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Multiemployer Plans

Cyber Liability Insurance for Employee Benefit Plans: Hackers and Malware and Phishing – Oh My!

Cyberattacks have managed to invade all walks of life, and employee benefit plans are no exception.  When a plan is attacked, the fallout can be overwhelmingly expensive and burdensome to correct.  Many plan sponsors are purchasing cyber liability insurance coverage to supplement their data security measures.  Understanding those policies – and their exclusions – is important for sponsors who are exploring such coverage.

Tax Cuts and Jobs Act – Modified Rules for UBTI

For many years tax exempt organizations and retirement plan trusts have been permitted to avoid tax on income generated by unrelated trades or businesses they hold by netting the gains, losses, and deductions among those trades or businesses.  The Tax Cuts and Jobs Act modifies those rules, increasing the likelihood that such entities must report, and pay tax on, UBTI.

New Fees Payable by Health Plan Sponsors and Insurers

Under the Affordable Care Act (“ACA”), both health insurers and sponsors of self-funded employer health plans will be assessed a fee to fund a new Patient-Centered Outcomes Research Institute.  This fee will start at $1.00 per covered life for the first year (which is the first plan year ending on or after October 1, 2012), but will then double to $2.00 per covered life during the following year.  The first deadline for paying this fee is July 31, 2013.

THE FIDUCIARY CORNER: The Duty to Collect Delinquent Contributions

In a Field Assistance Bulletin issued February 1, 2008 (FAB 2008-01), the Department of Labor highlighted a problem that apparently is pervasive in retirement plan and trust documents: confusion over the responsibility to collect delinquent contributions. Recent DOL investigations uncovered plan and trust documents that neglected to assign responsibility for monitoring and collecting contributions, and some that even purported to relieve all of the plan’s fiduciaries from this responsibility. This guidance cautions that plan fiduciaries who ignore delinquent contributions do so at their own peril. Employers should review their documents carefully in light of this Bulletin, to make sure that these responsibilities are properly assigned.

THE FIDUCIARY CORNER: Fiduciary Liability for Delinquent Contributions

Failing to make required contributions to a multiemployer benefit plan can become a matter of fiduciary liability in some circumstances. And according to a federal court in Connecticut, that liability attaches personally to company executives who control the corporate checkbook. (Trustees of Connecticut Pipe Trades Local 777 Health Fund v. Nettleton Mechanical Contractors, Inc. (March 15, 2007)). 

The Clock Is Ticking: Prepare Now for New Multiemployer Plan Funding Rules

The Pension Protection Act of 2006 (‘PPA’) contains dozens of changes to multiemployer pension plan funding standards, most of which are effective for plan years beginning in 2008. Many of these provisions are applicable to all multiemployer plans, but Congress also included important relief for the construction industry. Employers, unions, and trustees of multiemployer plans should begin preparing now to meet the new standards.

New Funding Notice Required For Multiemployer Pension Plans

In January, the Department of Labor (“DOL”) finalized regulations intended to increase understanding on the part of multiemployer plan participants and beneficiaries of the funding status of their defined benefit pension plans. Issued under the Pension Funding Equity Act of 2004, the new rules require multiemployer plans to provide an annual “funding notice” with respect to all plan years beginning after December 31, 2004.

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