A recent case before the Fifth Circuit Court of
Appeals
1 determined that a Project Completion
Incentive applying to employees on a construction project
(the Plan ) was not governed by the Employee Retirement
Income Security Act of 1974 ( ERISA ).
2
Former laborer Employees of the construction manager Employer
filed a lawsuit in Louisiana State Court asserting that the
Employer was required to pay them the Project Completion
Incentive under the Plan for the time spent on the
project-despite conceding that they quit the project before
completion and were therefore not eligible for the incentive under
the Plan terms.
3 The Employees asserted that the
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Employers and retirement plan services providers have had a year
to mull over their options since the Setting Every Community Up for
Retirement Enhancement (SECURE) Act of 2019 paved the way for the
launch of pooled employer plans (PEPs). For small businesses, these
new plans may fundamentally change the quality of and access to
retirement plans. The promise of PEPs is that by facilitating the
pooling of administrative expenses among multiple employers, each
employer benefits from economies of scale.
Provider enthusiasm
A company that manages the PEP is known as the pooled plan
self
There are almost 600,000 U.S. 401(k) plans. These plans
collectively cover more than 100 million participants. They have
nearly $6 trillion in assets. Two principal laws governing
these plans, the Internal Revenue Code (the Code ) and
the Employee Retirement Income Security Act (ERISA), set out a
series of rules that are mind-numbingly complex. In or about 2007,
a plaintiff class action law firm sued a dozen very large 401(k)
plans of name-brand employers generally alleging plan
mismanagement. What started as a trickle of lawsuits
morphed into a torrent in the years that followed, and there is no
sign of the trend abating. Plan sponsors have responded by focusing
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On January 21, 2021, the United States District Court for the
Northern District of California granted a motion by the Intel
Corporation Investment Policy Committee to dismiss all ERISA claims
brought against it by two plan participants representing a class of
participants. The plaintiffs alleged, among other things, that the
Committee acted imprudently by including private equity, hedge
funds and commodities in a custom target date investment option in
Intel s 401(k) plan. The case was
Anderson v. Intel Corp. Inv. Policy
Comm., Case No. 19-CV-04618-LHK. Plaintiffs alleged
President Biden signed the American Rescue Plan Act of 2021 ("ARPA") into law on March 11, 2021. Among its provisions that seek to provide relief to individuals affected by the COVID-19 pandemic.