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DOL proposes new ESG and proxy voting regulation – would significantly change rules adopted by the Trump DOL at the end of 2020

On October 13, 2021, the Department of Labor released a proposed regulation on “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights” (environmental, social, or governance (ESG) investing and proxy voting), proposing to significantly revise the position taken by the Trump DOL at the end of 2020 on these issues. (We discuss the…Read More

2022 Increases for Retirement Plans, Social Security

The Social Security Administration just announced benefit increases effective in 2022. Current retirees will receive a cost-of-living increase, beginning in January 2022, of 5.9%, reflecting the increase in CPI-W between the 3rd quarter of 2020 and the 3rd quarter of 2021, the largest inflation adjustment in 40 years. In addition, the maximum amount of earnings…Read More

401(k) fee litigation – what must a plaintiff allege to survive a motion to dismiss? Forman v. TriHealth and Hughes v. Northwestern

This term the Supreme Court is considering – for the first time – critical issues in defined contribution plan fee litigation, in Hughes v. Northwestern. In this note we discuss the recent decision (September 24, 2021) by the United States District Court for the Southern District of Ohio, dismissing plaintiffs’ claims in Forman v. TriHealth,…Read More

Hardship withdrawals after BBA 2018

The Bipartisan Budget Act of 2018 (BBA 2018), signed into law by President Trump on February 9, 2018, included several modifications to the 401(k) hardship withdrawal rules. While the changes are generally not effective until the 2019 plan year, they will fundamentally change how hardship withdrawals work and present issues both for regulators and plan…Read More

DB endgames

A number of factors are resulting in improved defined benefit plan funding. And as plans approach “full funding,” some sponsors are considering plan termination as an option. In this article we briefly review: (1) the factors/moving parts affecting funded status; (2) (very generally) the effect of recent trends in those factors on plan funded status;…Read More

June 2018 Pension Finance Update

June was another decent month for pension sponsors, rounding out a solid quarter and first half of 2018 for pension finance, as stock markets have eked out modest gains while higher interest rates have decreased pension liabilities. Both model plans we track1 at least held steady again last month – traditional Plan A gained 1%…Read More

Legislative update – June 2018

In March 2018 there was a possibility that all or part of the Senate’s bipartisan Retirement Enhancement and Savings Act of 2018 (RESA), which addressed a number of important retirement policy issues, would be included in omnibus spending legislation that was passed on March 23, 2018. That ultimately did not happen, because of objections raised…Read More

SEC investment adviser proposal

On April 18, 2018, the SEC proposed (1) a “Regulation Best Interest” providing new conduct standards for broker-dealers, (2) an “Interpretation Regarding Standard of Conduct for Investment Advisers” that “reaffirms, and in some cases clarifies, certain aspects of the fiduciary duty that an investment adviser owes to its clients,” and (3) a requirement that investment…Read More

DOL provides temporary enforcement relief for possible prohibited transactions resulting from the Fifth Circuit decision

On May 7, 2018, the Department of Labor published Field Assistance Bulletin 2018-02, Temporary Enforcement Policy On Prohibited Transactions Rules Applicable To Investment Advice Fiduciaries, providing temporary relief for certain prohibited transactions that may result from the Fifth Circuit’s decision vacating the exemptions included in the Fiduciary Rule regulation package. In this article we discuss…Read More

Field Assistance Bulletin 2018-1 – DOL clarifies guidance on economically targeted investments and proxy voting, again

On April 23, 2018, the Department of Labor published Field Assistance Bulletin (FAB) No. 2018-01 on Interpretive Bulletins (IBs) 2015-01 (economically targeted investments) and 2016-01 (proxy voting). The issue of economically targeted investments (ETIs) (particularly) has become “political,” with the Clinton, Bush, Obama and (now) Trump DOL’s all weighing in with (differing) guidance on it….Read More