan). The class action case, filed in 2021, alleged a breach of the ERISA fiduciary duty of prudence in administering the plan due to excessive recordkeeping fees. The plaintiffs also claimed Humana failed to adequately monitor other fiduciaries.  

On May 1, 2024, the Second Circuit declared provisions of an employee stock ownership plan (the Plan) that required participants to resolve any legal claims arising out of or relating to the Plan in individualized arbitration “null and void” because they amounted to prospective waivers of participants’ substantive statutory rights and remedies under ERISA. The plaintiff, Ramon Cedeno, was an employee of Strategic Financial Solutions, LLC, and a participant in its Plan. Because the Plan had incurred substantial losses after its trustee, Argent Trust Company, purchased shares of Strategic Family...

On May 19, 2024, the IRS issued FAQs regarding special rules for distributions from retirement plans, IRAs, and retirement plan loans for certain individuals impacted by federally declared major disasters. The SECURE 2.0 Act provided the framework for ongoing disaster relief for these distributions for affected individuals, and the FAQs are intended to provide information on disaster relief options that may be available. It is important to note that the FAQs are only intended to provide general guidance and cannot be relied upon by the IRS to resolve a case.

On May 17, 2024, the DOL published an interim final rule amending their Abandoned Plan Program regulations, which provide procedures for the termination of individual account retirement plans (such as 401(k) plans) that have been abandoned by their sponsoring employers. Among other items, the 2024 interim final rule makes the Abandoned Plan Program available to Chapter 7 bankruptcy trustees who administer a bankrupt company’s retirement plan.

On April 23, 2024, the DOL released the final Retirement Security Rule (the 2024 final rule) defining who is an investment advice fiduciary for purposes of ERISA and the Code. The DOL also issued final amendments to class prohibited transaction exemptions (PTEs) available to investment advice fiduciaries. The 2024 final rule follows and largely resembles a proposed rule issued on November 7, 2023. Please see our November 9, 2023, edition of Compliance Corner regarding the proposed rule.

On April 16, 2024, the DOL issued a request for public comment on its proposal to create a database to allow individuals to locate former retirement plan information. This searchable database would help implement the requirement under the SECURE 2.0 Act to more easily allow individuals to obtain plan administrator contact information.

The IRS recently issued Notice 2024-35, which updates and extends the transition relief provided in Notice 2023-54, which addressed changes made by the SECURE Act and the SECURE 2.0 Act in required minimum distribution (RMD) requirements for qualified plans such as 401(k) plans, IRAs, Roth IRAs, 403(b) plans, and 457(d) eligible deferred compensation plans. For further information on prior Notice 2023-54, please see our August 3, 2023, Compliance Corner.)

On April 2, 2024, the DOL announced that it amended a rule that provides an exemption for qualified professional asset managers (QPAMs). A QPAM is defined as a bank, savings and loan association, insurance company, or registered investment adviser that assists retirement plans in making financial investments. QPAMS are particularly useful in that they can facilitate transactions that would otherwise not be allowed under ERISA, through the exemption granted by the DOL. The amendment clarifies language in the original rule, including what misconduct can render a QPAM ineligible...

On February 28, 2024, Chairperson Bernard Sanders (I-VT) and the majority staff of the Senate Health, Education, Labor, and Pensions (HELP) Committee released its report “A Secure Retirement for All” in coordination with that day’s full committee hearing on the potential for the expansion of defined benefit pension plans.