Address

NYC Bar Association
42 W 44th Street
New York, NY 10036

REGISTER HERE

Seyfarth is proud to serve as a Gold sponsor of the International Employment Lawyer (IEL) Executive Compensation & Benefits Summit, taking place May 27, 2025, in New York City. This prestigious global event brings together leading legal and HR professionals to explore the evolving landscape of executive pay, incentive design, and cross-border benefits strategy.

As part of the day’s programming, Seyfarth Employee Benefits & Executive Compensation partner Alan Wilmit will serve as a featured panelist on the session titled “Changing Governments and Their Impact on Executive Pay Structures.” This timely discussion will examine how political transitions, regulatory reform, and shifting public sentiment are influencing compensation policies in the US and around the world.

Alan brings deep experience advising multinational employers on the tax, governance, and disclosure implications of executive pay—particularly in periods of policy uncertainty. He will join a panel of international experts offering comparative insights and best practices for navigating political change in both mature and emerging markets.

To learn more about the summit, visit the International Employment Lawyer website.

Seyfarth Synopsis: Arkansas has become the first state in the nation to enact legislation, effective starting in 2026, prohibiting pharmacy benefit managers (PBMs) from owning or operating actual pharmacies within the state. We take a look at what that may mean for employers sponsoring health plans with pharmacy benefits in the state.

Background on PBMs Role in the Marketplace

PBMs have become a unifying scapegoat in the escalating concern about the cost of prescription drug coverage in the country. So, it becomes important to understand what role they really play. PBMs act as a middle man of sorts for the prescription drug coverage offered by many employer health benefit plans. With the ever-expanding universe of prescription drugs, including the many specialty drugs that are being offered and widely advertised to the public, it is difficult for plan sponsors to be able to directly manage this benefit. PBMs grew up as an answer to the needs for a third party to administer drug coverage under plans. 

Continue Reading Cutting Out the Middle Man

Seyfarth Synopsis: In a unanimous decision reversing dismissal of prohibited transaction claims based on fees paid to defined contribution plan recordkeepers, the Supreme Court held that ERISA’s prohibited transaction exemptions are affirmative defenses, and do not present additional pleading elements plaintiffs must satisfy to state viable claims. While acknowledging the decision may allow plaintiffs to survive dismissal with “barebones” allegations, the Court held that the practical concerns of an increase in meritless litigation cannot overcome the statutory text and structure.

Click here to read the full Legal Update.

Two courts. Two opposite rulings. One critical question: Do plaintiffs have standing to challenge pension risk transfers under ERISA?

In the first two decisions to address Article III standing in this rising wave of class actions, federal courts in Maryland and D.C. have landed on opposing sides. One case will head to discovery; the other was dismissed outright. At stake is whether moving pension obligations from plans to insurers — a common de-risking strategy — gives rise to real legal injury.

The outcomes hint at what could become a growing divide in how courts assess harm, risk, and fiduciary duties in the pension risk transfer space. And with many more motions pending, these early rulings set the tone for what’s to come.

Click here to read our Legal Update and dive into the details of these pivotal cases and what they mean for plan sponsors, fiduciaries, and the future of de-risking litigation.

In this episode, we’re joined by Ameena Majid, Seyfarth’s Impact & Sustainability Partner, to explore the intricacies of ESG (Environmental, Social, and Governance) investing. Ameena explains the core principles of ESG, why it has become a priority for companies, and the different types of ESG investing. We also discuss how corporate ESG goals influence 401(k) and pension plan investments, the regulatory landscape, and potential legal hurdles. Grab your cup of coffee and tune in to hear
Ameena share her expertise on navigating the evolving
ESG legal landscape.

Click here to listen to the full episode.

Browse Episodes | Follow on Soundcloud | Follow on Apple Podcasts │Follow on Spotify

Seyfarth Synopsis: On January 17, 2025, the U.S. Departments of Treasury, Labor and Health and Human Services (the “Agencies”) released its annual report to Congress assessing compliance with statutory mental health parity requirements under the Mental Health Parity and Addiction Equity Act (“MHPAEA”). On the same day, a federal lawsuit was filed against the Agencies challenging the recently published final rule governing MHPAEA compliance (the “Final Rule”).

Each year since the passage of the Consolidated Appropriations Act, 2021, the Agencies have published a report to Congress detailing widespread noncompliance with the MHPAEA rules governing non-quantitative treatment limitations (“NQTLs”), providing examples of problematic NQTLs, and outlining related corrective actions enforced by the Agencies. This year was no different. In January, the Agencies’ annual report to Congress identified common NQTLs and how to address them, focusing primarily on certain key priority areas such as mental health and substance use disorder benefit exclusions, prior authorization requirements, and network composition issues. For example:

Continue Reading Federal Lawsuit and Tri-Agency Report Shake Up Mental Health Parity

Seyfarth Synopsis: The DOL updated its voluntary fiduciary correction program (“VFCP”) which was introduced over 20 years ago to allow plan sponsors to corrected enumerated fiduciary breaches. The amended VFCP now allows for self-correction of the failure to timely remit contributions and loan repayments withheld from participants’ salary to the plan.

The prior VFCP required the administrator to make a formal submission to the DOL, along with full correction of the delinquency (i.e., remittance of all contributions and loan repayments withheld from participants’ salary, adjusted for “missed” earnings, in order to receive a “no action letter” under which the DOL would agree not to assert a fiduciary breach. Additionally, if other requirements are met, the DOL would not assert a prohibited transaction (PT) and provided for an exemption from the payment of an excise tax on such PT. 

Recognizing that making the submission to the VFCP was a time consuming and expensive proposition for sponsors, the updated VFCP now provides for a “self-correction” approach that foregoes the need to submit a formal application to the DOL. While the plan must provide notice to the DOL that it is using the self-correction approach, the DOL will provide an acknowledgement of the self-correction but, of course, does not result in the DOL issuing a no action letter.

The DOL also has expanded the self-correction approach under the VFCP to cover certain inadvertent eligible loan failures under the expanded IRS correction procedures mandated by SECURE 2.0. To use the VFCP to self-correct inadvertent loan failures, once again, notice must be given to the DOL under the new procedure.

For more information on the when the self-correction approach is available and the steps that must be taken, please see our Legal Update here

Of course, feel free to reach out to your Seyfarth employee benefits lawyer with any questions.

Seyfarth Synopsis:  Over the years, plan sponsors and administrators have wrestled with the question of what to do with the accounts of participants who left employment years earlier and cannot now be located.  Notwithstanding their best efforts, plans continue to maintain accounts of participants who are either missing or unresponsive to plan correspondence (“missing participants”). On January 14, 2025, the DOL issued Field Assistance Bulletin (FAB) 2025-01 that allows sponsors and administrators of ongoing defined contribution (DC) plans to transfer unclaimed small accounts to a state unclaimed property fund of the participant’s last known address provided the fund satisfies certain requirements.

The issue of what to do with the accounts of missing participants is an age-old question. In 2014 the DOL issued FAB 2014-01, stating that an IRA was the preferred destination for unclaimed defined contribution (DC) plan accounts. That same FAB also acknowledged that IRAs may not be available for terminating DC plans, and suggested that in certain circumstances, a state unclaimed property fund or an interest-bearing FDIC-insured bank account might also be appropriate. More recently, the DOL became concerned that IRAs may not be the sole (or even most) appropriate destination for unclaimed plan accounts, as IRAs charge fees that often exceed the investment returns of small accounts, resulting in the account being eaten away by fees. In fact, when plan sponsors started looking to IRAs as the destination of its unclaimed account balances, the sponsors found it challenging to find an IRA provider who would accept all accounts, particularly small accounts, and that the limited choices resulted in front end, back end, and/or annual fees that would quickly exhaust the account balance. From the fiduciary perspective, many plan fiduciaries were reluctant to make such transfers. As time passed, however, more IRA providers became available and fees dropped. But not necessarily to zero.

Continue Reading Missing Participants – What to do With Abandoned Accounts

Seyfarth Synopsis: New proposed regulations issued by The Department of Treasury and IRS provide guidance on the provisions related to catch-up contributions that were included under SECURE 2.0 Act of 2022 (“SECURE 2.0”).

The recently issued proposed regulations address several changes to the catch-up contribution provisions made by SECURE 2.0, including the following:

  • Section 603, which requires that catch-up contributions for certain participants be made on a Roth basis (i.e., the Roth Catch-Up Requirement); and
  • Section 109, which increased the applicable catch-up dollar limit for those who attain age 60, 61, 62 or 63 during the plan year.

The much-welcomed proposed regulations answer a number of open questions that we had been grappling with following the issuance of SECURE 2.0.

Click here to read our full Legal Update which discusses the proposed regulations, answered (and unanswered) questions addressed by the proposed rules, as well as a few administrative considerations for plan sponsors and administrators.

We encourage you to speak with your Seyfarth Shaw Employee Benefits attorney to update plan documents and participant communications and prepare for the implementation of these provisions.

Seyfarth Synopsis: On January 16, 2025, the IRS issued proposed regulations under Section 162(m) of the Internal Revenue Code of 1986 (the “Code”), which limit the amount of compensation a publicly held corporation may deduct for wages paid to its “covered employees” to $1 million per year. Section 162(m) has been amended over the years to expand the definition of a “covered employee,” which originally was limited to a corporation’s principal executive officer (“PEO”), principal financial officer (“PFO”), and its next three most highly compensated executive officers. Most recently, in 2021 the American Rescue Plan Act of 2021 (“ARPA”) amended the definition of “covered employee” to include, for tax years beginning after December 31, 2026, the corporation’s five highest compensated employees other than its PEO, its PFO and its next three most highly compensated executive officers. The proposed regulations provide guidance on determining and applying Section 162(m) to these next five most highly compensated employees.

Continue Reading How Now, High Five? IRS Issues Proposed Regulations for the Expanded Definition of “Covered Employee” Under Section 162(m) that Applies Beginning in 2027