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After more than two years without one, three ERISA cases will come before the US Supreme Court in 2019–2020. Exciting times for ERISA attorneys, to be sure, but each case also presents issues of practical consequence for plan sponsors, fiduciaries, and participants in ERISA plans across the country.

Intel Corp. Investment Policy Committee v. Sulyma, No. 18-1116

In a case that may end up being the most impactful, the Court will address how to apply ERISA’s three-year “actual knowledge” statute of limitations. ERISA Section 413 requires that a plaintiff file suit in the six years following an alleged breach or violation. But if a plaintiff has “actual knowledge” of a breach or violation, that period shrinks to three years. In this case, Intel argued that the plaintiff’s claims were time barred because plan disclosures gave the plaintiff “actual knowledge” of all information necessary to challenge the Intel plans’ investments and fees—even though the plaintiff claimed not to have read them or remember whether he had read them. The US Court of Appeals for the Ninth Circuit held that this was enough to create a factual dispute, preventing summary judgment and requiring a trial.

After a delay in implementation gave employers an additional three months to prepare for compliance with the Massachusetts Paid Family and Medical Leave law, employer deductions will begin October 1, 2019. The Massachusetts Department of Family and Medical Leave published its final regulations on June 18, and though the framework of the draft regulations remains intact, there are several key changes employers and employees alike should be made aware of.

Our recent LawFlash summarizes the material changes in the final regulations, and includes a discussion of certain tax considerations.

Read the full LawFlash.

The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 was passed in the US House of Representatives on May 23. While the act is still pending in the Senate, it contains many provisions that would affect sponsors of large defined contribution and 401(k) plans, as well as sponsors of traditional pension plans and retirement plan service providers. Please see our LawFlash summarizing the act’s key provisions and noting the legislative hurdles that it faces.

The Internal Revenue Service (IRS) has primary jurisdiction over the qualified status of retirement plans, and this jurisdiction includes examining plans. An IRS agent can notify a plan sponsor at any time that its plan has been selected for audit. A plan sponsor should thus consider a compliance self-review to minimize the pain of audit and ensure that the plan is operating correctly, that its plan documents comport with plan operation, and that plan records are complete and organized before the IRS comes knocking. Please see our recent LawFlash detailing the top 10 issues of IRS focus in its audit of qualified plans. Also, please see our prior LawFlash addressing the top 10 areas of focus in US Department of Labor (DOL) investigations of retirement plans.

If you have questions about IRS or DOL investigations of retirement plans, please reach out to the LawFlash authors or your Morgan Lewis contacts.

Texas has passed one of the strongest new laws on drug transparency—HB 2536. To learn how this law may apply to drug manufacturers, pharmacy benefit managers, and health plans, please see our recent Health Law Scan blog post: New Texas Law Mandating Drug Price Transparency Considered Among Strongest in Nation.

Congratulations to our employee benefits and executive compensation practice for being awarded Law Firm of the Year by Chambers & Partners’ Chambers USA Awards 2019. This award recognizes our preeminence in the benefits practice area, including our outstanding work and excellence in client service. For more information, please see Morgan Lewis Wins Employee Benefits & Executive Compensation Law Firm of the Year Award from Chambers USA.

Partner Matthew Hawes was quoted in a recent Law360 article about strategies employers can use to safeguard their retirement plans against cybersecurity risks. Matt discusses how the lack of sufficient protections against cybersecurity breaches can been seen as a violation of fiduciary duty. Read the full article, 4 Tips For Handling Retirement Plans’ Cybersecurity Risks.

Congratulations to Steven P. Johnson on his election to the Morgan Lewis partnership in our employee benefits and executive compensation practice! Effective October 1, 2019, Steve, who is resident in Washington, DC, will join 29 other newly elected partners from 12 offices and nine practices. For information about all of the firm’s newly elected partners, please see Morgan Lewis Elects 30 New Partners.

Our ERISA litigation chairs, Jeremy Blumenfeld, Debbie Davidson, and Brian Ortelere, recently chatted with Law360 about how Morgan Lewis is handling some of the hottest areas in ERISA litigation, including retirement plan management for universities and the trend of workers' savings being steered toward proprietary investment funds.  Read the full Law360 article for their insight on recent cases they’ve handled and what litigation they are watching.

Taking cues from Colorado, Missouri, Pennsylvania, Iowa, New Jersey, and Virginia, all of which have recently enacted legislation supporting and encouraging the establishment of ESOPs, the states of Texas, Indiana, and Nebraska are now moving forward with their own pro-ESOP initiatives.

Nebraska Law Allows ESOPs to Own CPA Firms

Nebraska Legislative Bill 49 authorizes the ownership of CPA firms by ESOPs, with an ESOP allowed to own up to 49% of a firm. The bill unanimously passed final reading on February 28, and was signed into law on March 6. Most states already allow minority ESOP ownership of CPA firms. Creating more ESOPs in accounting firms is an important step toward making these critical financial advisors of business owners more aware of the important tax advantages and other byproducts (such as increased employee morale and increased employee productivity) that ESOPs create.