ML BeneBits

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.

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.

At the same time that the federal government, through the US Department of Labor, appears to be easing retirement plan fiduciaries’ paths to considering certain environmental, social, or governance (ESG) factors in making investment decisions, some states are passing legislation that would prohibit the states from doing business with managers who invest based on ESG criteria.

Seeking shareholder approval of an equity compensation plan has become a multi-step, often complex process. Gone are the days when management simply would discuss a share increase with the board of directors, and the company would include a brief discussion of the proposal in the proxy.

In a prior post, we discussed the first eight of 15 recommended steps to consider when submitting an equity plan for shareholder approval. In this post, we discuss the final steps. While we know each situation is different, we hope you find these 15 steps a useful guide to consider when submitting an equity plan for shareholder approval.

The Internal Revenue Service (IRS) is temporarily suspending the IRS Prototype Opinion Letter Program for individual retirement accounts and individual retirement annuities (IRAs) effective March 14, 2022. As noted in Announcement 2022-6, the IRS will not be accepting applications for opinion letters on prototype traditional, Roth, and SIMPLE IRAs or SEP (including SARSEP) and SIMPLE IRA plans until further notice.

Although variable annuity pension plan (VAPP) designs have been permissible for decades, they have not yet seen widespread adoption—particularly in the Taft-Hartley multiemployer plan space.

Recently, however, we have seen a trend of employers and unions (or existing multiemployer plan boards of trustees) agreeing to set up VAPPs as an alternative to the traditional multiemployer defined benefit plan design (hereafter, “Traditional DB Plan”).