Plans, Perks & Pay | Employee Benefits & Executive Compensation Blog

In an unpublished opinion, the U.S. Court of Appeals for the Fourth Circuit found a lower court did not err when awarding no relief for a breach of fiduciary duty. (Pender v. Bank of America Corp., No. 17-1485, June 5, 2018.) Although Bank of America violated the Employee Retirement Income Security Act of 1974 (ERISA), the court found that it did not profit from its actions and, therefore, awarding damages would not be appropriate equitable relief.

Northwestern University recently defeated a lawsuit alleging that it violated the Employee Retirement Income Security Act (ERISA) while managing its retirement plans. The plaintiffs brought ERISA breach of fiduciary duty and prohibited transaction claims, alleging the university’s retirement plans featured imprudent investments and paid excessive fees. On May 25, 2018, the U.S. District Court for the Northern District of Illinois dismissed the lawsuit in its entirety and denied the plaintiffs’ motion to amend to add additional counts, finding them futile.

On January 22, 2018, the U.S. Supreme Court requested the Solicitor General’s opinion on whether a plaintiff can simultaneously bring a claim for benefits and a claim for breach of fiduciary duty under the Employee Retirement Income Security Act of 1974 (ERISA). A request for the view of the Solicitor Generally typically indicates the court’s interest in hearing a case.

The U.S. Supreme Court recently declined to address the issue of whether forum selection clauses are valid and enforceable in plans governed by the Employee Retirement Income Security Act of 1974 (ERISA). Three U.S. Courts of Appeals have allowed enforcement of plans’ forum selection clauses.

The U.S. Court of Appeals for the Seventh Circuit joined the Sixth Circuit in holding that forum selection clauses in plan documents are valid and enforceable under the Employee Retirement Income Security Act of 1974 (ERISA).

Recent Supreme Court decisions permitting class action waivers in arbitration agreements opened the door to the question of whether such an agreement would be enforceable under the Employee Retirement Income Security Act of 1974 (ERISA). (See American Express Co. v. Italian Colors Restaurant and AT&T Mobility LLC v. Concepcion.) The wave of class action litigation over 401(k) and 403(b) fees has created a forum for addressing this question, and courts are beginning to provide an answer.

Thanks to the 21st Century Cures Act, beginning Jan. 1, 2017, some employers can now offer employees a new type of health reimbursement arrangement, called a Qualified Small Employer HRA. Primarily governed by 26 U.S.C. § 9831(d), these HRAs are designed to help subsidize employees’ purchase of health coverage on the exchange, although they can also be used to help pay for other medical expenses.

The following questions and answers explain how these new HRAs work.

The U.S. Supreme Court on Jan. 17 ended a yearlong legal challenge to the enforceability of a forum selection clause in an ERISA-governed benefit plan, when the court denied the plaintiff’s petition for writ of certiorari. The case is Clause v. U.S. District Court for the Eastern District of Missouri, 2017 U.S. Dist. LEXIS 719 (Jan. 17, 2017).

In an earlier post, I discussed the spread of 401(k) litigation and the fact that smaller plans were becoming targets for aggressive litigators. As the pool of large plans diminishes and the litigation theories become well-known, it is inevitable that the volume of 401(k) litigation will expand. Fortunately, most plan sponsors can avoid 401(k) litigation by taking a few obvious steps. Here are some suggestions.

UPDATE (Sept. 29, 2016):
On Sept. 23, 2016, the Department of Labor announced that the deadline for submitting comments would be extended by more than two months, to Dec. 5, 2016.

ORIGINAL POST:
The Department of Labor (DOL) — jointly with the IRS and the Pension Benefit Guaranty Corporation — has proposed major revisions to the Annual Returns/Reports under the Employee Retirement Income Security Act of 1974 (ERISA), more commonly known as Form 5500s. The proposed revisions will require plan sponsors to provide more information, some of which may open the door to litigation risks.