After much anticipation, the US Court of Appeals for the Fifth Circuit on Thursday confirmed its earlier decision to vacate the Department of Labor’s “fiduciary advice rule.”

The controversial rule became effective June 2017 and significantly expanded the universe of broker-dealers and other financial advisers subject to ERISA’s fiduciary standards. In March of this year, however, in Chamber of Commerce of the USA vs. US Dep’t of Labor the Fifth Circuit determined that the DOL exceeded its authority in implementing the rule and ordered its vacatur. Following the unsuccessful attempt by various parties to intervene in the litigation and expiration of the parties’ right to appeal the decision to the US Supreme Court, the Fifth Circuit gave effect to its earlier decision by issuing its mandate — officially vacating the rule.
Continue Reading Update: 5th Circuit Confirms Decision To Vacate DOL Fiduciary Rule

On August 31, the US Department of Labor proposed an 18-month extension of the full implementation of the Best Interest Contract Exemption and other related exemptions issued under the ERISA fiduciary rule.  Under existing guidance, a fiduciary may comply with the exemptions by adhering to an abbreviated set of requirements referred to as the “impartial

On March 2, the US Department of Labor (DOL) published a proposed extension (the Proposal) of the effective date of what is commonly referred to as the “fiduciary rule” or the “fiduciary advice rule” (the Rule). The Rule provides that persons who provide investment advice or recommendations for fees or other compensation with respect to

As part of a global regulatory initiative, the United States, European Union, Canada, Switzerland, Japan, Hong Kong, Singapore and Australia have all adopted, or are in the process of adopting, rules (Margin Rules) that impose mandatory variation margin requirements on non-cleared swaps and, in some cases, non-cleared security-based swaps and FX derivatives (collectively, “Covered Trades”). Starting March 1, any entity that is a financial end user (FEU) will only be able to execute a Covered Trade with a US swap dealer if it has amended its swap documentation to comply with the requirements applicable to the dealer under the Margin Rules.
Continue Reading 40 Days Left Until Compliance Date for Variation Margin Rules for Uncleared Swaps

On April 20, the US Department of Labor (DOL) published a proposal to revise portions of the definition of a “fiduciary” under the Employee Retirement Income Security Act of 1974, as amended (ERISA) in the Federal Register. Following is a summary of the proposed new rules. Please note that parts of the proposal are very detailed, and that this is only a summary.
Continue Reading DOL Proposes to Revise Definition of “Fiduciary” Under ERISA

The US Court of Appeals for the First Circuit recently delivered a potentially far-reaching decision for the private equity industry. In a case which involved a typical private equity structure, Sun Capital Partners III, LP, et al. v. New England Teamsters & Trucking Industry Pension Fund, et al., the First Circuit adopted a broad view of what constitutes a “trade or business” for purposes of determining whether a private equity fund (and its portfolio companies) is a “controlled group” that can be held jointly liable for withdrawal liability from a multiemployer pension fund where one of the fund’s portfolio companies withdraws from the fund.
Continue Reading Court Finds Private Equity Portfolio Company May Have Liability for Withdrawal by Another Portfolio Company

The US Court of Appeals for the Sixth Circuit recently affirmed a district court’s decision to grant defendant-appellee TRW Vehicle Safety Systems, Inc.’s (TRW) motion to compel arbitration, finding that TRW retirees were bound by an arbitration provision in a collective bargaining agreement (CBA) negotiated prior to their retirement. The lower court had held that plaintiffs Norman VanPamel and Thomas Slaght, former employees of TRW suing on behalf of a putative class, were required to arbitrate contract and Employee Retirement Income Security Act (ERISA) claims challenging changes TRW made to prescription drug benefits in their retiree health plans.
Continue Reading Sixth Circuit Affirms Decision to Enforce Arbitration Provision in Retiree Benefit Dispute

Co-authored by Gregory K. Brown and Ann M. Kim

Many public companies allow their employees to invest a portion of their retirement plan balances in company stock. By making a company stock fund an available investment in a 401(k) plan, employees may share the potential gains otherwise reserved for stockholders. If the stock fund is structured to meet the legal requirements of an employee stock ownership plan (an ESOP), the company can get an extra benefit—dividends paid on public company shares held by an ESOP can be deducted by the company.
Continue Reading Amendment of Public Company ESOPs may be Required

Co-authored by Christopher K. Buch.

Late last month the US Supreme Court heard oral arguments in two cases concerning same-sex marriage. The Court’s decisions are expected by the end of June and, depending on how the Court rules, the decisions could have a significant impact on employee welfare and retirement plans.

 


Continue Reading US Supreme Court’s Impending Decision on DOMA May Impact Most Employee Benefit Plans

Co-authored by Christopher K. Buch.

On January 30, the Internal Revenue Service released proposed and final regulations regarding the health insurance premium tax credit and the requirement that an employer maintain minimum essential coverage under the Affordable Care Act (ACA). The IRS is preparing to release a series of questions and answers to help individuals and entities comply with the new ACA rules.


Continue Reading IRS Releases Proposed and Final Regulations regarding Health Insurance Premium Tax Credits