News

"Members of the House [ H.J. Res. 143 ] and Senate [ S.J. Res. 79 ] introduced companion bills under the Congressional Review Act that would nullify the [DOL's] Retirement Security Rule.... If the bill were to pass [both the House and Senate], it is all but certain to be vetoed by President Joe Biden. The legislation has been endorsed by the Insured Retirement Institute and American Securities Association."

34 pages. "This policy paper discusses retirement inequities and how current retirement plan design elements and policies may inadvertently disadvantage certain cohorts of individuals.... [It] offers potential changes and actions for consideration by policymakers, think tanks, actuaries, and employers/plan sponsors to improve retirement outcomes for groups facing inadequate retirement security under common designs [and] concludes with considerations for further effort, research, and studies."

"Mercer CEO and President Pat Tomlinson ... focused on two legislative priorities for employers: preserving ERISA's long-standing preemption and protecting current tax incentives for employer-sponsored healthcare and retirement plans. He talked about studies that have shown that for every $1.00 of tax expenditure, multiples of that amount are paid by employers to finance health and retirement benefits. He also discussed the importance of pharmacy data transparency to employers."

"Large employer pensions looking to offload their funding liabilities through pension risk transfers are anticipating tougher future regulatory scrutiny as the [DOL] prepares a report for Congress on the $45 billion de-risking market. [EBSA's] report appears likely to propose changes to a 1995 interpretive bulletin on pension risk transfers that laid out standards for employers in selecting third-party insurers to convert plan funds into annuity contracts."

"A look back at the policy landscape that led to state-facilitated retirement plans, and a look ahead to the opportunities as these programs continue to gain steam."

"[C]ourts that allow actuarial equivalence claims are rewriting ERISA and private contracts -- something that should be left to the legislature to change.... Actuarial equivalence cases are dangerous because they present a very sympathetic fact pattern.... ERISA's safeguards were to ensure that plan sponsors meet their benefit obligations. ERISA's safeguards were never designed to allow participants to use litigation to improve their plan benefits." [ Reichert vs. Bakery, Confectionary, Tobacco Workers and Grain Millers Pension Committee , No. 23-12343 (E.D. Mich. Apr. 17, 2024); Urlaub v. Citgo Petroleum Corp. , No. 21-4133 (N.D. Ill. May 6, 2024)]

16 pages. "This issue brief proposes six policy options for Congress to consider: [1] Lowering the per-person rate of [PBGC] premiums for single- employer plans. [2] Reducing the variable rate PBGC premium. [3] Formally acknowledging risk-sharing plans in statute. [4] Permitting greater flexibility in the use of funding surpluses in DB plans. [5] Allowing pre-tax employee contributions in private- sector DB plans similar to state and local public pension plans. [6] Formally acknowledging in statute that retirement benefits should be fungible for each individual and that transfers from defined contribution (DC) plans to DB plans and conversely in the vein of Revenue Ruling 2012-4 should be allowed."

"The court ... noted that while Section 502(a)(2) claims may be asserted by an individual, they are brought in a representative capacity on behalf of the plan and seek plan-wide relief. Thus, with his Section 502(a)(2) claim, Cedeno was not simply seeking a remedy for losses in his particular account; he was seeking a remedy on behalf of the plan that would affect the accounts of others as well and perhaps lead to non-monetary equitable relief." [ Cedeno v. Sasson , No. 21-2891 (2d Cir. May 1, 2024)]

"The Federation of Americans for Consumer Choice filed a lawsuit in a Texas federal court Thursday to stop the [DOL] fiduciary proposal from taking effect.... The FACC lawsuit repeats a familiar, and successful, argument from DOL foes: that the department exceeds its authority granted by Congress and runs afoul of precedent set by the Fifth Circuit in its 2018 decision." [Federation of Americans for Consumer Choice Inc. v. DOL, No. 24-0163 (E.D. Tex. complaint filed May 2, 2024)]

25 pages. "The Administration's rationale for updating the current definition of investment advice includes the following: inadequacy of the current five-part test, gaps in the current rule, a desire for a uniform standard of advice, and expectations held by retirement investors.... The 2023 proposed rule received over 20,000 comments. Stakeholders had varying opinions, ranging from requests to withdraw the proposal to suggesting changes to endorsing the proposal." [R48045 Apr. 23, 2024]

"The DOL requested a $13.9 billion total budget for 2025, an increase from $13.6 billion in 2024. [EBSA] would receive $205.7 million under the proposed budget for the fiscal year that begins on October 1, an increase from $191.1 million, with $4.7 million set aside for implementing provisions from the SECURE 2.0 Act of 2022. The [PBGC] would receive $514.1 million in general administrative funding, up from $512.9 million."

Video of Apr. 16 hearing. Opening statement, Rep. Bob Good (R-VA); testimony from [1]  Mr. Russell DuBose , Phifer Inc.; [2]  Ms. Mairin Mancino , Peterson Center on Healthcare; [3]  Ms. Karen L. Handorf , Berger Montague; and [4]  Mr. Scott Behrens , Lockton Companies.

"A well-executed rollover can tip the balance toward financial security.... Today the 'easy' path for participants is to simply take the money -- net of taxes and penalties -- and run. But that puts millions of participants and their retirements at risk. The challenge for the industry today is to develop secure, prudent pathways that make it easy for participants to do what's best for their long-term retirement security -- and the nation's."

"SECURE 2.0 and its predecessor bills have expanded the system well beyond its goal of helping the middle class. Today, wealthy taxpayers can protect up to $452,500 per year in tax-advantaged accounts in a single year, saving up to $203,600 on their taxes.... [T]op retirement industry lobbying groups have increased their PAC spending to lawmakers between six to eight times since the early 2000s, with the PACs and executives of member companies of one industry juggernaut providing $98.6 million to lawmakers in the 2022 election cycle leading up to SECURE 2.0."

"The Fourth Circuit's decision in Rose is significant. The opinion contains one of the most detailed analyses of the types of relief that were typically available in equity courts of any circuit or district court decision since Mertens . It is certainly the most detailed analysis since Montanile .... Ultimately, Rose provides a strong basis for pushing back on claims for monetary relief that do not include situations where there is an identifiable fund. " [ Rose v. PSA Airlines, Inc. , No. 21-2207 (4th Cir. Sep. 11, 2023; cert. pet. denied Apr. 15, 2024)]

Video of April 11 hearing. Opening statement by Chair Kevin Kiley (R-CA); testimony from [1]  Ms. Kristin Sharp , Flex Association; [2]  Ms. Gabriella Hoffman , Independent Women"s Forum Center for Economic Opportunity; [3]  Dr. Katie Wells , Georgetown University; and [4]  Dr. Liya Palagashvili , Mercatus Center at George Mason University.

"Labor economist ... Kathryn Anne Edwards ... argued that 401(k) plans alone are failing to solve the retirement crisis in America and that the federal government needs to take a more active role in provide access to retirement savings.... Edwards argued the government should stop subsidizing 401(k) accounts (by making contributions tax-deductible), because she says it uses about 1% of the country's GDP (in potential, unrealized taxes) to benefit the retirement savings of the wealthiest 25% of Americans. "

"[T]he 221st open meeting of the [ERISA Advisory Council] will be held on Tuesday, May 14, 2024.... The meeting will take place at the [DOL offices in Washington DC]. The meeting will also be accessible via teleconference and some participants, as well as members of the public, may elect to attend virtually.  ... The purpose of the open meeting is to set the topics to be addressed by the Council in 2024. Also, the ERISA Advisory Council members will receive an update from leadership of the Employee Benefits Security Administration (EBSA)."

29 pages. "The 2022 Rule is consistent with ERISA. It makes clear that ERISA's fiduciary obligations of prudence and loyalty apply to all investment decisions and that fiduciaries must always invest plan funds to maximize risk-adjusted returns. The 2022 Rule is neutral. It neither favors nor disfavors any particular factors and does not identify any factors that fiduciaries should or should not consider when making investment decisions to best serve a plan.... The 2022 Rule also fits comfortably alongside regulations and sub-regulatory guidance issued by the Department since the late 1970s." [ Utah v. Su , No. 23-0016 (N.D. Tex. Sep. 21, 2023;  on appeal  to 5th Cir. No. 23-11097)]

"Many stakeholders securing OMB meetings in the coming two weeks have previously expressed opposition to the rule and have called for it to be withdrawn in its entirety. Others have expressed support for the rule and are urging it to be finalized.... According to the  OMB website , 14 different meetings with stakeholders are on the docket."

"Here are four reasons he might be wrong about raising the retirement age .... [1] Many seniors would see lower benefits.... [2] It would especially hurt those who need social security the most.... [3] Many older workers face ageism.... [4] Most Americans don't have enough retirement savings."

"The billionaire investment advisor warned that the country is headed for a 'retirement crisis,' and that one way to avoid it is to convince more people to delay retirement beyond 65 years old.... [1] Longer lifespans mean longer retirements for many Americans.... [2] Social Security is heading into uncharted territory.... [3] Employer-sponsored retirement plans will grow."

"As a society, we focus a tremendous amount of energy on helping people live longer lives. But not even a fraction of that effort is spent helping people afford those extra years.... [Y]ounger generations, Millennials and Gen Z ... believe my generation -- the Baby Boomers -- have focused on their own financial well-being to the detriment of who comes next. And in the case of retirement, they're right.... [T]he retirement message that the government and companies tell their workers is effectively: 'You're on your own.' And before my generation fully disappears from positions of corporate and political leadership, we have an obligation to change that."

" 'The lower courts are splintered on what service transactions between plans and providers are prohibited…unless exempt' under ERISA, said the March 13 petition ... The petitioners ... want the Supreme Court to address this 'circuit split' by establishing a uniform standard. Eight of 12 federal appeals courts have differing views on prohibited transactions and parties-in-interest, the lawsuit said." [ D.L. Markham DDS, MSD, Inc. 401(K) Plan v. Variable Annuity Life Ins. Co. , No. 22-20540 (5th Cir. Dec. 14, 2023; cert. pet. filed Mar. 18, 2024)]

"How [to] handle the novel types of relief requested in the complaints, especially in light of the fact that no participant has yet to suffer an unpaid pension benefit, may well be important issues that the courts will want to address. As the cases move through the courts, the [DOL] will presumably continue its consideration of changes to IB 95-1 as directed by Congress in SECURE 2.0.... Further, beyond its impact on any pending litigation, the [DOL's] future report to Congress as required by SECURE 2.0 may well impact future PRTs."