ML BeneBits

We invite ML BeneBits readers to join us for the following programs on employee benefits and executive compensation.

While the Department of Labor’s environmental, social, and governance rule garnered a lot of attention in 2022, there are two other developments simmering that could have significant implications for ERISA plans and financial services providers to ERISA plans as we move into 2023. These are proposed changes to (1) the rules on how to obtain a prohibited transaction exemption from the Department of Labor (DOL) and (2) the rules for qualified professional asset managers (QPAMs).

As 2022 comes to a close, we're resharing our top five most-read blog posts of the year. Thank you for your engagement, and we look forward to providing you with more content in 2023!

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.

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.