Pension News - What's New in 2012?
The following list tracks important guidance that has been released since January 1, 2012. This page was last updated on May 15, 2012.. These items are summarized in detail, with appropriate commentary, in our quarterly newsletter, eRISA Update. See our Newsletters page to sign up for eRISA Update. Legislative Developments
Treasury Regulations
- Proposed regulations would amend minimum distribution regulations to allow for deferred longevity annuities starting no later than age 85 payable from up to 25% of account balance [Citation: Prop. Treas. Reg. §§1.401(a)(9)-5, Q&A-3(d) and (e), 1.401(a)(9)-6, Q&A-17, 1.403(b)-6(e)(9), 1.408-8, Q&A-12, 1.408A-6, Q&A-14(d), and 1.6047-2, 77 F.R. 5443 (February 3, 2012)]
- Proposed regulations would make it simpler for defined benefit plan to offer a payment option consisting of a partial annuity with lump sum remainder [Citation: Prop. Treas. Reg. §1.417(e)-1(d)(7), 77 F.R. 5454 (February 3, 2012)]
IRS Guidance
- Annual update of user fee procedure for 2012 [Citation: Rev. Proc. 2012-8, 2012-1 I.R.B. (January 3, 2012)]
- Annual update of determination letter procedure for 2012 [Citation: Rev. Proc. 2012-6, 2012-1 I.R.B. (January 3, 2012)]
- Expansion of relief under Rev. Rul. 2011-1 for certain trusts containing ERISA §1022(i)(1) plan investments and extended amendment deadline for governmental retiree benefit plans [Citation: Notice 2012-6, 2012-3 I.R.B. (January 16, 2012)]
- IRS provides FAQ guidance on the SSA statement required to be furnished to affected participants [Citation: FAQs Regarding Form 8955-SSA http://www.irs.gov/retirement/article/0,,id=252298,00.html]
- IRS makes it easier for a defined contribution plan to offer deferred annuity options without immediately triggering the QJSA spousal consent rules [Citation: Rev. Rul. 2012-3, 2012-8 I.R.B. (February 21, 2012)
- IRS clarifies how the vesting rules and IRC §415 limits apply to the annuitization of a direct rollover from a defined contribution plan to a defined benefit plan maintained by the same employer [Citation: Rev. Rul. 2012-4, 2012-8 I.R.B. (February 21, 2012)]]
- HSA limits for 2013 are as follows: (1) annual contribution limit is $3,250 for self-onoy coverage and $6,450 for family coverage, (2) the minimum annual deductibnle under a high deductible plan must be no less than $1,250 for self-only coverage, and no less than $2,500 for family coverage, and (3) the maximum annual out-of-pocket expenses under a high deductible plan must not exceed $6,250 for self-only coverage and not exceed $12,500 for family coverage.
- IRS will delay normal retirement age regulations for governmental pension plans; considering special normal retirement age rules for governmental plans [Citation: Notice 2012-29, 2012-18 I.R.B. (April 30, 2012), http://www.irs.gov/irb/2012-18_IRB/ar12.html]
- IRS posts links for resolving nonamenders of pre-approved plans that missed the April 30, 2010, or April 30, 2012, deadline [Citation: Correcting Plan Errors - VCP Submission Kits for Pre-Approved Plans, http://www.irs.gov/retirement/article/0,,id=257274,00.html]
IRS Private Letter Rulings/IRS Internal Communications
DOL Regulations
- Delayed affective date for service provider fee disclosure requirements also delays the effect of the extension of the transition rule for initial disclosures required under the participant fee disclosure regulations [Citation: DOL Reg. §2550.404a-5(j)(3)(i), 76 F.R. 42539 (July 19, 2011), analyzed in conjunction with DOL Reg. §2550.408b-2(c), 77 F.R. 5632 (February 3, 2012)]
- Regulations imposing disclosure requirements on service providers in order to qualify for the statutory exemption under ERISA §408(b)(2) are issued in final form, with some clarifications, delayed effective date, and deferral of any requirement to provide summary or “road map” [Citation: DOL Reg. §2550.408b-2(c), 77 F.R. 5632 (February 3, 2012)]
DOL Formal Guidance/Prohibited Transaction Exemptions
PBGC regulations and other guidance
EBSA Advisory Opinions, Field Assistance Bulletins and other informal guidance
ERISA Litigation
- Causation of loss due to failure to review investment strategy must be shown before recovery against fiduciary is warranted [Citation: Plasterers’ Local Union No. 96 Pension Plan v. Pepper, 663 F.3d 210 (4th Cir. December 1, 2011)]
- Spinoff did not violate ERISA §510 because it was not motivated by desire to interfere with ERISA benefits [Citation: Nauman v. Abbott Laboratories, 669 F.3d 854 (7th Cir. February 3, 2012)]
- Individualized monetary damages for affected plans precludes certification under Rule 23(b)(2) [Citation: Nationwide Life Insurance Company v. Haddock, 52 EBC 11613 (2nd Cir. February 6, 2012)]
- “First” wife entitled to survivor annuity rather than “second” wife if first marriage was never dissolved [Citation: IBEW Pacific Coast Pension Fund v. Lee, 52 EBC 2378 (6th Cir. February 13, 2012)]
- Moench presumption not applicable during motion to dismiss stage; 404(c) not defense to duty to select prudent investment menu [Citation: Pfeil v. State Street Bank and Trust Company, 671 F.3d 585 (6th Cir. February 22, 2012]
- Plaintiffs failed to meet post-Amara standard for equitable relief to avoid summary judgment [Citation: Skinner v. Northrop Grumman Retirement Plan, 673 F.3d 1162 (9th Cir. March 16, 2012)]
- Sovereign immunity does not apply to USERRA cases brought against a State; money damages awarded to servicemember for improper failure to rehire [Citation: U.S. v. Alabama Department of Mental Health and Mental Retardation, 2012 WL 877222, ___ F.3d. ___ (11th Cir. March 16, 2012)]
- Estate may attempt to enforce surviving spouse’s waiver of interest in retirement benefits after benefits have been distributed from the plan [Citation: Estate of Kensinger v. URL Pharma, Inc., 674 F.3d 131 (3rd Cir. March 20, 2012)]
- Amendment to modify social security offset calculation was not a reduction of accrued benefits in violation of ERISA §204(g) [Citation: Cinotto v. Delta Airlines, Inc., 674 F.3d 1285 (11th Cir. March 23, 2012)]
- Fiduciaries breached duties to 401(k) plan by failing to monitor recordkeeping costs, failing to negotiate rebates on revenue sharing, selecting investments with higher expense ratios, allowing plan to pay excessive fees to subsidize corporate services, and failing to transfer float income to plan [Citation: Tussey v. ABB, Inc., ___ F.3d ___ (52 EBC 2826) (W.D.Mo. March 31, 2012)]
- Moench presumption applied during pleading stage; fiduciaries under no obligation to provide plan participants non-public information that could pertain to the employer securities investment option in the plan; false or misleading statements in SEC filings do not constitute ERISA breaches [Citation: Fisher v. JP Morgan Chase & Co., 2012 WestLaw 1592208 (2nd Cir. May 8, 2012) (not selected for publication in the Federal Reporter)]
- Eleventh Circuit adopts Moench presumption with respect to fiduciary’s decision to invest in Home Depot stock; fiduciaries not required to disclose non-public information to plan participants [Citation: Lanfear v. Home Depot, Inc., ___ F.3d ___ (2012 WL 1580614) (11th Cir. May 8, 2012)]
Miscellaneous Guidance
- Puerto Rico Treasury Department issues guidance on new rules relating to determination letters, retroactive qualification procedures [Citation: Circular Letter No. 11-10, Puerto Rico Treasury Dept]
- Application of NASD Rules 2210 and 2211 to participant-level fee disclosure information provided pursuant to DOL Reg. §2550.404a-5 [Citation: FINRA Regulatory Notice 12-02, http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p125393.pdf]
|
 |
