A participant in a severance plan sued her employer for income tax withholding amounts in contravention of Puerto Rico’s Law 80. Law 80 prescribes the amount of severance that must be paid to employees in Puerto Rico and further provides that it is not subject to Puerto Rico income tax withholding. The U.S. Federal District Court held that her claim was completely pre-empted by ERISA because the severance plan in question was an ERISA plan. The court would have had to interpret the terms of the plan to determine whether the severance benefits it provided conflicted with Law 80. As such, Law 80 “related” to the plan and was thus pre-empted. Colon-Rodriguez v. Astra/Zeneca Pharmaceuticals, LP, No. 3:11-cv-01495-FAB (D.P.R. Dec. 13, 2011).
DOL Issues Revised Guidance Regarding Use of Electronic Media to Satisfy Participant-Level Fee Disclosure Requirements
The Department of Labor (DOL) released Technical Release 2011-03R, which restates and clarifies the scope of previously issued Technical Release 2011-03. Technical Release 2011-03 provided guidance in the form of an interim enforcement policy regarding the use of electronic media to satisfy the fee disclosure requirements for participant-directed individual account plans with respect to disclosure of certain fee information required for participant directed investment plans and disclosures through continuous access websites for such information. Technical Release 2011-03R is available here.