What! You Mean I Have to Arbitrate my ERISA Claim?

While plan sponsors can add arbitration clauses to their plan documents, they aren’t necessarily inoculated from participant lawsuits. Notwithstanding the limitation, a number of plan sponsors have added these provisions to their plan documents hoping to temper plan litigation.

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Related Content

• Arbitration Clause for ERISA Retirement Plan (Summary Plan Description)
  Reference this summary plan description clause which discloses to participants that any disputes remaining unresolved by the plan's internal claim procedures are subject to mandatory arbitration.
• 6th Circuit Finds Participants Don’t Have to Arbitrate Excessive Fee Claims
  See that the Federal Circuits don’t agree on the validity of arbitration clauses in ERISA plans. Here, the clause was not in the plan but was in an employment agreement—which didn’t move the Sixth Circuit to permit that provision to operate in an excessive fee claim. Reference legislation that would effectively prohibit plan sponsors from requiring arbitration of ERISA claims. whether contained in plan documents or employment agreements.

Legal Developments

• DOL Unveils New Contractor Rule Proposal
  The U.S. Department of Labor (DOL) proposes a six-step economic realities test for determining whether a worker is an employee or an independent contractor. The proposed rule would rescind a Trump-era rule on the subject providing a different classification framework.
• IRS Extends More Retirement Plan Deadlines
  IRS Notice 2022-45 extends the plan amendment deadline for provisions of the Coronavirus Aid, Relief and Economic Security (CARES) Act (Pub. L. No. 116-136) that allowed retirement plan sponsors to offer special penalty-free distributions, set a higher plan loan cap, and suspend loan repayments for participants affected by the COVID-19 pandemic.
• DOL Proposal May Disrupt Plan Sponsor Investment Arrangements
  DOL recently proposed significant changes to the qualified professional asset manager (QPAM) prohibited transaction exemption widely used by asset managers for nearly four decades.

Practical Guidance Updates
Featuring the latest updates from your Practical Guidance account.  

• Employee Benefits & Executive Compensation Key Legal Developments Tracker
  Stay informed on new developments.
  • Retirement Plans. PGGC proposes revising withdrawal liability rule for multiemployer plans that would allow a plan actuary to choose from a range of interest rate assumptions in calculating an employer’s withdrawal liability. The proposed rule would increase withdrawal liability obligations of employers from $804 million to $2.98 billion over the next 20 years. 87 Fed. Reg. 62,316 (Oct. 14, 2022).
  • Health and Welfare Plans. The Social Security Administration announces an 8.7% cost of living adjustment beginning in 2023. Based on that increase, the maximum amount of earnings (wages) subject to the Social Security tax (taxable maximum) will increase to $160,200 from $147,000. SSA Press Release (Oct. 13, 2022).
  • Health and Welfare Plans. IRS announces certain tax inflation adjustments for tax year 2023. For example, the monthly limitation for the qualified transportation fringe benefit and the monthly limitation for qualified parking increases to $300, the dollar limitation for employee salary reductions for contributions to health FSAs increases to $3,050, and the maximum carryover of unused amounts in a health FSA increases to $610. Proc. 2022-38.
• Document alerts allow you to stay current on legal developments that affect your practice. Find out how to set up your document alerts.
• Check out the new Practical Guidance Author Center! Learn about the 1500+ leading attorney authors contributing to our 22 practice areas, and find out how you can Become a Practical Guidance Author.
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• Share the First Year Associate Resource Kit: Employee Benefits & Executive Compensation with your firm’s associates to help them sharpen their research and writing skills, get the inside scoop on associate survival, and hit the ground running. 
• The Practical Guidance Journal Fall Edition features impacts of the Dobbs v. Jackson Health Organization decision on employers, healthcare, insurance, and privacy concerns, and tracks the status of state law changes.

• New and Updated Practical Guidance Content
  • State Abortion Laws Tracker After Dobbs v. Jackson Women's Health Organization
  • ACA Nondiscrimination Rules for Health Programs and Activities (ACA Section 1557)
  • Equity Incentive Compensation Plans for Start-Ups
  • Investment Review Checklist for Investment Committee (401(k) Plan)
  • Open Enrollment Notices Checklist (Health and Welfare Plans)
  • Medicaid and Children's Health Insurance Program (CHIP) Notice

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