In April, plan fiduciaries received further guidance from the Department of Labor (the “Department”) regarding the administration of Qualified Default Investment Alternatives (“QDIAs”) — investments made by plan fiduciaries on behalf of participants or beneficiaries in individual account plans who fail to direct the investment of assets. The Department’s Field Assistance Bulletin No. 2008–03 (“FAB”), […]

On December 13, 2007, the Department of Labor (“DOL”) issued proposed regulations under Section 408(b)(2) of the Employee Retirement Income Security Act of 1974 (“ERISA”) that would require plan service providers to provide more comprehensive written disclosure to the plan fiduciary who has authority on behalf of the plan to enter into an arrangement with […]

The Department of Labor has issued the long awaited final regulation implementing the provisions of the Pension Protection Act of 2006 (“PPA”) relating to a qualified default investment alternative (“QDIA”) in individual account plans, such as 401(k) plans. The final regulation shields fiduciaries of individual account plans from some of the liability associated with investing […]

Before enactment of the Pension Protection Act of 2006 (PPA), a dichotomy of sorts had emerged regarding the provision of investment information to participants in an ERISA-governed plan. Plan fiduciaries were fairly comfortable that offering “investment education” to participants was both commendable and relatively risk-free for the plan fiduciaries. In contrast, the provision of “investment […]

On September 27, 2006, the Department of Labor (“DOL”) issued proposed regulations implementing provisions of the recently enacted Pension Protection Act of 2006 (“PPA”) relating to default investment of plan assets in individual account plans (e.g., Internal Revenue Code section 401(k) plans). The proposed rules shield fiduciaries of individual account plans from liability for automatic […]

The recently enacted Pension Protection Act of 2006 (the “PPA”) makes some of the most sweeping revisions to employee benefits law since the enactment of ERISA. Many provisions of the PPA have delayed effective dates, and we will be reporting on various aspects of the new law in upcoming issues of Benefits Report. The PPA […]

The Voluntary Fiduciary Correction Program (“VFC Program”), issued by the Employee Benefits Security Administration of the Department of Labor, is designed to encourage self-correction of certain violations of the Employee Retirement Income Security Act of 1974. The VFC Program was permanently adopted in 2002 and revised in 2005. In April 2006 the DOL issued further […]

Amounts held under individual retirement accounts (“IRAs”) can be a substantial source of retirement income. The growth of 401(k) plans and other defined contribution plans (as opposed to traditional defined benefit pension plans) has generated additional opportunities for employees and retirees to use IRAs. A defined contribution plan may offer a lump sum form of […]

The recent decision by the Delaware Chancery Court in In Re the Walt Disney Co. Derivative Litigation, C.A. No. 15452 (August 9, 2005) has spurred much discussion regarding its implications for corporate governance. In this case, the plaintiffs, who were stockholders of the Walt Disney Company, alleged that the Members of the Disney Board of […]

Introduction When a plan fiduciary contemplates investing plan assets in any type of investment, there must always be considerations of prudence, both in the process of making the decision and in the decision to invest. For some types of investment vehicles, though, there can be additional concerns, such as the possibility of prohibited transactions or […]

On June 1, 2005, the Department of Labor (“DOL”) and the Securities and Exchange Commission (“SEC”) jointly released tips to help ERISA plan fiduciaries in selecting and monitoring “pension consultants.” These recommendations were made in response to a May 16, 2005 report issued by the SEC, which raised concerns as to whether pension consultants were […]

In November 2002, the Department of Labor (“DOL”) issued Field Assistance Bulletin 2002–3 (“FAB 2002–3”) to fill a perceived gap in guidance on float, hoping that plan fiduciaries will review their plans for compliance and take steps to protect themselves from overcompensating their service providers. FAB 2002–3 provides guidance to financial service providers and plan […]

A recent federal district court decision highlights the potential protection that can be provided against liability for breach of fiduciary duty under ERISA by the “settlor function” doctrine when plan investment decisions are incorporated into the terms of the plan document by amendment. Tatum v. R.J. Reynolds Tobacco Company On December 10, 2003, the U.S. […]