The ERISA Industry Committee

ERIC Submits Amicus Brief in Tibble v. Edison International

noreply@blogger.com (The ERISA Industry Committee) — Mon, 26 Jan 2015 17:07:00 +0000

The ERISA Industry Committee on Friday filed with the U.S. Supreme Court an amicus brief in the Tibble v. Edison International case.

The brief was prepared by Gibson, Dunn & Crutcher LLP. Along with ERIC, the National Association of Manufacturers, the U.S. Chamber of Commerce, the American Benefits Council, and the Business Roundtable participated on the brief.

The brief urges the Court to uphold earlier court rulings concerning the Employee Retirement Income Security Act’s (ERISA) six-year statute of limitations provision, and reject a challenge concerning the prudence of three investment options that were selected for inclusion in a plan sponsor’s 401(k) plan more than six years prior to the alleged fiduciary breach claims.

This could potentially be a landmark case regarding the application of the statute of limitations to fiduciary breach cases. Oral arguments are scheduled for February 24, 2015. A decision on the case is not expected until late spring or early summer.

To read ERIC's press release on the brief, click here.

Annette Guarisco Fildes Appointed New CEO of The ERISA Industry Committee

noreply@blogger.com (The ERISA Industry Committee) — Mon, 12 Jan 2015 20:17:00 +0000

ERIC's Board of Directors earlier today announced the appointment of Annette Guarisco Fildes as the new CEO. Annette succeeds interim CEO, Scott Macey.

“I’m honored to join the ERIC team and build on their success,” said Fildes. “The role of employer-provided benefits continues to be critical to this country. It’s a wonderful opportunity to be part of this exciting future and to work with the prestigious companies that are ERIC members and the talented ERIC staff,” she added.

Annette is an experienced thought leader in strategic public policy for global corporations. She has over 30 years of experience in government affairs and private law practice with major corporations focusing primarily on tax issues and employer-provided benefits. Recently, Annette was the Executive Vice President, Public Affairs for the Retail Industry Leaders Association (RILA), focusing on government relations, political advocacy and communications for this trade association. Prior to that, Annette held senior executive positions within the Public Policy and Government Affairs groups for General Motors and Honeywell, where she led government relations efforts on public policies including tax, health care, labor, pensions and other matters. Annette has advised members of Congress, including Senate Majority Leaders Bob Dole and Trent Lott, as well as Administration officials. She has also represented Fortune 100 corporations directly before the U. S. Congress and the Executive Branch.

She is the author of the Employer’s Guide to Fringe Benefits, with Mary B. Hevener, Esq., and numerous articles in the Journal of the American Bar Association, the Journal of Taxation of Employee Benefits and other publications.

“We are very pleased to have Annette join as CEO. Annette’s strategic vision and thought leadership, her deep knowledge of Washington, DC, and proven record of making a difference for employer-sponsored benefit programs made her the unanimous choice of the board,” said Jeanne Denz, Chairman, The ERISA Industry Committee Board of Directors. “She enhances an already excellent team and will further strengthen The ERISA Industry Committee’s role as the leading voice representing the employee benefits interests of America's largest employers.”

Annette holds an LL.M in Taxation from Georgetown University Law Center, a J.D. from Hofstra University School of Law, and a B.B.A. in Finance from Hofstra University. She currently resides in the Washington, DC area.

To read the full release, click here.

ERIC Testifies at Treasury / IRS Hearing on Proposed Transition Rules on Hybrid Plans

noreply@blogger.com (The ERISA Industry Committee) — Fri, 09 Jan 2015 21:32:00 +0000

Today, the Treasury Department and Internal Revenue Service (“IRS”) held a hearing on the proposed regulations relating to hybrid plans. ERIC, represented by Richard Shea and Robert Newman of Covington & Burling, testified at the hearing.

The government panel included Treasury Department officials including, Harlan Weller (Chief Actuary) and Bill Evans (Attorney – Office of Policy). IRS officials from the Tax Exempt and Government Entities Division included Victoria Judson (Associate Chief Counsel), who ran the hearing, Linda Marshall (Senior Counsel), Laura Warshawsky (Manager), David Ziegler (Supervisory Actuary), and Neil Sandhu (Attorney). The government panel did not testify at the hearing, but listened to the testimony of the witnesses and asked various questions of the witnesses. Four individuals testified at the hearing.

ERIC members can view a complete summary of the hearing by visiting ERIC's webpage here.

Agencies Issue Proposed Guidance on Excepted Benefits

noreply@blogger.com (The ERISA Industry Committee) — Fri, 19 Dec 2014 17:51:00 +0000

In their proposed rule on "Amendments to Excepted Benefits", the Departments of Labor, Treasury, and Health and Human Services indicated:

"This document contains proposed rules that would amend the regulations regarding excepted benefits under the Employee Retirement Income Security Act of 1974, the Internal Revenue Code (the Code), and the Public Health Service Act related to limited wraparound coverage. Excepted benefits are generally exempt from the requirements that were added to those laws by the Health Insurance Portability and Accountability Act and the Patient Protection and Affordable Care Act."

To read more, click here.

The ERISA Industry Committee Publishes the Latest Edition of the ERIC Executive Report

noreply@blogger.com (The ERISA Industry Committee) — Wed, 17 Dec 2014 12:00:00 +0000

The ERISA Industry Committee (ERIC) recently published the latest edition of the ERIC Executive Report. This edition includes:

ERIC NEWS

ERIC Wishes Debra Davis Well as Her Family Relocates to Southern California
Mark Your Calendar Now for ERIC’s 2015 Meetings!
Are You Getting the Most Out of Your ERIC Membership?

RETIREMENT SECURITY

Congress Approves Government Funding Bill with Multiemployer and 4062(e) Provisions
Congress Approves One-Year Extension of Expired Tax Provisions, Including Multiemployer Provisions
IRS Releases 2014 Cumulative List of Changes in Plan Qualification Requirements; Extends Deadline for Pre-Approved DB Plans
DOL Seeks to Establish Focus Groups to Evaluate Service Provider Disclosure Requirements
IRS Updates Weighted Average Interest Rates, Yield Curves, and Segment Rates (Notice 2014-78)
PBGC Updates Table for Early Retirement Benefits for 2015 Distress and Involuntary Terminations
Treasury Department Releases Final Regulations on Electronic Retirement Savings Bond for myRA Program
Senate Finance Committee Republican Staff Releases Tax Reform Analysis
AICPA Issues Advisory to Employee Benefit Plan Sponsors
BrightScope/ICI Study Offers In-Depth Look at 401(k) Plan Data

LEGAL

Solicitor General Invited to File Brief in ERISA Preemption Case

HEALTH CARE COVERAGE

Surprise! Congress Passes a Big Bill!
Updates on TRRP, Indexing the “Affordability” Percentage, and Minimum Essential Coverage and Affordability for Individuals
HHS Issues Proposed Guidance on New Health Plan Rules for 2016 Benefit Year
SHRM/EBRI Survey Finds Employers Increasingly Adopting Wellness Incentives during 2015 Open Enrollment
Value-Based Payment Is Spreading, but Models Need Refinement Commonwealth Fund Contends
AP-NORC Survey Finds Employers Think Plan Quality Ratings Important, but Most Unfamiliar with Objective Quality Metrics

ERIC members and trial members can read more here.

Mintz Levin Examines Look Back Period Communications

noreply@blogger.com (The ERISA Industry Committee) — Tue, 16 Dec 2014 21:45:00 +0000

In "Explaining the Look-Back Measurement Method to Employees", Mintz Levin explains that:

"Many applicable large employers—i.e., employers that are subject to the Affordable Care Act’s (ACA) employer shared responsibility rules—have a pretty good sense of what these rules are, how they work, and what they plan to do to comply. A subset of these employers has gained a sophisticated understanding of the employer shared responsibility rules, while another (hopefully much smaller) subset has only a vague sense that they need to do something by or in 2015 in connection with extending coverage to full-time employees."

To read more, click here.

Covington & Burling Explains Updated Tax Notice for Retirement Plans -

noreply@blogger.com (The ERISA Industry Committee) — Fri, 12 Dec 2014 12:00:00 +0000

In “Time to Update Tax Notices for Qualified Plans”, Covington & Burling explains that:

“The IRS has updated its model Special Tax Notice (sometimes called a “402(f) Notice”) for certain changes in the law since 2009. Employers should review their Special Tax Notices to incorporate required updates. When a tax-qualified retirement plan allows lump-sum distributions (or installments over fewer than 10 years), the plan must allow the recipient to roll over his or her distribution to an IRA or another employer’s tax-qualified plan. The plan administrator must provide to anyone receiving a distribution a notice–commonly called a “Special Tax Notice” or “402(f) Notice”–that describes the tax consequences of a distribution and the recipient’s rollover rights.”

To read more, click here.

Buck Consultants Analyzes 2016 Reinsurance Contribution Rate and OOP Maximims

noreply@blogger.com (The ERISA Industry Committee) — Wed, 10 Dec 2014 12:00:00 +0000

In "HHS Proposes 2016 Reinsurance Contribution Rate and OOP Maximums", Buck Consultants, a Xerox company explains that:

"The Department of Health & Human Services has proposed a 2016 transitional reinsurance rate of $27 and provided additional guidance in several key areas of the reinsurance program. HHS has also proposed 2016 out-of-pocket maximums of $6,850 for self-only coverage and $13,700 for other than self-only coverage, and provided guidance on the marketplace open enrollment periods for 2016 and later years."

To read more, click here.

ERIC members and trial members can read more here.

Year-End Compliance Reminders for Defined Contribution Plans

noreply@blogger.com (The ERISA Industry Committee) — Tue, 09 Dec 2014 12:00:00 +0000

In “2014 Plan Year: Year-End compliance reminders,” Prudential summaries year-end compliance issues for qualified defined contribution plans. The summary discusses the rules for the various tests that plans must have completed as well as the new limits. Prudential also discusses correction issues, including correcting ADP test and ACP test excesses, corrective contributions, corrective distributions, and ensuring the proper correction of contribution allocation errors.

To read more, click here.

Buck Consultants Analyzes PBGC Guidance on DC Rollovers

noreply@blogger.com (The ERISA Industry Committee) — Mon, 08 Dec 2014 14:00:00 +0000

In “PBGC Finalizes Additional Guarantee for DC Rollovers”, Buck Consultants, a Xerox company explains that:

“PBGC has finalized regulations that increase individual participant maximum benefit guarantees when covered defined benefit plans accept rollovers from defined contribution plans in exchange for lifetime income benefits and are subsequently terminated. PBGC anticipates increased use of rollovers and aims to promote retirement security for those benefits.”

To read more, click here.
ERIC members and trial members can read more on this issue here.

IRS’s Employee Plans News Discusses Procedural Guidelines for Pension Equity Plan Determination Letters

noreply@blogger.com (The ERISA Industry Committee) — Fri, 05 Dec 2014 21:57:00 +0000

In the latest edition of Employee Plans News, the Internal Revenue Service (IRS) discusses its new procedural guidelines for pension equity plan determination letters. The newsletter links to the IRS’s PEP Determinations Worksheet and Explanation of PEP Plan Issues, which are intended for use by IRS employees in processing determination letter applications. The IRS indicates that “These documents explain the issues unique to PEP plans that we will take into account when reviewing plan documents, such as how the provision of hypothetical interest impacts the plan’s compliance with the accrual rules of Internal Revenue Code Section 411(b)(1).” The IRS also includes links to its PEP Memorandum. The IRS indicates that the memorandum “highlights the plan document’s compliance with IRC Section 411(b)(1)(G), which generally provides that a participant’s accrued benefit under a qualified defined benefit plan cannot be reduced on account of any increase in the participant’s age or service”.

To read more, click here.

Buck Consultants Highlights 2015 Compliance Issues for Health Plans

noreply@blogger.com (The ERISA Industry Committee) — Wed, 03 Dec 2014 12:00:00 +0000

In "2015 Planning for Health and Welfare Benefit Plan Operations", Buck Consultants, a Xerox company indicates:

"As 2014 comes to a close, it’s time for employers and plan sponsors to look forward to compliance issues for 2015. To that end, the calendar below presents a schedule of activities that address important deadlines for 2015. Additionally, the recently updated Reporting and Disclosure Guide identifies and addresses other activities that are event-based and participant specific. In terms of planning, many of the projects put in place in 2014 will need to be maintained for 2015, but employers and sponsors will also need to address some new issues."

To read more, click here.

Towers Watson Finds that Defined Benefit Plan Risk Declined for Large Companies in 2014

noreply@blogger.com (The ERISA Industry Committee) — Mon, 01 Dec 2014 12:00:00 +0000

In “Pension Risk Declines for Fortune 1000 Plan Sponsors in 2014”, Towers Watson reports that:

“Among companies in the 2013 and 2014 Fortune 1000, the median Pension Risk Index score fell from 1.8% to 1.2% over the last year. Over 2013, a strong stock market increased market capitalization and higher interest rates reduced liabilities. Companies whose pensions pose significant risks might want to consider de-risking their plans by shifting from equity to debt.”

To read more, click here.

Milliman Analyzes Hybrid Plan Guidance

noreply@blogger.com (The ERISA Industry Committee) — Fri, 28 Nov 2014 12:00:00 +0000

In “IRS Issues Final and Proposed Rules for Hybrid Pension Plans”, Milliman indicates that:

“The IRS has published a final rule covering tax-qualified cash balance (hybrid) pension plans, providing guidance on the key issue of “market rate of return.” Sponsors of hybrid plans have waited for four years for this guidance since the agency delayed the effective date of an October 2010 final rule following practitioners’ concerns that the IRS had incorrectly interpreted the statutory definition. In general, the final rule applies to plan years that begin on or after Jan. 1, 2016. The IRS also published a companion proposed rule to facilitate the transition for plan sponsors to adopt requirements, allowing for an election to apply the proposed rule to amendments adopted earlier than Jan. 1, 2016. The IRS seeks comments on the proposal by Dec. 18, 2014.”

To read more, click here.

Mintz Levin Analyzes Changes to the Minimum Value Rules

noreply@blogger.com (The ERISA Industry Committee) — Fri, 28 Nov 2014 12:00:00 +0000

In "Health and Human Services (HHS) Wastes No Time Issuing Proposed Rules Modifying Minimum Value Rules", Mintz Levin indicates that:

"Over the last couple of months, we have followed and reported on a particular ACA compliance strategy under which an employer subject to the Affordable Care Act’s employer shared responsibility (or “pay-or-play”) rules satisfies the requirement to make an offer of coverage under a group health plan that has the look-and-feel of major medical coverage with one significant modification: the plan offers no inpatient hospital coverage or physician services... Following the convention established by promoters of these arrangements, we refer to these arrangements as “minimum value plans” or “MVP arrangements.” Because the monthly premium cost of MVP plans is far less expensive than the cost of traditional major medical coverage that includes inpatient hospital services or physician services, the cost to the employer to make such coverage affordable—and thereby avoiding exposure for assessable payments—is also lowered significantly."

To read more, click here.

Happy Thanksgiving!

noreply@blogger.com (The ERISA Industry Committee) — Thu, 27 Nov 2014 12:00:00 +0000

IRS Amends Safe Harbor Notices on Eligible Rollover Distributions

noreply@blogger.com (The ERISA Industry Committee) — Wed, 26 Nov 2014 12:00:00 +0000

The Internal Revenue Service on November 24 released Notice 2014-74 updating two safe harbor explanations in Notice 2009-68 that can be used to satisfy the requirement under Internal Revenue Code section 402(f) concerning certain information to be provided to recipients of eligible rollover distributions. The changes to the safe harbor explanations relate to the allocation of pre-tax and after-tax amounts, distributions in the form of in-plan Roth rollovers, and certain other clarifications.

To read more, click here.

PBGC Finalizes Rules Regarding the Treatment of Rollover Amounts in DB Plans

noreply@blogger.com (The ERISA Industry Committee) — Wed, 26 Nov 2014 12:00:00 +0000

The Pension Benefit Guaranty Corporation (PBGC) finalized regulations regarding the treatment of rollovers into defined benefit plans if the plan is terminated and trusteed by the PBGC (the “rollover regulations”). The PBGC indicates that the final rollover regulations are the same as the proposed regulation, except for some minor clarifications. The PBGC indicates that it is amending the current rollover regulation in anticipation of the increased use of rollovers from defined contribution (DC) plans to defined benefit (DB) plans, to promote retirement security, and to expand the opportunity for participants to elect lifetime annuity options by rolling over savings from DC to DB plans.

To read more, click here.

ERISA Industry Committee Publishes Latest Executive Report

noreply@blogger.com (The ERISA Industry Committee) — Tue, 25 Nov 2014 21:00:00 +0000

The ERISA Industry Committee (ERIC) has published the latest edition of its Executive Report. This edition includes articles on:

HEALTH CARE COVERAGE

SCOTUS Accepts ACA Exchange Subsidy Case for Review
Agencies Release FAQs Addressing TRRP, Market Reform Provisions, and Stop-Loss Insurance
HHS Extends Deadline for Filing the TRRP Enrollment Counts
Agencies Issue Joint Guidance to Address Minimum Value Plan Standards
Senate HELP Committee Grills Two EEOC Nominees
DOL Posts Updated Health Benefits Coverage Compliance Guide on Website

LEGAL

Join ERIC and Epstein Becker Green for Our Benefits Litigation Update Conference Call
U.S. Supreme Court Hears Oral Arguments in Retiree Health Case
Supreme Court Declines Review of Fiduciary Breach Claims in Tussey v. ABB
Supreme Court Declines to Hear KeyCorp Stock Drop Case

RETIREMENT SECURITY

ERIC to Hold December 8th FocusOn Call on De-Risking and Defined Benefit Plans
ERIC Submits Comment Letter on DOL RFI on Brokerage Windows
ERIC Joins Letter to House and Senate in Support of Frozen Plan and Nondiscrimination Testing Legislation
ERIC Submits Letter on PBGC Information Collection Request on Payouts to Certain Former Employees
PBGC Finalizes Rules Regarding the Treatment of Rollover Amounts in DB Plans
IRS Amends Safe Harbor Notices on Eligible Rollover Distributions
IRS Clarifies Application of One-Per-Year Limit on IRA Rollovers
PBGC 2014 Annual Report Shows Improvement in Single Employer System
GAO Issues Report on Measuring Pension Plan Liabilities
ERISA Advisory Council Offers Recommendations on Lifetime Income, PBM Disclosure, and Outsourcing Plan Services

ERIC members and trial members can read more here.

ERIC Offers Recommendations on PBGC Information Collection Request on De-Risking Activities

noreply@blogger.com (The ERISA Industry Committee) — Tue, 25 Nov 2014 19:35:00 +0000

The ERISA Industry Committee (ERIC), the Washington, D.C.-based trade association representing America’s major employers, today in a letter to the Pension Benefit Guaranty Corporation (PBGC) urged the agency to support plan sponsors’ efforts to maintain their defined benefit pension plans, including methods used by companies which enable them to continue to sponsor these plans.

ERIC offers recommendations that seek to ensure that the PBGC collects information that represents data related to the transactions subject to the Information Collection Request (and does not inadvertently over or under-report relevant data). In addition, ERIC also provides background information regarding de-risking transactions that it believes the PBGC will find helpful as the agency begins to collect data related to these activities.

To read more, click here.

Buck Consultants Analyzes New FAQs on Premium Reimbursement Arrangements

noreply@blogger.com (The ERISA Industry Committee) — Mon, 24 Nov 2014 12:00:00 +0000

In "New FAQs Address Premium Reimbursement Arrangements", Buck Consultants, a Xerox company explains that:

"Building on previous guidance, the departments have issued three new FAQs that address ACA market reform and other compliance issues for premium reimbursement arrangements. The departments warn that employers could be subject to significant excise taxes if they reimburse employees’ individual health insurance premiums either on a pre- or post-tax basis or if they offer employees with high claims risk a choice between the employer’s health plan and cash."

To read more, click here.

IRS Announces Upcoming Retirement Plan Webinars

noreply@blogger.com (The ERISA Industry Committee) — Fri, 21 Nov 2014 12:00:00 +0000

The Internal Revenue Service (“IRS”) recently announced two new retirement plan webinars. On December 4, 2014, the IRS will hold a webinar titled “Properly Defining Retirement Plan Compensation” which will discuss Internal Revenue Code Sections 414(s) & 415 compensation, identifying which definition may be used for each plan purpose, and common plan failures involving compensation. On December 11, 2014, the IRS will hold a webinar on “Retirement Plan Distributions - What every participant should know” which will include taking a distribution from a retirement plan, a new plan distribution rule allows participants to direct pre and post-tax amounts to multiple destinations, exceptions to the additional 10% tax on early distributions from plans, beneficiary designations, and required minimum distributions.

Information on the December 4th call is available here.
Information on the December 11th call is available here.

Supreme Court Declines Review of Fiduciary Breach Claims in Tussey v. ABB

noreply@blogger.com (The ERISA Industry Committee) — Thu, 20 Nov 2014 12:00:00 +0000

The U.S. Supreme Court recently announced that it will not hear the case of Tussey v. ABB, despite encouragement from the Solicitor of Labor to hear the case. The Tussey case involved whether deference should be limited to fiduciaries’ decisions that relate to benefit claims.

In Tussey, the plan participants alleged that the revenue sharing payments and other aspects of plan administration resulted in breaches of fiduciary duties. They claimed that the plan sponsor overpaid for recordkeeping services, which they said subsidized costs for services related to the plan sponsor’s other benefit plans as well as corporate matters. The terms of the plan document provided the fiduciaries with the discretion to determine eligibility regarding benefits and to take any other actions with respect to the plan, including interpreting of the terms of the plan.

ERIC members and trial members can read more here.
The 8th Circuit’s decision is available here.
The Supreme Court’s denial of cert is available here.

U.S. Supreme Court Hears Oral Arguments in Retiree Health Case

noreply@blogger.com (The ERISA Industry Committee) — Thu, 20 Nov 2014 12:00:00 +0000

The U.S. Supreme Court recently heard oral arguments in the case of M&G Polymers USA, LLC v. Tackett, which involves when retiree health benefits are considered to be vested. In M&G Polymers, certain collectively bargained retirees and their dependents who participated in M&G’s health plan sued when M&G required them to make contributions towards the cost of health benefits. They claimed that they had a contractual right to lifetime contribution-free health care benefits based on the language that was in the collective bargaining agreements (“CBAs”) when they retired. The CBAs do not explicitly address the duration of retiree health benefits and the company argues that they do not provide for vested lifetime benefits.

ERIC members and trial members can read more here.
The 6th Circuit’s decision is available here.

ERIC’s amicus brief is available here.
The transcript of the oral arguments is available here.
Additional information is available here.

ERIC Urges DOL to Ensure Any Guidance on Brokerage Windows is Narrowly Tailored to Address Specific Concerns

noreply@blogger.com (The ERISA Industry Committee) — Wed, 19 Nov 2014 19:02:00 +0000

The ERISA Industry Committee (ERIC) submitted comments to the Department of Labor (DOL) responding to the agency’s request for information on brokerage windows in retirement plans.

ERIC provided the DOL with information regarding the use of brokerage windows in large retirement plans. ERIC explained that large retirement plans offer a variety of investment options to meet the diverse needs of their plans’ participants.

To read more, click here.