PLANSPONSOR - February/March 2019 - 12

Rules & Regulations
settlement agreement, for a period of three
years. The settlement agreement says the
defendants do not admit any liability in
the action, including that any of their prior
or existing practices violate any federal or
state laws, statutes or regulations.
FAQ for Adopting
A Preapproved Plan
The IRS has updated its Preapproved
Retirement Plan Adopting Employers
FAQ [frequently asked questions]. The
web page provides information for plan
sponsors that use individually designed
retirement plan documents but want to
adopt a preapproved prototype or volume
submitter plan document. The IRS says
April 30, 2020, is the deadline to adopt
a preapproved defined benefit (DB) plan
restated for items on the 2012 Cumulative
List of Changes in Plan Qualification
Requirements. April 30, 2017, was the
extended deadline to adopt a preapproved
defined contribution (DC) plan restated
for items on the 2010 Cumulative List.
Lawmakers Seek
Cybersecurity Answers
Senator Patty Murray, D-Washington,
ranking member of the Senate Health,
Education, Labor and Pensions (HELP)
Committee, and Representative Bobby
Scott, D-Virginia, chairman of the House
Committee on Education and Labor,
wrote to the Government Accountability
Office (GAO) asking it to examine the
cybersecurity of the retirement system.
Their letter identifies 10 questions
they would like the GAO to answer,
following its examination.
" Retirement savings held in defined
contribution [DC] plans, such as 401(k)
plans, have grown steadily in recent
years, reaching over $5 trillion in 2017, "
wrote the two lawmakers. " They are a
tempting target for criminals who could
hack into plans and individuals' accounts
to access information, commit identity
fraud and steal retirement savers' nest
eggs. It is important that workers and
retirees know their savings are safe
and that a cyberattack will not throw
the retirement they have spent years
working and planning for into jeopardy. "
(Also see Inside Angle, page 63.)
" They are a
tempting target
for criminals
who could hack
into plans and
individuals'
accounts to access
information .... "
USC Fails to Win
Supreme Court Review
The U.S. Supreme Court has denied the
University of Southern California (USC)'s
petition to have the high court determine
whether participants who filed a lawsuit
challenging the management of the
university's two Employee Retirement
Income Security Act (ERISA) retirement
plans should be compelled to arbitrate
their claims.
The plaintiffs in the case had been
required to sign arbitration agreements as
part of their employment contracts. The
agreements stated that these employees
could arbitrate claims brought on their
own behalf. Denying a motion to compel
arbitration, the 9th U.S. Circuit Court of
Appeals concluded that the dispute fell
outside the scope of the arbitration agreements
because the claims were brought
on behalf of the ERISA plans, not the
individuals. With the Supreme Court's
refusal to review the case, participants
may proceed with their lawsuit.
Student Loan Repayments
Senators John Thune, R-South Dakota,
and Mark Warner, D-Virginia, have
introduced the Employer Participation
in Repayment Act, which would permit
employers to contribute up to $5,250
tax-free toward their employees' student
loan repayments.
The bill would expand the Employer
Education Assistance Program (EEAP),
which provides assistance for workers
seeking additional education but does
not benefit individuals who already have
incurred student loan debt. The legislation
has also been introduced in the
House by Representatives Rodney Davis,
R-Illinois, and Scott Peters, D-California,
and has support from numerous educational
organizations.
ERISA Retaliation
Complaint Dismissed
A federal district court judge has
dismissed an Employee Retirement
Income Security Act (ERISA) Section 510
retaliation complaint against the Central
States, Southeast and Southwest Areas
Pension Plan, the plan's trustees and its
executive director.
The judge explained that the defendants'
refusal to negotiate a proposal
presented by The Kroger Co. before its
employees filed a lawsuit means the
defendants' unwillingness to negotiate
after the suit was filed could not represent
improper retaliation. Current and former
employees of Kroger who are enrolled in
the pension plan allege that the defendants
neglected their duties of prudence
and loyalty by refusing to consider a third
party's offer to take on the plaintiffs'
pension liabilities and thereby preserve
their retirement benefits. They also claim
that the defendants retaliated against
them for filing a lawsuit by refusing to
negotiate about the third-party offer after
the complaint's filing. -PS
For in-depth coverage of these topics and more, go to plansponsor.com/compliance.
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