Blogshttps://www.morganlewis.com/rss/blogsBlogs RSS Feed25https://www.morganlewis.com/blogs/mlbenebits/2024/03/dealing-with-the-dearly-departed-in-multiemployer-defined-benefit-plansDealing with the Dearly Departed in Multiemployer Defined Benefit PlansRecent headlines involving the Central States Teamsters Pension Fund and the Pension Benefit Guaranty Corporation’s (PBGC) Special Financial Assistance (SFA) Program highlights an issue with meaningful consequences for multiemployer defined benefit plans—unreported deceased participants. In fact, PBGC’s alleged overpayment of $127 million under the American Rescue Plan Act’s SFA Program covering an estimated 3,500 deceased participants sparked PBGC to implement specific death certification measures for future applicants to the SFA Program.Thu, 14 Mar 2024 00:00:00 -05004718724b-c9bf-45a3-b38d-7e64c2f63b90EBEBLBRLBRERISAERISAEBMEPEBMEPAlthea R. DayWilliam J. Marxhttps://www.morganlewis.com/blogs/mlbenebits/2024/03/revisiting-post-closing-management-incentives-in-challenging-climatesRevisiting Post-Closing Management Incentives in Challenging ClimatesWhen private equity investment transactions close, management and private equity investors are off to the races—generally aligned on strategic and financial objectives. However, as market conditions and the economic climate shift, key parties may become misaligned and management incentive plans (MIPs) could become underwater or ineffective.Fri, 08 Mar 2024 00:00:00 -0600c864c48a-fcbe-44f5-837a-3548b4852310EBEBCBTCBTMAMAESOPESOPPEPEPIFPIFAustin S. LillingNida Javaidhttps://www.morganlewis.com/blogs/mlbenebits/2024/02/withholding-on-stock-awardsWithholding on Stock Awards: Shortened Settlement Cycle to One Business Day (T+1) Effective May 28Effective May 28, 2024, following recent changes to US Securities and Exchange Commission and NASDAQ Stock Market rules, most standard broker-dealer securities transactions will have to be settled within one business day after the Deposit Withdrawal at Custodian date (DWAC or trade date). This will likely have significant federal employment tax implications for employers that compensate employees through nonqualified stock option or stock award programs since employers will have one less day to calculate the withholdings owed with respect to employees’ equity compensation and deposit those withholdings with the IRS and state tax authorities.Fri, 23 Feb 2024 00:00:00 -06008a584928-4d36-4ca0-8c00-54a55ab2ae38EBEBMary B. HevenerSteven P. JohnsonAnna M. Pomykalahttps://www.morganlewis.com/blogs/mlbenebits/2024/02/impact-on-erisa-regulation-if-supreme-court-throws-chevron-deference-overboardImpact on ERISA Regulation if Supreme Court Throws Chevron Deference OverboardThe US Supreme Court heard arguments on January 17 in Relentless v. Department of Commerce and Loper Bright Enterprises v. Raimondo . In both cases, a commercial herring fishing company challenged a regulatory requirement that the company cover the costs of an observer required to ride along on the fishing boat to confirm compliance with various regulatory requirements.Wed, 14 Feb 2024 00:00:00 -06001b71ea07-1418-46d2-9849-327332ba43ffEBEBLBRLBRERISAERISANaina G. KamathJulie K. Stapelhttps://www.morganlewis.com/blogs/mlbenebits/2024/02/managing-welfare-plan-risk-the-fiduciary-committeeManaging Welfare Plan Risk: The Fiduciary CommitteeFiduciary committees have long been established in connection with retirement plans to manage the investment, legal compliance, and operational risks that can arise under the Employee Retirement Income Security Act of 1974, as amended (ERISA). Since the enactment of the Patient Protection and Affordable Care Act (ACA) and, more recently, the Consolidated Appropriations Act, 2021 (CAA), welfare plan fiduciaries continue to take on increasing compliance responsibilities. Given the increased legal complexity of welfare plan administration, it may be time to consider establishing an administrative committee to help mitigate the various risks involved with managing a welfare plan.Mon, 12 Feb 2024 00:00:00 -060010d6475a-5132-4ce9-8d32-8a6e3986a165ERISAERISALBRLBREBEBSaghi FattahianAllison J. Fepelstein Lindsay M. GoodmanRobert M. Hunterhttps://www.morganlewis.com/blogs/mlbenebits/2024/02/reminder-california-noncompete-deadline-is-february-14Reminder: California Noncompete Deadline Is February 14Besides being Valentine’s Day, February 14, 2024 is an important day for employers with any California employees: It is the last day for employers to notify California employees (including former employees who were employed after January 1, 2022) that any unlawful noncompetes applicable to them are void. These notices need to be specific to each employee and individually addressed, and so will likely involve some investment in time and effort by employers to ensure compliance with the law.Tue, 06 Feb 2024 00:00:00 -0600fa6fc411-7276-449d-9382-39376cdc93aaEBEBLBRLBRIPIPJacqueline C. AguileraTodd A. Hentgeshttps://www.morganlewis.com/blogs/mlbenebits/2024/01/esg-investments-updates-for-2023ESG Investments Updates for 2023US state and federal laws have increasingly sought to regulate environmental, social, and governance (ESG) investing—a trend that continued in 2023. This increased regulatory focus has impacted benefit plans, including ERISA plans and, especially, public retirement plans.Mon, 22 Jan 2024 00:00:00 -0600a1ca1e26-9d04-4369-a976-7ae582b6fb24ERISAERISALBRLBRIMPGIMPGEBEBElizabeth S. Goldberghttps://www.morganlewis.com/blogs/mlbenebits/2024/01/not-done-yet-employee-benefits-plan-transition-and-integration-decisions-continue-after-ma-transactions-closeNot Done Yet—Employee Benefits Plan Transition and Integration Decisions Continue After M&A Transactions CloseThe letter of intent has been executed. The due diligence is done. The purchase agreement is signed. The money has been wired. The deal has closed. You’re done—back to business as usual! Think again . For the folks responsible for employee benefits matters, whether it be the CEO, CFO, comptroller, or human resources team, the real work after a merger or acquisition may be just beginning.Fri, 19 Jan 2024 00:00:00 -0600e4bc8f80-665b-4649-9b96-6ff79587cf70CBTCBTMAMAEBEBCarley ClarkPatrick Rehfieldhttps://www.morganlewis.com/blogs/mlbenebits/2024/01/implementing-the-new-forms-w-4p-and-w-4r-one-year-laterImplementing the New Forms W-4P and W-4R: One Year LaterEffective as of January 1, 2023, payors of qualified plan distributions have been required to use a redesigned IRS Form W-4P for payee withholding elections on periodic payments and a new Form W-4R for nonperiodic payments and eligible rollover distributions. Since then, we have fielded myriad questions on the new forms, from the basic requirements for their use and who is responsible for implementation to interpreting long-standing qualified plan withholding regulations that have not yet been fully updated to align with the new forms.Fri, 12 Jan 2024 00:00:00 -0600aed759bc-44e2-44a3-a8f8-5cc128b9c44eEBEBMatthew H. HawesAnna M. Pomykalahttps://www.morganlewis.com/blogs/mlbenebits/2023/12/publicly-traded-companies-dont-forget-to-register-plan-interests-in-deferred-compensation-plansPublicly Traded Companies: Don’t Forget to Register Plan Interests in Deferred Compensation PlansPublicly traded companies generally file registration statements on Form S-8 to register the offering of the company’s stock pursuant to the company’s equity incentive plans under the Securities Act of 1933, as amended (Securities Act). This same filing requirement applies under certain circumstances to a company’s nonqualified deferred compensation plans.Thu, 07 Dec 2023 00:00:00 -060025654897-1939-468f-b359-32bfc84eb064EBEBSamuel P. BryantDavid B. ZelikoffJustin W. Chairmanhttps://www.morganlewis.com/blogs/mlbenebits/2023/11/reminder-to-multiemployer-pension-plan-administrators-new-federal-income-tax-withholding-election-forms-are-mandatoryReminder to Multiemployer Pension Plan Administrators: New Federal Income Tax Withholding Election Forms Are MandatoryIn January 2022, the Internal Revenue Service (IRS) changed the withholding election rules applicable to distributions from pension plans (a term that includes 401(k) plans, money purchase pension plans and defined benefit pension plans). Specifically, the IRS issued a revised Form W-4P, to be used for reporting periodic payments only (such as monthly pension payments) and creating a new Form W-4R, to be used for nonperiodic payments (such as lump sum distributions and eligible rollover distributions). Use of the new forms was optional for 2022 but became mandatory as of January 1, 2023.Thu, 16 Nov 2023 00:00:00 -06004c716591-9107-4634-a5f9-a1c6f385fad6EBMEPEBMEPAlthea R. DayWilliam J. Marxhttps://www.morganlewis.com/blogs/mlbenebits/2023/11/dol-provides-guidance-on-racial-equity-plan-supplier-programDOL Provides Guidance on Racial Equity Plan Supplier ProgramThe US Department of Labor (DOL) recently issued DOL Advisory Opinion 2023-01A, (Advisory Opinion) addressing racial equity and supplier diversity. The Advisory Opinion answered an inquiry about the application of ERISA’s fiduciary duty requirements to an employer’s racial equity program.Tue, 14 Nov 2023 00:00:00 -0600360f8b7c-af9b-4f53-806d-718d15659d00ERISAERISALBRLBREBEBElizabeth S. GoldbergJulie K. Stapelhttps://www.morganlewis.com/blogs/mlbenebits/2023/11/reminder-dols-final-rule-on-prudence-and-loyalty-in-selecting-plan-investment-options-effective-dec-1Reminder: DOL’s Final Rule on Prudence and Loyalty in Selecting Plan Investment Options Effective Dec 1As discussed in a previous LawFlash , the US Department of Labor’s Final Rule on Prudence and Loyalty in Selecting Plan Investment Options, also known as the ESG Rule, contains provisions on proxy voting, which are not limited to environmental, social and governance issues. As a reminder, the ESG Rule, including the changes regarding proxy voting, will go into effect on December 1, 2023 .Thu, 09 Nov 2023 00:00:00 -0600262cd13e-f16e-4e38-8ebc-57b9d3be7a75ERISAERISALBRLBREBEBElizabeth S. GoldbergMichael B. Richmanhttps://www.morganlewis.com/blogs/mlbenebits/2023/10/department-of-labors-esg-rule-survives-challenge-in-federal-district-courtDepartment of Labor’s 'ESG' Rule Survives Challenge in Federal District CourtSince its effective date in February 2023, the Department of Labor’s (DOL’s) rule officially titled Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights, and colloquially called the “ESG rule,” has been challenged in both the courts and US Congress. In September 2023, a federal district court in one of the two court challenges ruled in favor of the DOL and its authority to adopt the ESG rule.Fri, 06 Oct 2023 00:00:00 -050045d9e03b-4125-4f18-83a4-e85ccce80e69ERISAERISALBRLBRJulie K. Stapelhttps://www.morganlewis.com/blogs/mlbenebits/2023/09/student-loan-repayments-to-resume-secure-2-0-student-loan-matching-contributions-to-the-rescueStudent Loan Repayments to Resume: SECURE 2.0 Student Loan Matching Contributions to the Rescue?With the expiration of COVID-19 pandemic relief suspending loan payments and interest accruals on federal student loans (interest accruals resumed September 1 and loan payments are set to resume in October), now is a good time for employers to take a closer look at the student loan matching contribution feature of the SECURE 2.0 Act of 2022 (SECURE 2.0).Fri, 29 Sep 2023 00:00:00 -0500b73b5a8c-1be5-40bf-a750-d9e3dd6b0d8dEBEBLBRLBREmily JordanR. Randall Trachthttps://www.morganlewis.com/blogs/mlbenebits/2023/09/first-gag-clause-attestations-due-from-group-health-plans-by-december-31First Gag Clause Attestations Due From Group Health Plans by December 31The Consolidated Appropriations Act, 2021 (CAA), requires group health plans and insurers to annually attest that they are in compliance with the gag clause prohibition under the CAA. The first attestation is due no later than December 31, 2023 and covers the period from the date of the enactment of the CAA on December 27, 2020 through the date of the attestation. Future attestations will be due each subsequent December 31 and will cover the period since the last attestation was completed.Thu, 21 Sep 2023 00:00:00 -050041169405-5640-4685-b673-bb87468e5cf0EBEBSaghi FattahianLindsay M. Goodmanhttps://www.morganlewis.com/blogs/mlbenebits/2023/08/irs-warns-of-compliance-actions-related-to-esops-and-high-income-taxpayersIRS Warns of Compliance Actions Related to ESOPs and High-Income TaxpayersThe Internal Revenue Service (IRS) recently issued IR-2023-144 (the Notice), warning stakeholders of compliance issues associated with employee stock ownership plans (ESOPs) related to the tax liability of high-income taxpayers. Although it is unclear what prompted the Notice, the IRS’s intent is clear—it has a new enforcement focus on ESOP-related tax avoidance, particularly with respect to S corporation ESOPs.Thu, 31 Aug 2023 00:00:00 -0500bcc62b32-190b-4641-a56c-7947a863c143EBEBESOPESOPTAXTAXEmily JordanEmily M. Rickardhttps://www.morganlewis.com/blogs/mlbenebits/2023/08/irs-issues-welcome-and-temporary-relief-from-rothification-of-catch-up-requirementsIRS Issues Welcome—and Temporary—Relief from Rothification of Catch-Up RequirementsTo the great relief of many plan sponsors, administrators, recordkeepers, and payroll vendors, the IRS issued highly anticipated relief regarding the mandatory "Rothification" of catch-up contributions.Fri, 25 Aug 2023 00:00:00 -0500eabaa4d6-ecc9-43a5-8563-94bdc57784b7EBEBLBRLBREBMEPEBMEPR. Randall TrachtClaire E. BouffardMatthew H. Haweshttps://www.morganlewis.com/blogs/mlbenebits/2023/08/recent-updates-regarding-the-special-financial-assistance-programRecent Updates Regarding the Special Financial Assistance ProgramRecent action taken by the Pension Benefit Guaranty Corporation (PBGC) and the US Department of Labor (DOL) will affect plans that are eligible for, or have received, special financial assistance (SFA). SFA-eligible plans should note the new guidance when applying for SFA.Fri, 11 Aug 2023 00:00:00 -050046286a52-68d3-4a0a-9391-576372dd1da7EBEBLBRLBREBMEPEBMEPMary A. PetrovicAlthea R. Dayhttps://www.morganlewis.com/blogs/mlbenebits/2023/08/insurers-new-dol-investigatory-initiative-focuses-on-evidence-of-insurability-delaysInsurers: New DOL Investigatory Initiative Focuses on Evidence of Insurability DelaysA recent news release indicates that the US Department of Labor (DOL) has an investigatory initiative focused on the issue of “insurability” under life insurance benefits. This issue arises when insurance premiums are collected for ERISA insurance benefits but there is a failure to complete the necessary process of confirming evidence of insurability. The result is that the employee believes they have insurance coverage, but coverage is not available when sought because the evidence of insurability was never completed. The DOL views such failures as a potential breach of ERISA’s fiduciary duties by either the insurer, the employer, or both.Thu, 03 Aug 2023 00:00:00 -050058d22fbc-ab61-4e75-81e2-80c73b07d41bEBEBLBRLBRERISAERISAFINSVCSFINSVCSElizabeth S. Goldberghttps://www.morganlewis.com/blogs/mlbenebits/2023/08/window-of-opportunity-available-for-reducing-2023-pbgc-premiumsWindow of Opportunity Available for Reducing 2023 PBGC PremiumsSingle-employer defined benefit pension plans that have elected to use the “alternative method” for determining Pension Benefit Guaranty Corporation (PBGC) premiums have a window to take action that may significantly reduce their PBGC premiums for 2023. Action must be taken prior to the due date for PBGC premiums for the year, which for calendar year plans is October 16, 2023.Thu, 03 Aug 2023 00:00:00 -050007ffd838-45e1-48c3-945c-e012d634fe16EBEBLBRLBREBMEPEBMEPFINSVCSFINSVCSRobert L. AbramowitzR. Randall Trachthttps://www.morganlewis.com/blogs/mlbenebits/2023/07/403b-plan-sponsors-expansion-of-irs-determination-letter-program-will-bring-form-5300-and-5310-changes403(b) Plan Sponsors: Expansion of IRS Determination Letter Program Will Bring Form 5300 and 5310 ChangesThe Internal Revenue Service (IRS) expanded its individually designed determination letter program to include 403(b) retirement plans in November 2022, before which time 403(b) plan sponsors did not have the ability to file for a determination letter, and thus could not receive assurance from the IRS that the plan’s written terms complied with Internal Revenue Code (Code) Section 403(b).Wed, 26 Jul 2023 00:00:00 -0500cd84d22b-8d15-48d2-94f7-872fba970915EBEBLBRLBRTAXTAXClaire E. BouffardR. Randall Trachthttps://www.morganlewis.com/blogs/mlbenebits/2023/07/reminder-form-w-4p-withholding-certificates-on-periodic-pension-or-annuity-payments-must-be-valid-and-up-to-dateReminder: Form W-4P Withholding Certificates on Periodic Pension or Annuity Payments Must Be Valid and Up to DateRecipients of periodic or annuity retirement plan distributions provide a Form W-4P to payors of pension or annuity payments for the correct amount of federal income tax to be withheld from these distributions. (While retirement plan administrators are primarily liable for withholding (and remittance of withholding), under Treasury Regulation § 3405-1T, Q&A 13 , this responsibility can be, and commonly is, shifted to the payor.) In response to changes to the withholding rules in the Tax Cut and Jobs Act of 2017 (TCJA), the Internal Revenue Service (IRS) updated Form W-4P in 2022 and mandated the use of the new 2023 Form W-4P as of January 1, 2023.Fri, 07 Jul 2023 00:00:00 -0500cf90c177-3535-4043-a1ad-29a3c2efcca7EBEBLBRLBRFINSVCSFINSVCSMatthew H. HawesAnna M. Pomykalahttps://www.morganlewis.com/blogs/mlbenebits/2023/06/check-out-our-upcoming-events-on-employee-benefits-and-executive-compensationCheck Out Our Upcoming Events on Employee Benefits and Executive Compensation!Join Morgan Lewis for webinars on employee benefits and executive compensation.Wed, 28 Jun 2023 00:00:00 -050043fb062a-73b5-4db4-b4fd-14afbce4b649EBEBLBRLBRIMMIMMhttps://www.morganlewis.com/blogs/mlbenebits/2023/06/transitioning-to-post-secure-20-pension-overpayment-recovery-practicesTransitioning to Post-SECURE 2.0 Pension Overpayment Recovery PracticesAs we have previously discussed , the SECURE Act 2.0 of 2022 (SECURE 2.0) changed the game for plan sponsors when considering whether and how to recover retirement plan overpayments. The new rules provide welcome relief and much-needed flexibility for many plan sponsors and fiduciaries who felt compelled to attempt to recover many types of overpayments or make the plan whole, even where such recovery or restoration did not materially impact plan funding.Wed, 21 Jun 2023 00:00:00 -0500641b94d1-bbad-466c-8b22-4e741cc5b77bEBEBLBRLBRERISAERISAFINSVCSFINSVCSDaniel R. SalemiWilliam J. Marx