Tip of the Day: Retirement plans may be affected by TARP

I got another one for you to take to your legal eagles. According to a blog alert from Winston & Strawn, the Treasury Department will participate in a Public-Private Investment Program to buy up "legacy securities" (a much kinder, gentler term for "toxic assets").

If all goes right, fund managers will create a private investment vehicle with funds raised from private investors. So how do retirement plans fit in?

According to W&S, "This likely means that ERISA 'benefit plan investors' should be limited to 25% of any investment fund. Some managers may be willing to comply with the ERISA restrictions, in which case, assuming the structures can also be vetted for ERISA compliance, their investment fund could accept more than 25% of its investments from benefit plan investors."

I know the "ERISA compliance" part perked you up, so get your legal folks on it and comment back with your thoughts.

Tip of the Day: Put it in writing

As financial and litigation fears both have employers on edge, an EBN report this month offers employers three letters to help protect themselves when making benefits changes/reductions: S, P, D.

Benefit analysts urge employers to become strict adherents to ERISA rules on summary plan descriptions and summaries of material modifications, because the practice will not only help them to avoid costly litigation, but also broaden their opportunities to better educate workers about their benefits.

Putting any changes -- no matter how small -- in writing is key because "at the end of day, the issue as to whether the modification was material will get resolved in a courtroom where a plan participant says, 'No one told me that the company changed X benefit,'" obxerves Robert Fisher, a partner at Foley Hoag, LLP, a law firm based in Boston.

Tip of the Day: Mark your ERISA compliance calendar

Here at EBN, deadlines are sacrosanct; so should it be for retirement plan sponsors. Click here for a 2009 list of ERISA compliance dates/deadlines. As experts predict ERISA lawsuits to rise this year, make sure you cross every T and dot every I.

Tip of the Day: Lawyer up

If 2008's figures on ERISA and FLSA lawsuits are any indication, employers can expect even more legal filings this year, as employees continue to lose their jobs in the economic recession, predicts international law firm Seyfarth Shaw.

According the 5th Annual Workplace Class Action Litigation Report compiled by Seyfarth Shaw, the top 10 ERISA class action settlements entered into or paid in 2008 totaled $17.7 billion, up from the $1.818 billion settlement tally of the previous year.

The firm attributed the exponential increase to more "stock drop suits," where the retirement plan participants challenge the perceived lack of employer stock as an investment option, and "plan administration" suits challenging excessive advisory fees and other mechanics of the plan. Click here to learn about other key findings from the report.

Related EBN coverage:
DOL finalizes civil penalties against plan sponsors

Tip of the Day

Is your retirement plan ERISA 404(a) and 404(c) compliant? I couldn’t tell you, but EBN contributor Phil Fogli can.

Tip of the Day

The Department of Labor just made it easier for workers and plan administrators to access actuarial data on pension plans. It created an online feature, "ERISA Public Disclosure System." Read more about what it is and how it works at ebn.BenefitNews.com.

News You Can Use: Retiree medical and ERISA updates

Proskauer Rose LLP has issued two recent client briefings about new legal developments.

Click the links for more information:

• Ninth Circuit Concludes That San Francisco's "Pay or Play" Ordinance Is Not Preempted By ERISA
• MetLife v. Glenn: Supreme Court Struggles to Determine Judicial Standard of Review for Benefit Determinations Made by "Dual Role" Administrators