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
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:
Seyfarth Synopsis: On August 19, 2024, the IRS issued Notice 2024-63 (the “Notice”) providing guidance for plan sponsors that wish to provide matching contributions based on eligible student loan repayments made by participants, rather than based only on elective deferrals, pursuant to the SECURE 2.0 Act of 2022. This post summarizes guidance under the Notice.
Section 110 of the SECURE 2.0 Act of 2022 codified rules that permitted plan sponsors to make a matching contribution to a 401(k), 403(b), SIMPLE or governmental 457(b) plan based on a participant’s “qualified student loan payment,” in addition to matching contributions on a participant’s elective deferral contribution to the plan. These rules already took effect this year, and the IRS has now issued welcome guidance on how this provision should be implemented.Continue Reading Major SECURE 2.0 Guidance Issued: Extra Credit for Repaying Qualified Student Loans
In this episode, Richard and Sarah are joined by Ian Morrison, a Partner in Seyfarth’s ERISA Litigation group to delve into a new line of cases alleging that forfeitures are plan assets, and must be used to benefit plan participants. The plaintiffs in these cases are claiming that using forfeitures to offset employer contributions
Seyfarth Synopsis: Under Section 604 of Secure 2.0, sponsors of 401(k), 403(b) and eligible governmental plans may allow employees to designate employer match (including match on student loan repayments) or nonelective contributions as Roth after-tax contributions at the time they are made. This provision was effective for contributions made after December 29, 2022 (i.e., the date Secure 2.0 was enacted). Since the issuance of Secure 2.0, a number of questions relating to this optional provision have been lingering. As previously reported here, on December 20, 2023, the IRS issued Notice 2024-2 (the “Notice”) providing guidance on several provisions under Secure 2.0, including Section 604. A brief overview of the guidance issued relating to designated Roth employer contributions is provided below.
No. The Notice clarifies – as we expected – that plans may, but are not required to allow participants to designate employer matching and/or nonelective contributions as Roth. This is the case even if the plan allows employees to make Roth employee contributions.Continue Reading “SECURE-ing” the Answers to Outstanding Questions on the Rothification of Employer Contributions
On November 24, 2023, the IRS issued highly anticipated proposed regulations concerning the provisions under SECURE and SECURE 2.0, requiring 401(k) plans to expand deferral eligibility for long-term part-time employees. The proposed rules answer a number of burning questions that have been lingering since 2019 when SECURE was first enacted. In this special episode, Seyfarth
Earlier this year, the Biden-Harris Administration took a firm stance against ‘junk insurance’ by introducing regulations aimed at impacting short-term limited duration insurance policies, independent non-coordinated coverage, and level funded plan arrangements. In this episode, our guests Diane Dygert and Benjamin Conley provide insights on these proposed regulations, addressing employee comprehension gaps, coverage notifications, and
On October 31, 2023, the Department of Labor (“DOL”) issued its latest attempt at revising the rules regarding when investment professionals who provide “investment advice” to employee benefit plans or plan participants are a fiduciary under the Employee Retirement Income Security Act of 1974 (“ERISA”). This proposed rule represents the most recent bid by the
Enacted in December 2022, the SECURE 2.0 Act contains over 90 provisions that impact qualified retirement plans. Notably, SECURE 2.0 mandates the adoption of auto-enrollment features for plans established after its enactment. Grab your cup of coffee and tune in to hear Richard and Sarah chat with Matthew Calloway from Mercer, about the effects that