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April 19, 2024

As We Go to E-Press

Since the Fall 2023 Newsletter, much has happened in the benefits world. This edition covers a wide range of topics for ERISA practitioners, but it doesn’t cover everything. Below are a few other important updates that didn’t 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.

  • DOL Proposes Automatic Portability Regulation: On January 29, 2024, the U.S. Department of Labor published a notice of proposed rulemaking on automatic portability transactions under the SECURE 2.0 Act. The department’s proposed rule would implement Section 120 of the SECURE 2.0 Act, which allows an automatic portability provider to receive a fee in connection with executing an automatic portability transaction for certain distributions into Safe Harbor IRAs, through an added exemption to Internal Revenue Code section 4975. Automatic portability transactions aim to help workers keep track of their retirement savings accounts and improve retirement security by reducing cash-outs when they change jobs.
  • DOL Seeks Public Comment on Retirement Plan Disclosures: On January 23, 2024, the U.S. Department of Labor published a Request for Information (“RFI”) in the Federal Register concerning potential changes to the reporting and disclosure requirements for retirement plans. The RFI covers a broad range of topics including the quantity of disclosures sent to plan participants, whether workers understand the information disclosed to them, and retirement plans’ experience completing the disclosures. The deadline to respond to the RFI is April 22, 2024.
  • Plaintiffs Petition for SCOTUS Review of Prohibited Transaction Ruling: On March 11, 2024, the plaintiff-participants in Cornell University’s two retirement plans petitioned for a writ of certiorari from the Supreme Court of the United States, seeking review of the Second Circuit’s ruling that to state a claim under 29 U.S.C. § 1106(a)(1)(C), a plaintiff must allege that the challenged transaction was unnecessary or involved unreasonable compensation. Plaintiffs urged the Court to resolve a developing split between circuits that interpret § 1106(a)(1)(C) narrowly (the Second, Third, Seventh, and Tenth Circuits) and those applying a broader interpretation (the Eighth and Ninth Circuits).
  • 5th Circuit Considers DOL’s ESG Rule: A group of 26 state attorneys general appealed the dismissal of their lawsuit challenging a 2022 Department of Labor rule that permits environmental, social and governance factors to be considered when selecting retirement plan investments. Amici in support of the attorneys general included The National Center for Public Policy Research and the Manhattan Institute. Amici in support of the Department of Labor included a group of 20 state attorneys general, the Institute for Policy Integrity at New York University School of Law, and a group of six ERISA law professors.
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