Advisory: Department of Labor Proposes New Regulation Governing When Financial Advisors Are Subject to Fiduciary Requirements

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The Department of Labor (DOL) has now proposed long-anticipated changes to the regulation that delineates when financial advisors become fiduciaries to certain benefit plans (such as retirement plans and Health Savings Accounts). This is an important distinction because fiduciary status imposes a number of requirements and implicates certain prohibited transaction rules (particularly concerning the receipt of fees). Under ERISA, a person can become a fiduciary in three general ways: (1) they can be designated as such in the plan documents; (2) they can be a “functional fiduciary” in the [...] Read more

Recent Developments in Employee Benefits Law

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This article, which was recently published in the ABA Tort, Trial & Insurance Practice Law Journal, surveys recent developments in employee benefits law from Fall 2013 through Fall 2014.  The first portion of the survey reviews two important Supreme Court cases from last term, Fifth Third Bancorp v. Dudenhoeffer and Heimeshoff v. Hartford Life & Accident Insurance Co.  The second portion of the survey reviews eight important decisions issued by the appellate courts during the last year.  The final portion of the survey reviews a proposed rule from the Department of Labor that would [...] Read more

Pat DiCarlo and Emily Hootkins Published in Law360 – “6th Circ. Rejection Of Disgorgement Brings ERISA Relief”

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On rehearing en banc, the Sixth Circuit has restored order for individual benefits cases by rejecting a judgment ordering Life Insurance Co. of North America to disgorge nearly $3.8 million in profits after wrongfully withholding long-term disability benefits from a plan participant. The majority agreed that allowing a disgorgement award in addition to requiring the insurer to pay the individual disability benefits would be an “impermissible duplicative recovery” under ERISA. To read the full article, please click here. [...] Read more

Hinson and Costin Published in Law360 – Determining ERISA Duties Post-Dudenhoeffer

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It is hard to imagine how a new, separate, distinct duty to disclose inside information about public companies under the Employee Retirement Income Security Act, along with the specter of ERISA fiduciaries becoming a new source of “material” information about public companies, would not cause more harm than good, say H. Douglas Hinson and Emily Costin of Alston & Bird LLP, in an article published on Law360.

To read the full article, please click here.

Advisory – M&G Polymers v. Tackett: New Standards for Vesting of Retiree Medical Benefits in Collective Bargaining Agreements

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Alston & Bird issued an advisory that discusses the Supreme Court’s recent decision in M&G Polymers v. Tackett, which addressed whether collectively bargained retiree medical benefits were vested for life.   Prior to M&G Polymers, federal circuits were split over how to interpret collective bargaining agreements (CBAs) regarding whether retiree medical benefits are vested after the expiration of the CBA.  In a unanimous ruling (with a concurrence by Justice Ginsburg, joined by 3 other Justices), the Supreme Court overturned the Sixth Circuit’s Yard-Man presumption that such [...] Read more

Advisory – ERISA Fiduciary Decisions: Making Changes to Your Qualified Plan’s Investment Lineup

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Following recent financial news regarding changes at the PIMCO Total Return Fund, Alston & Bird’s Employee Benefits & Executive Compensation Group summarizes the technical requirements and recommended procedures in making changes to your retirement plan’s investment lineup. From time to time, fiduciary committees need to consider whether to make a change in the investment alternatives available in their retirement plans. Typically in 401(k) and 403(b) plans and sometimes in other defined contribution plans, the fiduciary committee selects the investment options or funds available [...] Read more

Third Circuit Serves Up Big Win for Retirement Plan Service Providers

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The U.S. Court of Appeals for the Third Circuit recently issued an important decision in one of the many cases alleging that financial services companies breached fiduciary duties under ERISA by charging allegedly excessive fees. This type of litigation has grown more prevalent in recent years. However, most appellate courts, including now the Third Circuit, have found these claims unmeritorious. In Santomenno v. John Hancock Life Insurance Company, No. 13–3467, 2014 WL 4783665 (3d Cir. Sept. 26, 2014), the plaintiffs argued that, as a service provider to their 401(k) plan, John Hancock had [...] Read more

Pat DiCarlo Quoted By PLANSPONSOR Regarding Growing Number of Pension Benefits Claims

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On September 4, 2014, Pat DiCarlo was quoted in an article in PLANSPONSOR, in which he discussed the growing number of claims for pension benefits that were paid or rolled over decades ago by former employees who either do not recall receiving or rolling over their benefits or who are questioning the amount of benefits they received.

To read the article, entitled “Decades-Old DB Benefit Payments Being Questioned,” click here.

Blake MacKay and Emily Hootkins Published in Law360 – “Costs To Pension Withdrawal Liability May Change”

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In the first published decision of its kind, the United States District Court for the District of New Jersey recently determined that that contribution surcharges imposed when a multiemployer pension fund enters critical status should not be counted in calculating an employer’s withdrawal liability. Bd. of Trustees of IBT Local 863 Pension Fund v. C&S Wholesale Grocers Inc./Woodbridge Logistics LLC, — F. Supp. 2d —, No. 12-7823, 2014 WL 1687141 (D.N.J. Mar. 19, 2014). The case is a departure from how many funds calculate withdrawal liability, and it opens the doorway for new challenges [...] Read more

Advisory – Notice to Late Filers of Form 5500 Regarding Relief from Penalties under the Internal Revenue Code and Reminder About Fee Disclosures

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This advisory addresses an important update regarding additional steps that plan administrators must take, in order to avoid penalties under the Internal Revenue Code, if they failed to timely file the Form 5500 series of annual reports. This advisory also includes a critical reminder concerning the timing of fee disclosures regarding qualified retirement plans. To read the full text of the advisory, please click here. [...] Read more