Blog Posts: Benefits Law Update
Visit the Full BlogNamed a Top 10 Blog in Compensation and Benefits, Verrill's attorneys use the Benefits Law Update blog to provide timely updates and commentary on developments in law affecting employee benefit plans and executive compensation arrangements.
Solo 401(k) Plans: A Quick Fix-It Guide
“Solo 401(k)” is a marketing term used for a 401(k) plan that is adopted by a sole proprietor or an incorporated business with no employees other than the owner. These plans offer a greater retirement savings opportunity compared to other individual accounts such as IRAs. If the business owner’s...
A Brief Guide to Qualified Disclaimers for Retirement Plan Administrators
A “qualified disclaimer” is a tax-effective way to refuse a transfer of property that would otherwise occur on someone’s death. From time to time, retirement plan administrators may be contacted by a beneficiary who wants a deceased participant’s benefit to go to a contingent beneficiary or the participant’s estate...
Why Is There No IRS Correction Program for Non-Governmental 457(b) Plans?
This post examines excess deferrals under non-governmental 457(b) plans, including the approved method for correcting them and the penalty for failing to correct them, to make the case for a change in IRS policy on correcting administrative errors in such plans. Non-governmental 457(b) plans are sometimes called “eligible deferred...
The Department of Labor Proposes Its New Fiduciary Rule
On October 31, 2023, the Department of Labor published a new proposed regulation (the “ Proposed Rule ”) defining “investment advice” for purposes of determining when someone advising an ERISA plan or participant or an IRA owner is a fiduciary. The Department’s latest proposal is designed to avoid court...
Establishing Practices and Procedures to Support Self-Correction of Operational Failures
The self-correction of retirement plan operational failures under IRS correction principles has been conditioned upon a plan sponsor’s establishment of compliance practices and procedures since the creation of the Employee Plans Compliance Resolution System (“EPCRS”) 25 years ago. This condition was articulated in IRS Revenue Procedure 98-22, which refined...
Reasonable Compensation Under ERISA: Thoughts on Two Recent Cases
Two recent court decisions bring into focus two seldom-asked questions about the reasonable compensation requirement under ERISA. When must an ERISA plan’s service provider compensation be reasonable? And why shouldn’t a plan fiduciary be able to receive reasonable compensation from the plan even if the fiduciary had a hand...
Next Steps for Making Collective Investment Trusts Available to More Retirement Plans
Collective investment trusts (“CITs”) have become an increasingly popular choice for 401(k) plan investment menus over the past decade, consistent with a trend toward lower-cost investment options that has been driven, in part, by widespread litigation. However, certain technical restrictions have kept CITs from being offered as investment options...
DOL Proposes Amendments to QPAM Exemption
On July 27, 2022, the Department of Labor (DOL) proposed a set of amendments to Prohibited Transaction Class Exemption 84-14, the so-called “QPAM Exemption,” which permits an investment fund [1] holding assets of ERISA plans and IRAs that is managed by a Qualified Professional Asset Manager (“QPAM”) to engage...
How to Shoot Yourself in the Foot with Your SPD
Benefit plan sponsors sometimes send out Summary Plan Descriptions (SPDs) having given too little thought to the legal consequences. Two recent cases illustrate how an organization can end up in serious and costly litigation based on statements that did not have to be made in SPDs that did not...
Thoughts on the DOL’s Proposed ESG Regulation
The latest installment in the regulatory back-and-forth over the investment of ERISA-governed retirement plan assets based on environmental, social, and corporate governance (“ESG”) factors arrived on October 14, 2021 in the form of a newly proposed regulation on “ Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder...
Employee Benefits & Executive Compensation 2021 Summer Client Advisory
Click here to view as a PDF. This Client Advisory summarizes developments in the law governing employee benefit plans prompted by the COVID-19 pandemic. We explain what these developments mean for plan sponsors and highlight the need to adopt plan amendments within limited time periods in order to fully...
Faculty Retirement Incentive Programs: What Does the Law Permit?
A recent survey of full-time college and university faculty found that, as of the beginning of the 2020-2021 academic year, approximately 25% of those surveyed expected to retire later than they had anticipated before the onset of the COVID-19 pandemic, and almost 40% of those aged 50-59 expected to...
Webinar: The Effect of COVID-19 on Employee Benefit Plans – Making Sense of the Abundance of New Legislation and Guidance
Join us on Thursday, March 18 for the next segment in the virtual series that comprises Verrill’s 2021 Employment Law Annual Update! For this segment, employee benefits attorneys Karen Hartford, Bill Jewett, and Chris Lockman will examine the various relief provided by legislation, regulatory action, and agency guidance intended...
Partial Plan Terminations – An Update
In our April 2020 post , we detailed how employee layoffs can cause a qualified retirement plan to undergo a “partial termination,” resulting in required 100% vesting of the affected employees’ benefits. As 2020 drew to a close, with the COVID-19 pandemic continuing to affect many businesses, Congress enacted...
Reporting Deferred Compensation on Form 990
Tax-exempt organizations often provide deferred compensation to their officers, key employees, and most highly compensated employees. Like current compensation payable to such employees, deferred compensation must be reported annually on Form 990, Schedule J. For the most part, Schedule J is straightforward. However, it is not always obvious how...
