The IRS has proposed new regulations on hardship distributions for participants who need to take money from their retirement savings. The new regulations will generally provide greater leeway for participants who want access to more of their retirement savings. These changes will go into effe...
Most retirement plans provided by employers have a tax-favored status to provide tax savings to both employers and beneficiaries. However, when a retirement plan does not continue to meet the necessary requirements, the plan can lose tax-favored status and end up costing plan providers. Employer...
Contributing Author: Kristine M. Custodio, ACP, Senior Paralegal On November 1, 2018, the Internal Revenue Service announced cost-of-living adjustments which will be affecting dollar limitations for qualified pension plans for the 2019 tax year. Section 415 of the Internal Revenue Code provides ...
The costs of going to college have continued to rise over the past decade. One way to help alleviate the high costs of education is to take advantage of tax-advantaged savings plans. One such plan is called a Section 529 education savings plan. An education savings plan allows individuals to op...
October is employee ownership month. As of 2018, the United States had 5,505 Employee Stock Ownership Plan ("ESOPs") with 1.7 million participants.[1] There are 1,164 401(k) ESOPs ("KSOPs") with over 12 million participants.[2] California alone has 804 ESOPs totaling over 1 million participants....
Contributing Author: Gwenllian Kern-Allely, Law Clerk In 2011, the baby boomer generation began turning 65. With the majority of businesses in the nation owned by persons over the age of 45, the number of business owners looking to retire in the next 15 years could place over $10 trillion in a...
Contributing Author: Gwenllian Kern-Allely, Law Clerk Employee ownership has many forms. The most common in the U.S. is the employee stock ownership plan (ESOP). Cooperatives (co-ops) and other profit-sharing plans also exist as a way for employees to benefit from the company's profits duri...
Employers dealing with employment litigation may be relieved when the parties agree to a settlement. A settlement agreement will generally mean the end of further disputes with the party in question, avoiding further litigation, and the unknown outcome of a trial. However, when a release of c...
In the recent Dynamex v. Lee decision, the Supreme Court of California has fundamentally changed the classification system used to distinguish between employees and independent contractors.
Contributing Author: Gwenllian Kern-Allely, Law Clerk Since 1974, very little legislation has been passed by the United States Congress regarding employee ownership initiatives. In the last two years, two new bills have made their way through the legislative chambers with the aim of encouraging ...
Contributing Author: Gwenllian Kern-Allely, Law Clerk On August 13, 2018, the 2019 National Defense Authorization Act (N.D.A.A.) was signed by the President of the United States. It is the fastest N.D.A.A. passed by Congress in twenty years, with large bipartisan support. The House of Representa...
In an ongoing ERISA class action lawsuit, an Indiana court found that Facebook messages were discoverable, despite a nondisocoverable order applying to instant messages. Most users treat online messaging differently than drafting an email; however, the court may consider messages the same as ...
A 403(b) plan is a type of retirement plan that allows participating employees to make pre-tax contributions. Also called a tax-sheltered annuity or TSA plan, 403(b)s are generally offered to employees of public schools and certain tax-exempt organizations, like churches or government organiz...
Retirement plan sponsors have a continuing fiduciary duty to plan participants in a defined contribution plan. When employees allege the employer or plan sponsor has not acted in the sole interest of the participants or followed the plan requirements, the plan sponsor may be liable for losses...
In a putative class action lawsuit involving an alleged breach of ERISA fiduciary duties, the 9th Circuit Court of Appeals upheld the district court's denial of a motion to compel arbitration. The individual plaintiffs had all signed arbitration agreements as part of their employment contract...
Under ERISA, benefit plan administrators, managers, or those who control plan assets have a fiduciary duty to plan participants. One of those fiduciary duties includes following the terms of the plan documents. This includes how the plan determines eligibility for benefits and makes factual det...
Under Internal Revenue Service (IRS) rules, a distribution from an eligible retirement plan of a deceased employee made to a designated beneficiary may be treated as an eligible rollover. A non-designated beneficiary, generally, cannot get the benefits of a rollover. However, in a Private Lette...
Although settlement agreements are not legal precedent, they do provide guidance on the Department of Labor's (DOL's) position and its interpretation of applicable laws, and can thus help fiduciaries make changes now to avoid potential liability in the future. A number of recent settlement agre...
Under the Employee Retirement Income Security Act of 1974 (ERISA), retirement plan sponsors have a fiduciary duty that requires them to act solely in the interest of plan participants and beneficiaries. Plan sponsors are also limited to using plan assets for the reasonable expenses of adminis...
The Internal Revenue Service (IRS) requires that pre-approved qualified employee retirement plan documents be restated every 6-years to stay compliant as pre-approved plans. When plan sponsors miss the pre-approval deadlines, they risk losing qualified status, which could result in employees ...
Do you have the financial security to be able to one day retire from your small business? Many small business owners are so focused on growing their business that they do not take the time to focus on what will happen when they are finally ready to retire. However, there are options available f...
The Employee Retirement Income Security Act (ERISA) is a complex and continually changing federal law that applies to most private sector employee benefit plans. When companies unintentionally run afoul of ERISA regulations it can expose them to fines, penalties, and costly litigation. Unders...
A former plan administrator and trustee of a lighting company's pension plan has been ordered to pay more than $1.6 million in restitution. The former owner of North Carolina's House of Lights was found to be issuing prohibited payments from the company's profit-sharing plan. An investigation ...
Under ERISA, those who administer, manage, or control plan assets have a fiduciary duty to plan participants. One of the many fiduciary duties of plan sponsors is to provide disclosures to plan participants, including a summary of material modifications (SMM), annual reports, and notice of an...
In a claim for disability benefits under ERISA, the court granted the plaintiff's motion for attorneys' fees and denied the defendant's request for attorneys' fees despite the defendant's success on the merits. Olga Gorbacheva filed an ERISA lawsuit after her employer, Abbott Laboratories, den...