In proposed regulations recently released, the DOL delayed the effective date of its new fiduciary duty rule and related exemptions by 60 days, from April 10, 2017 to June 9, 2017. The DOL’s announcement follows a presidential memorandum issued on February 3, 2017, directing the DOL to reconsider the new fiduciary duty rule to determine whether it may adversely affect the ability of individuals to gain access to retirement information and financial advice. The 60-day extension is intended to give the DOL time to collect information and to consider comments it receives related to issues raised in the presidential memorandum before the rule and exemptions become effective. For additional information on the fiduciary duty rule in its current form, please see our blog post. View the proposed regulations.
On December 28, 2016, the DOL released Interpretive Bulletin 2016-01 (the “Bulletin“), which provides updated guidance for ERISA plan fiduciaries with respect to the voting of proxies on individual securities held in employee benefit plan portfolios and the appropriateness of active engagement with corporate management by plan fiduciaries. In publishing the Bulletin, the DOL withdrew Interpretive Bulletin 2008-2 and generally reinstated the language of Interpretive Bulletin 94-2, with certain clarifications. The DOL was concerned that Interpretive Bulletin 2008-2 had been misunderstood in a manner that dissuaded plan fiduciaries from voting proxies and otherwise prudently exercising shareholders’ rights, particularly with respect to areas concerning environmental, social, and governance issues and active engagement with corporate management. View the Bulletin here. View a news release related to the Bulletin here.
The DOL has issued the first of several FAQs addressing the DOL’s new fiduciary rule, which was finalized in April 2016 (the “Rule”). The Rule, which will generally become effective on April 10, 2017, prohibits parties that provide fiduciary investment advice to plan sponsors, plan participants, and IRA owners from receiving payments that create conflicts of interest, unless the parties comply with a prohibited transaction exemption (“PTE”). The FAQs generally address how the Rule will be implemented and clarify a number of issues related to the new “best interest contract” and “principal transactions” PTEs. View the FAQs. View the DOL’s announcement of the FAQs.
The DOL issued a press release announcing its recent settlement with fiduciaries of a group health plan (the “Plan”) sponsored by Sierra Pacific Industries, a major western lumber producer. The press release followed the conclusion of a DOL investigation that determined the Plan did not comply with the Affordable Care Act (“ACA”) and ERISA in certain respects. In particular, the DOL found problems with the Plan’s claims processing, with the clarity of the Plan’s documents, and with the application of the Plan’s procedures for deciding claims. In addition, the DOL found the Plan had been administered erroneously under ACA “grandfathered status” since January 1, 2013. As a result of this investigation, the Plan’s fiduciaries agreed to (i) revise the Plan’s documents and internal procedures; (ii) re-adjudicate past claims for preventive services, out-of-network emergency services, claims affected by an annual limit, and pay claims in compliance with the ACA and ERISA;… Continue Reading
The IRS announced tax relief for victims of severe storms and flooding in the Texas-Houston area. This relief generally extends from April 17, 2016 through September 1, 2016, and covers taxpayers who reside or have a business in Fayette, Grimes, Harris, or Parker Counties. The relief also includes the filing of Forms 5500 with the IRS. The DOL has mirrored the IRS’s Form 5500 filing relief. In addition, PBGC is waiving certain penalties and extending certain deadlines. PBGC’s announcement provides relief relating to PBGC deadlines to persons responsible for meeting a PBGC deadline who are located in the disaster area for which the IRS has provided relief. If the IRS adds additional areas in connection with those filing extensions, any person responsible for meeting a PBGC deadline that is located in those additional areas will also be entitled to that relief. The IRS announcement is available here. The DOL announcement is… Continue Reading
On November 18, 2015, the U.S. Department of Labor (“DOL”) published proposed amendments to the claims procedure regulations under ERISA with respect to claims for disability benefits. Generally, these amendments have the effect of extending to disability benefit claims several of the procedural protections that were added by the Affordable Care Act for health benefit claims, particularly regarding internal claims and appeals under group health plans (e.g., providing expanded benefit denial notices written in a culturally and linguistically appropriate manner). If the proposed regulations are adopted as final, administrators of plans providing disability benefits would be required to implement these enhanced claims and appeals procedures. The proposed regulations are available here.
On April 14, 2015, the DOL issued a comprehensive package of proposed regulations and related guidance designed to protect retirement plan sponsors, participants, and IRA owners from perceived conflicts of interest in the retirement investment advice industry. As part of the DOL’s “Conflicts of Interest” proposal, a new regulation defining who is a “fiduciary” by reason of giving investment advice to retirement plan investors (including IRA owners) has been proposed to replace the current regulation defining a fiduciary in the retirement investment advice context, which was issued in 1975. The proposed regulation would significantly broaden the number of advisors subject to a fiduciary standard by expanding the scope of what is considered investment advice. There are some notable “carve-outs” from the definition of investment advice, such as for investment education and sales pitches to fiduciaries of large plans. Links to the proposed regulations, a news release, FAQs, and a fact… Continue Reading
The U.S. Department of Labor (the “DOL”) has issued a notice of proposed rulemaking regarding a revision to the definition of “spouse” under the Family and Medical Leave Act of 1993 (“FMLA”). The revision is being proposed in light of the U.S. Supreme Court’s decision in United States v. Windsor, which held Section 3 of the federal Defense of Marriage Act, restricting the definition of “marriage” for federal law purposes to opposite-sex spouses, to be unconstitutional. Under the FMLA, eligible employees are permitted to take a leave of absence to care for a spouse in certain situations. Current regulations under the FMLA define “spouse” based on the law of the state in which the employee resides; consequently, a same-sex couple who is married in a state or foreign jurisdiction that allows same-sex marriage is not treated as married under the FMLA if they reside in a state that does not recognize… Continue Reading