"Since the intention of the new rules was not to eliminate audits for all first year plans, the 2023 Form 5500 instructions indicate that for plans that check Form 5500, Part 1, Line B to indicate that the plan is 'the first return/report,' then a plan will use the end of year participant account balances to determine the filing status of the plan for the plan year."   MORE >>

"When pure robo advice (no human directly involved) or hybrid robo advice is given, if it satisfies the regulatory definition of fiduciary advice, the financial institution will be a fiduciary under ERISA (if to an ERISA plan or a participant in such a plan) and subject to ERISA's duties of prudence and loyalty. If robo advice generates a fiduciary recommendation that is conflicted, the conflicted amount (e.g., commissions, management fees) will be a prohibited transaction under ERISA and the Code, which would necessitate compliance with the conditions of a prohibited transaction exemption (PTE)."   MORE >>

" Thole could pose a big problem for the plaintiffs ... because they'll have to show a material risk that they will lose all or part of their benefits.... That would require showing that the annuity provider is likely to default, and that the relevant state insurance guaranty associations charged with protecting policyholders wouldn't be able to step in and address the situation[.]" [Piercy v. AT&T Inc., No. 24-10608 (D. Mass. complaint filed Mar. 11, 2024); Konya et al. v. Lockheed Martin Corp., No. 24-0750 (D. Md. complaint filed Mar. 13, 2024)] MORE >>

"The law firm that seems ready to make pension risk transfers its next big focus of class actions -- Schlichter Bogard -- last week posted an ad ... seeking Alcoa retirees and pension beneficiaries to join a case that so far has not been filed. Schlichter Bogard is behind the lawsuit against Lockheed as well as one of the two cases against AT&T."   MORE >>

"Factors that affect whether small firms offer a plan include firm size, wages, and industry, as well as beliefs on whether it will help attract workers. The main barriers to offering a plan are concerns about the stability/size of the firm and the perceived costs of a plan. Concerns about costs are driven by misperceptions; many firms are unaware of lower-cost options for employers and tax credits. The results also suggest that state auto-IRA programs are more likely to encourage than discourage firms from offering their own plan."   MORE >>

"Defined Contribution Groups -- DCGs -- offer another option for sponsors seeking to simplify some administrative tasks.... Plan sponsors that are members of a DCG are still sponsors of a single-employer plan, but the DCG sponsor, known as a direct-filing entity, files a consolidated Form 5500, called Form 5500-DCG, on behalf of all members of the group."   MORE >>

"While no two state plans are exactly the same, it's instructive to see what retiring teachers in California can expect from their defined benefit plan. Keep in mind that California is one of about a dozen states where teachers don't pay into Social Security."   MORE >>

"Under a NGRIP the retiree assumes the investment risk associated with their retirement account balance as well as the risk of living longer than their account balance will last (longevity risk). Though benefits are not guaranteed, many retirees may prefer a NGRIP over a guaranteed income option for reasons that include, but are not limited to, flexibility and lower costs."   MORE >>

"The plaintiffs (and the [DOL]) ... [argue] that the defendants should have been required to prove that a prudent fiduciary 'would have' (not 'could have') made the exact same decisions. But that standard finds no foothold in ERISA. Assuming a burden-shifting framework for loss-causation, the standard applied by the district court is sensible: if the decisions could have been reached through a prudent process, then the defendants' lack of a prudent process was a harmless error, rather than the cause of any loss." [ Vellali v. Yale Univ. , No. 16-1345 (D. Conn. Jun. 28, 2023; on appeal to 2d Cir. No. 23-1082)]   MORE >>

"The [IRS announced] tax relief for individuals and businesses in the Wrangell Cooperative Association of Alaska Tribal Nation that were affected by severe storms, landslides and mudslides that began on Nov. 20, 2023. These taxpayers now have until July 15, 2024, to file various federal individual and business tax returns and make tax payments."   MORE >>

Chart lists and describes penalties applicable to retirement and health plans.   MORE >>

"[B]ecause reformation is a form of equitable relief, courts have sustained claims for equitable relief under ERISA Section 502(a)(3).... [In] the absence of fraud or inequitable conduct, a unilateral mistake will generally not justify the equitable reformation of a contract ... In the context of ERISA plans, mistake is measured by comparing the actual terms of the plan to the baseline of the beneficiaries' objective, reasonable expectations about the scope of benefits provided."   MORE >>