PLANSPONSOR - September/October 2024 - 6

RULES & REGULATIONS
... federal court districts and appellate court
circuits have issued differing decisions as to
whether a retirement plan's fiduciary or its
participants bear the burden of proving that
the fiduciary's actions caused the plan losses.
Tyson Foods Defeats Lawsuit
A federal judge in the U.S. District Court
for the Western District of Arkansas
dismissed a lawsuit filed against Tyson
Foods Inc. that had accused the company
of overcharging participants for recordkeeping
fees.
In Ruebel v. Tyson Foods Inc., filed
three employees
in December
2023,
alleged that the amount the Tyson 401(k)
plan charged its participants for account
management auditing and other basic
recordkeeping tasks-aka " bundled RKA
[recordkeeping administrative] fees " -was
" unreasonably high " when compared with
fees that similar retirement plans charged
their participants for the same services.
In a motion to dismiss the case, Tyson
argued that the plans listed by the plaintiffs
in their amended complaint as comparable
were actually not similar to Tyson's-
neither as to bundled RKA services nor to
plan size. Tyson further argued that the
plaintiffs were well aware that the fees of
the plan's recordkeeper, Northwest Plan
Services, included more services than those
provided by the other plans' recordkeepers.
U.S. District Judge Timothy L. Brooks
wrote in his ruling that the plaintiffs had
admitted to this effect. Also, Brooks wrote,
the case must be dismissed because the
comparator plans were not similar enough
to Tyson's in terms of asset size to allow for
meaningful comparisons. Even though the
U.S. 8th Circuit Court of Appeals has not
explicitly defined what " similarly sized "
plans mean, Brooks disagreed with the
plaintiffs' argument that a plan can be
similar to another if the two have roughly
the same number of participants.
Ultimately, Brooks ruled that the
plaintiffs needed to have provided a
meaningful benchmark of comparison,
6 PLANSPONSOR.COM September - October 2024
not just allege that costs were too high or
returns were too low.
DOL Revamps Federal
Benefits Website
The Department of Labor and the General
Services Administration announced that
they will launch a revamped federal benefits
website in September. The contents
of Benefits.gov, including information on
Social Security, Medicare, education loans
and disaster relief, will move to USA.gov
and USAGov en Español (USA.gov/es) for
Spanish speakers. The redesigned USA
.gov will provide: one location for benefits
information; USA.gov Benefit Finder for
users to look up programs and determine
eligibility; and category-based navigation
that organizes benefits information by
specific types.
DOL Launches Online Filing
System for Abandoned Plans
The Department of Labor unveiled an
online system by which qualified plan
termination administrators can " more
efficiently " submit information for individual
account retirement plans, such as
401(k) plans, that have been abandoned.
The DOL's Employee Benefits Security
Administration notes that the new system
will help administrators meet requirements
under its Abandoned Plan Program.
That program enables benefit distributions
to be made to participants and beneficiaries
of plans that stop operating when the
sponsoring company ceases to exist or the
small-business owner dies. EBSA extended
the program this year to companies in
Chapter 7 bankruptcy, as of July 16.
IRS Finalizes RMD Rule
The IRS has published final regulations
clarifying, in part, how a new 10-year
rule regarding the withdrawal and eligibility
requirements for inherited retirement
assets will be implemented in 2025.
The Setting Every Community Up for
Retirement Enhancement Act of 2019
required that certain beneficiaries of a
deceased plan participant or individual
retirement account owner must draw
down that person's assets within 10 years
of receiving those assets-vs. over the
recipient's " applicable " life expectancy.
The
regulation
distinguishes
between instances in which a participant
dies before beginning to take required
minimum distributions and dies after
beginning them. It also differentiates
between eligible designated beneficiaries
and designated beneficiaries. The former,
for whom the 10-year rule is not mandatory,
are the participant's spouse or minor
child, someone disabled or chronically ill
or another beneficiary " not more than 10
years younger, " such as a younger sibling;
the latter refers to someone who fits none
of those descriptions.
The 10-year rule is mandatory for noneligible-i.e.,
non-spouse-beneficiaries,
often adult children of the participant.
When the participant has begun
beneficiary must
taking RMDs,
the
take them " at least as rapidly. " Assets
remaining at the end of 10 years will be
forced out.
If the participant had not taken an
RMD, then the non-eligible beneficiary
does not need to take them and may
choose to simply withdraw the entire
balance at the end of 10 years. -PS
For in-depth coverage of these topics and more, go to PLANSPONSOR.com/compliance.
http://www.Benefits.gov http://www.USA.gov http://www.USA.gov/es http://www.USA.gov http://www.PLANSPONSOR.com/compliance http://www.PLANSPONSOR.COM
PLANSPONSOR - September/October 2024

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