ML BeneBits

EXAMINING A RANGE OF EMPLOYEE BENEFITS
AND EXECUTIVE COMPENSATION ISSUES
Join us on Wednesday, December 14, for our final webinar of 2023 where we’ll discuss the hottest topics in employee benefits, including takeaways from the Department of Labor’s final ESG rule, the status of the SECURE Act 2.0, and more!
The US Department of Labor (DOL) released the Final ESG Rule on November 22, 2022, regulating the consideration of environmental, social, and governance (ESG) factors by fiduciaries of employee benefit plans subject to the Employee Retirement Income Security Act of 1974, as amended (ERISA). The Final ESG Rule, “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights,” also addresses proxy voting.
The Affordable Care Act (ACA) requires non-grandfathered group health plans (and insurers) to provide coverage for certain preventive health services for all adults, women, and children. Preventive services covered under the law must be provided to individuals without cost sharing, i.e., without the requirement to pay a copayment, coinsurance, deductible, or other cost.
In response to confusion regarding the “10-Year Rule” that was added to the required minimum distribution (RMD) rules by the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), the US Internal Revenue Service (IRS) has provided relief to defined contribution plan beneficiaries and individual retirement account beneficiaries. In Notice 2022-53, the IRS provides two forms of relief: (1) the proposed RMD regulations, including the application of the 10-Year Rule, if finalized, will not apply earlier than 2023, and (2) the failure to distribute “Specified RMD” payments in 2021 and 2022 will not be treated as a plan qualification failure or trigger the 50% excise tax for the Specified RMDs.

Welcome Austin Lilling!

October 17, 2022
We are excited to welcome Austin Lilling to Morgan Lewis’s employee benefits and executive compensation practice, as partner in our New York office.

Anti-ESG state legislation continues to focus on public retirement plan investing and asset management. Over the last year, 18 states have proposed or adopted state legislation or regulation limiting the ability of the state government, including public retirement plans, to do business with entities that are identified as “boycotting” certain industries based on environmental, social, and governance (ESG) criteria. Since our last update, four states have either adopted or proposed legislation or other forms of regulation that would restrict ESG activities using state assets.

As described in our prior blog post, the US Internal Revenue Service (IRS) recently extended many impending amendment deadlines for legislative changes made by the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), Bipartisan American Miners Act of 2019 (MINERS Act), and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). However, for reasons that were not entirely clear, the IRS did not extend the amendment deadline for certain CARES Act changes at the time. Now, in Notice 2022-45, the IRS is extending the amendment deadline for the remaining CARES Act changes.
A group of state treasurers and state attorneys general (AG) have raised concerns that certain environmental, social, and governance (ESG) features of certain fund disclosures and other marketing collateral could create liability under state Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) and Anti-Boycott, Divestment, and Sanctions (Anti-BDS) laws. This is an issue that could impact government retirement plans and/or asset managers to public and private retirement plans.
The City of Philadelphia has enacted an ordinance requiring commuter benefits for employees, effective December 31, 2022 (the Ordinance). The Ordinance applies to employers who employ 50 or more “covered employees” in Philadelphia (excluding government employers). A covered employee for purposes of the Ordinance is any person working an average of 30 hours or more per week in Philadelphia for the same employer within the past 12 months.
This post serves as an update to our prior blog post analyzing the impact of this anti-ESG state legislation on public retirement plan investing.