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October 01, 2024

As We Go to E-Press

The Fall 2024 Newsletter contains all the benefits news that is fit to print, and yet there is more. Below are a few other important updates that did not get their own articles. As always, we encourage you to contact us if there is a topic that you would like to see covered in greater depth in the future.

  • Final Rules Issued to Strengthen Access to Mental Health and Substance Use Disorder Benefits: On September 9, 2024, the U.S. Departments of Labor, Health and Human Services, and the Treasury published final rules to clarify and strengthen protections of mental health and substance use disorder benefits. The rules were issued pursuant to the Mental Health Parity and Addiction Equity Act of 2008. The new rules add additional protections against more restrictive, nonquantitative treatment limitations for mental health and substance use disorder benefits as compared to medical or surgical benefits.
  • DOL Updates Cybersecurity Guidance to Protect Plan Information and Assets: On September 6, 2024, the U.S. Department of Labor issued updated cybersecurity guidance aimed to help plan sponsors, plan fiduciaries, recordkeepers and plan participants. Compliance Assistance Release No. 2024-01 includes tips for plan sponsors and fiduciaries who are hiring a service provider, cybersecurity best practices for fiduciaries and recordkeepers, and online security tips for plan participants and beneficiaries.
  • 401(k) Forfeiture Lawsuits Yield Contrasting Rulings: Courts have issued conflicting rulings on motions to dismiss in several recent lawsuits challenging how employers use 401(k) forfeitures. Several cases have been filed this year bringing novel claims that using assets forfeited by terminated participants to reduce company contributions to the plan—rather than using those funds to defray the plan’s administrative expenses—is a breach of ERISA’s duties of loyalty and prudence, and violates ERISA’s anti-inurement and prohibited transaction provisions. Some courts have denied motions to dismiss, holding that forfeited funds are assets of the plan that may not be used for the plan sponsor’s benefit. See Perez-Cruet v. Qualcomm Inc., No. 23-CV-1890-BEN (MMP), 2024 WL 2702207 (S.D. Cal. May 24, 2024), reconsideration denied, No. 23-CV-1890-BEN (MMP), 2024 WL 3798391 (S.D. Cal. Aug. 12, 2024); Rodriguez v. Intuit Inc., No. 23-CV-05053-PCP, 2024 WL 3755367 (N.D. Cal. Aug. 12, 2024). Other courts have granted motions to dismiss, reasoning that forfeited funds need not be used to pay administrative expenses unless the plan document says otherwise. See Hutchins v. HP Inc., No. 23-CV-05875-BLF, 2024 WL 3049456 (N.D. Cal. June 17, 2024); Naylor v. BAE Sys., Inc., No. 1:24-CV-00536 (AJT/WEF), 2024 WL 4112322 (E.D. Va. Sept. 5, 2024). Numerous other lawsuits bringing similar claims await rulings on motions to dismiss.
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