Topic: Retirement Plans

The economic uncertainty of the COVID-19 pandemic has forced many employers to furlough or layoff a significant percentage of their workforce.  These workforce reductions may inadvertently cause a “partial termination” of the employer’s qualified retirement plan triggering a requirement that all affected participants become 100% vested in their plan accounts.

We are now a few months into 2020 and we should all be feeling more SECURE in our ‎retirement, as a result of the “Setting Every Community Up for Retirement Enhancement Act of ‎‎2019” (“SECURE Act”). Below is a brief summary of the key changes that could impact ‎qualified retirement plans, depending on the terms of those plans and the desires of the plan ‎sponsors from a design perspective.‎

A recent Chief Counsel Memorandum (“CCM”) makes clear that a qualified retirement plan can ‎face disqualification if the plan sponsor cannot provide a copy of an executed plan document or ‎plan amendment upon audit.

The United States Supreme Court, in a per curiam decision, declined to address whether plan ‎participants sufficiently alleged breach of fiduciary duty claims under the Employee Retirement ‎Income Security Act of 1974, as amended (“ERISA”) against fiduciaries of an employee stock ‎ownership plan for failing to disclose inside information that ultimately led to a declining stock ‎value, remanding the case to the Court of Appeals for the Second Circuit.‎