On September 11, 2018, Governor Jerry Brown signed a new mediation bill into law that is intended to inform clients about confidentiality in the mediation process. The new law, which went into effect on January 1, 2019, requires lawyers to provide specific disclosures in writing and have the ...
The Employee Benefits Security Administration (EBSA) enforces ERISA laws and regulations, including conducting civil and criminal investigations. EBSA enforcement of ERISA laws often results in recovering money from enforcement actions, voluntary fiduciary correction programs, abandoned plan ...
In recent years, there has been an increase in considering environmental, social, and governance (ESG) criteria when it comes to investing. However, not all investors agree that ESG factors should be considered when identifying prudent investments. The Department of Labor (DOL) recently put o...
The current Secretary of Labor, R. Alexander Acosta, issued a message laying out the DOL's Strategic Plan for Fiscal Years 2018-2022. As part of the strategic plan, an objective of the Employee Benefits Security Administration (EBSA) will be to “improve the security of retirement, health, and oth...
Employee-ownership can benefit company owners and employees. A recent initiative is also exploring employee share ownership as an investment strategy in low-income communities. This includes discussing how employee-ownership could contribute to increased investment in designated Opportunity Z...
A recent survey shows Employee Stock Ownership Plans (ESOPs) offer higher retirement savings than other retirement plans. The survey, released by the National Center for Employee Ownership (NCEO) shows ESOP participants have more than twice as much in their retirement accounts compared to non...
Claims for an ERISA breach of fiduciary duty must be filed within six years, or within three years if the plaintiff has actual knowledge of the breach or violation. In a recent 9th Circuit Court of Appeals decision, the court found that access to the documents disclosing the breach does not c...
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...