On April 3, 2018, The Eighth Circuit Court of Appeals affirmed a summary judgment decision against Susan Wengert who had sued the plan administrative committee of the Majors Plastics ESOP, the personal representative of the Timothy McConnell Estate and the Trustee of the Timothy McConnell Trust in federal district court for her husband’s accrued benefit
Department of Labor Issues Proposed Rules Expanding Access to Association Health Plans
On October 12, 2017 President Trump issued an Executive Order concerning a number of health plan market initiatives. One of the items included in the Executive Order was a directive to the Secretary of Labor to issue proposed regulations or guidance within 60 days from the date of the Order, “to expand access to
Tibble and Class Action Plaintiffs Win Round Two versus Edison International and Its 401(k) Investment Committees
In past articles in this Blog I reported on decisions of the 9th Circuit Court of Appeals and ultimately the U.S. Supreme Court dealing with a class action for breach of fiduciary duty for selecting retail mutual funds in 1999 for which lower costs institutional funds were available. https://benefitsnotes.com/2013/04/ninth-circuit-decides-selection-of-retail-mutual-funds-was-a-breach-of-fiduciary-duty/ ; https://benefitsnotes.com/2015/05/supreme-court-401k-plan-fiduciaries-have-an-ongoing-duty-to-monitor-2/ The case stalled
No Additional Delay on Effective Date of New Fiduciary Standards – DOL
This week, new U.S. Department of Labor Secretary Acosta announced that the final fiduciary regulations would go into effect on June 9, 2017. The Department also issued two pieces of guidance with regard to the regulations also referred to as the “Conflicted Advice Rules”. The guidance consists of a set of FAQs issued by the
Embezzlement of 401(k) Deferrals by COO of Architecture Firm is (Doubly) Costly
On March 22, 2017, the U.S. Court of Appeals for the Second Circuit ruled against Christine Bodouva that her restoration of funds to her Company’s 401(k) Plan should be offset against the District Court’s order for forfeiture in her criminal trial. U.S. v Christine Bodouva, Case 16-3937, 2nd Cir. 3/22/17.
BACKGROUND
Ms. Bodouva
IRS Issues Substantiation Guidelines for 401(k) Hardship Distributions
On February 23, 2017, the Internal Revenue Service issued a “Memorandum for Employee Plans (EP) Examinations Employees,” outlining Substantiation Guidelines for safe harbor hardship distributions from 401(k) plans (“Memorandum”). The purpose of the Memorandum is to provide IRS field examiners with guidance when examining 401(k) plans, for compliance with the 401(k) hardship regulations. The IRS
Owner/Trustee of 401(k) Plan Accused of Having Eyes Wide Shut on Fiduciary Duties
Last June I blogged about the trend of participant fee class actions moving down to smaller 401(k) Plans. https://benefitsnotes.com/2016/06/inside-trustees-for-small-minnesota-401k-plan-face-class-action-over-excessive-fees/ Occasionally, class actions are brought based on other breaches of fiduciary duties, particularly those involving significant drops in value of concentrated Plan investments such as employer stock referred to as “Stock Drop Cases”. A similar class
Inside Trustees for Small Minnesota 401(k) Plan Face Class Action Over Excessive Fees
A Minneapolis law firm recently filed a class action complaint against Lamettry’s Collision, Inc. and the Trustees of its 401(k) Plan, CFO Stephen Daniel and President Joan Lamettry for various breaches of fiduciary duty with respect to fees charged to Plan participants’ accounts in the Company’s 401(k) Plan. Specific allegations include: (a) failure to assess
IRS Relaxes Rules for Mid-Year Changes
Since its availability, many 401(k) plan sponsors, particularly smaller employers have adopted a “Safe Harbor” plan design under Code Section 401(k)(12) or (13) and 401(m)(11) or (12). Safe Harbor plan designs include both a fully vested 3% qualified non-elective employer contribution or a fully vested employer matching contribution equal to 100% of employee deferrals on
Another ROBS Gone Wrong – IRS Disqualifies ESOP
On November 23, 2015, the U.S. Tax Court issued a declaratory judgment that the Internal Revenue Service (IRS) did not abuse its discretion in issuing a Letter of Revocation of the tax qualified status of the Fleming Cardiovascular, P.A. Employee Stock Ownership Plan (ESOP).
Background
The Plan sponsor, Fleming Cardiovascular, P.A. (the “P.A.”) was formed