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A Mistake a Day: Top 5 401(k) Compliance Mistakes & Best Practices

October 22, 2018

Authors

Meredith Jacobowitz and Lisa Van Fleet

A Mistake a Day: Top 5 401(k) Compliance Mistakes & Best Practices

October 22, 2018

by: Meredith Jacobowitz and Lisa Van Fleet

Last week, we discussed four of the five most common compliance mistakes made by 401(k) plan administrators and fiduciaries, the potential liability associated with such mistakes, and steps you can take to avoid making them yourself.

On Monday, we discussed failures to timely update plan documents.

On Tuesday, we discussed an SPD’s failure to accurately describe the terms of a plan.

On Wednesday, we discussed a plan’s definition of compensation.

On Thursday, we discussed delinquent contributions.

We hope you enjoyed this refresher on best compliance practices.  For our last post in this five-part series, we discuss a topic that never goes out of style…

Plan Governance

Description

Plan governance generally encompasses the oversight policies and procedures that plans enact to ensure good process and operational compliance. The following discussion addresses two specific aspects of plan governance—those which are

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A Mistake a Day: Top 5 401(k) Compliance Mistakes & Best Practices

October 15, 2018

Authors

Meredith Jacobowitz and Lisa Van Fleet

A Mistake a Day: Top 5 401(k) Compliance Mistakes & Best Practices

October 15, 2018

by: Meredith Jacobowitz and Lisa Van Fleet

Mistakes are all too easy to make, but fortunately, they are also easy to prevent! This week, we are discussing the five most common compliance mistakes made by 401(k) plan administrators and fiduciaries, the potential liability associated with such mistakes, and steps you can take to avoid making them yourself. Each day we will discuss a new compliance mistake, so stay tuned.

Failure to Timely Update Plan Document

Description

Statutes and regulations establishing qualification requirements change relatively frequently. Plans must be modified to conform to the requirements as required by each statute and regulation.

Potential Liability

Potential liability will differ based on the statute or regulation in question. In some circumstances, failure to timely adopt legislative and/or regulatory changes may result in disqualification of the plan.

Examples

Most recently, the Department of Labor updated the regulation governing the process for disability claims. The new regulations provide participants with enhanced rights,

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Worried About the Fiduciary Rule? Don’t Be…Yet!

March 21, 2017

Authors

benefitsbclp

Worried About the Fiduciary Rule? Don’t Be…Yet!

March 21, 2017

by: benefitsbclp

Pen Marking Days on a CalendarThe Department of Labor (DOL) released Field Assistance Bulletin 2017-01 on March 10, 2017, which outlines a temporary enforcement policy related to its final fiduciary rule.

Background

On February 3, 2017, President Trump directed the DOL to re-examine the final rule’s impact. As a result, on March 2, 2017, the DOL opened a 15-day comment period (which ended last Friday) on a proposed 60-day delay of the rule’s effective date, from April 10, 2017 to June 9, 2017.

Simultaneously, the DOL opened a 45-day comment period on the substance of the actual rule. This second comment period affords the DOL with an opportunity to review comments before June 9, 2017 (the proposed delayed effective date). At such point, the DOL could allow the final rule to take

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Just Push Pause: Revisiting Proposed Regulations

February 21, 2017

Authors

Katharine Finley and Brian Berglund

Just Push Pause: Revisiting Proposed Regulations

February 21, 2017

by: Katharine Finley and Brian Berglund

On January 20, 2017, President Trump signed an executive order entitled “Regulatory Freeze Pending Review” (the “Freeze Memo“).  The Freeze Memo was anticipated, and mirrors similar memos issued by Presidents Barack Obama and George W. Bush during their first few days in office.  In light of the Freeze Memo, we have reviewed some of our recent posts discussing new regulations to determine the extent to which the Freeze Memo might affect such regulations.

TimeoutThe Regulatory Freeze

The two-page Freeze Memo requires that:

  • Agencies not send for publication in the Federal Regulation any regulations that had not yet been so sent as of January 20, 2017, pending review by a department or agency head appointed by the President.
  • Regulations that have been sent for publication in the Federal Register but not yet published be withdrawn,
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  • Top 10 Employee Benefits New Year’s Resolutions for 2017

    January 11, 2017

    Authors

    Chris Rylands and Lisa Van Fleet

    Top 10 Employee Benefits New Year’s Resolutions for 2017

    January 11, 2017

    by: Chris Rylands and Lisa Van Fleet

    new-years-resolutionsIf statistics are any guide, by now a significant number of you have already broken your New Year’s resolutions.  However, there’s still plenty of time to make new ones that you can break, er, keep.  If you sponsor or work with an employee benefit plan (and odds are, if you’re reading this, that you do), then here are some ideas to keep in mind in the upcoming year:

  • Fiduciary, Know Thyself. It important to know your fiduciaries (or know if you are one). Reviewing plan documents, charters, and delegations, among other possible documents, are key to determining who is an ERISA fiduciary. You should make sure that any individuals who have been designated are still willing and able to serve and, if not, they should be removed. While not as much of an
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  • ACA Facelift to Disability Claims Process Could Affect All Plans

    December 20, 2016

    Authors

    Chris Rylands and Steven Schaffer

    ACA Facelift to Disability Claims Process Could Affect All Plans

    December 20, 2016

    by: Chris Rylands and Steven Schaffer

    claimIt might be tempting to conclude that the recent Department of Labor regulations on disability claims procedures is limited to disability plans.  However, as those familiar with the claims procedures know, it applies to all plans that provide benefits based on a disability determination, which can include vesting or payment under pension, 401(k), and other retirement plans as well. Beyond that, however, the DOL also went a little beyond a discussion of just disability-related claims.

    The New Rules

    The new rules are effective for claims submitted on or after January 1, 2018. Under the new rules, the disability claims process will look a lot like the group health plan claims process.  In short:

    • Disability claims procedures must be designed
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    Exceptional Plan Governance: Beat Back the Coming Litigation Onslaught

    June 6, 2016

    Authors

    benefitsbclp

    Exceptional Plan Governance: Beat Back the Coming Litigation Onslaught

    June 6, 2016

    by: benefitsbclp

    Gavel and ScalesIt was bound to happen. For several years, the plaintiffs’ bar has sued fiduciaries of large 401(k) plans asserting breach of their duties under ERISA by failing to exercise requisite prudence in permitting excessive administrative and investment fees.  It may be that the plaintiffs’ bar has come close to exhausting the low-hanging lineup of potential large plan defendants, and, if a recent case is any indication, the small and medium-sized plan fiduciaries are the next target.  See, Damberg v. LaMettry’s Collision Inc., et al. The allegations in this class action case parallel those that have been successful in the large plan fee dispute cases. Now that the lid is off, small and medium sized plan fiduciaries should be forewarned of the need to employ solid plan governance

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    SCOTUS Meant What It Said & Said What It Meant: Dudenhoeffer Imposes Higher Pleading Standards

    January 27, 2016

    Authors

    Jeffrey Russell and Katharine Finley

    SCOTUS Meant What It Said & Said What It Meant: Dudenhoeffer Imposes Higher Pleading Standards

    January 27, 2016

    by: Jeffrey Russell and Katharine Finley

    Stock DropIn a rebuke to the Ninth Circuit, the Supreme Court granted the Amgen defendants’ petition for certiorari, reversed the Ninth Circuit’s judgment and remanded the case for further proceedings consistent with its opinion in the district court. The unanimous per curiam opinion was issued without further briefing and oral argument, an unusual step in civil cases. The substance of the opinion and its handling by summary disposition sends a clear message: the Court meant what it said in Dudenhoeffer when it stressed the role of motions to dismiss in “divid[ing] the plausible sheep from the meritless goats” and crafted new liability requirements that plaintiffs must plausibly allege are met in order to state a claim. Admittedly, we steal liberally from Judge Kozinski’s dissent in Amgen in characterizing the

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    The Force Awakens on 2016

    January 4, 2016

    Authors

    benefitsbclp

    The Force Awakens on 2016

    January 4, 2016

    by: benefitsbclp

    ThinkstockPhotos-101346654The ball dropped on 2016, but don’t drop the ball on your benefit plan compliance.  As part of our annual tradition, we’re pleased to present this year’s Top Ten New Year’s Countdown for the reading pleasure of our fellow ERISA geeks.  You may remember last year’s Top Ten list was set to Pop Culture themes that dominated 2014?  Well, we’ve decided to embrace the Star Wars fever that currently has a firm grip on our society and devote our entire list to Star Wars’-themed tips.  Get your lightsabers ready…

  • This epic space opera list starts just where you’d expect it:  A long time ago in a galaxy far, far away (called Congress)…there was born a law called the Patient Protection and Affordable Care Act. The law made it through infancy and even toddlerhood…but then
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  • DOL’s Proposed Amendments to the Claims Procedure For Plans Providing Disability Benefits

    December 8, 2015

    Authors

    benefitsbclp

    DOL’s Proposed Amendments to the Claims Procedure For Plans Providing Disability Benefits

    December 8, 2015

    by: benefitsbclp

    Recently, the DOL released proposed amendments to the current procedural rules for employees claiming disability benefits under an ERISA plan. The proposed rules enhance existing procedures, mirror the procedural protections for claimants contained in the PHS 2719 Final Rule, and update the ERISA claims procedures (set forth in ERISA Section 503) to align with these standards.

    Summaries of the major provisions follow:

    • Independence and Impartiality – avoiding conflicts of interest. All claims must be adjudicated in a manner which ensures that the persons making the decision are independent and impartial. The proposed rules specify that this independence and impartiality requirement mandates that decisions involving the hiring, compensation, termination, promotion, or similar matters of individuals making claims-related decisions, such as a claims adjudicator or medical experts, cannot be made based on the likelihood that the individual will support the denial of disability benefits.
    •  Enhanced
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