Caitlin M. Britos, Author at Spotlight on Benefits

Multiemployer Pension Plan Alert: Evergreen Clauses May Trump the Bargaining Parties’ Subsequent Agreement

The U.S. Court of Appeals for the Seventh Circuit recently ruled that Central States, Southeast and Southwest Areas Pension Fund may continue its lawsuit against Transervice Logistics, Inc. and Zenith Logistics, Inc. seeking allegedly outstanding pension fund contributions. The case examined two consolidated appeals, each involving a nearly identical collective bargaining agreement (CBA) between each employer and a union, and trust agreements between each employer and the plaintiff fund. The court was asked to determine whether the employers were required to maintain contributions to a multiemployer pension plan pursuant to so-called “evergreen clauses” that renewed the CBAs each year unless timely terminated.

Factual Background

The CBAs obligated the employers to make pension fund contributions to plaintiff, making the fund a third-party beneficiary of the agreements. The trust agreements obligated the employers to contribute to the fund for the “entire term of any collective bargaining agreement… (including any extension of a collective bargaining agreement through an evergreen clause…).” The CBAs were set to expire on January 31, 2019 but contained evergreen clauses that renewed the CBAs each year unless terminated with 60 days’ notice.

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ERISA Litigation Roundup: Judge Permits Partial Jury Trial in Eversource Energy 401(k) Dispute

In an unusual decision, a federal judge last month refused to strike a plaintiff class’ demand for a jury trial in an ERISA 401(k) class action.

In Garthwait v. Eversource Energy Co., a class of former and current participants in the Eversource 401(k) Plan (the Plan) filed an action against Eversource Energy Company and Plan fiduciaries seeking to recover plan losses caused by alleged breaches of fiduciary duty and requesting other equitable or remedial relief.

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EEOC Disavows Former General Counsel’s Letter on Abortion Travel Benefits

We understand a former general counsel of the Equal Employment Opportunity Commission (EEOC or Commission), Sharon Fast Gustafson, recently sent a form letter to various employers alleging that providing abortion-related travel benefits to their employees could result in unlawful discrimination. Specifically, Gustafson’s letter avers that offering abortion travel benefits without also offering travel benefits for other health conditions may constitute several types of discrimination, including pregnancy and childbirth discrimination under Title VII of the Civil Rights Act of 1964, disability discrimination under the Americans with Disabilities Act and religious discrimination.

The letter does not actually threaten any litigation and appears designed to advance Gustafson’s personal agenda. However, recipients may be concerned that Gustafson’s views could be conflated with those of the EEOC, since the letter’s opening paragraph describes Gustafson as a “recent General Counsel of the Equal Employment Opportunity Commission (EEOC) with 31 years of experience practicing primarily employment law.”

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IRS Extends Temporary Relief from “Physical Presence” Requirement Through December 31, 2022

The IRS recently issued Notice 2022-27, providing a six-month extension of the temporary relief from the physical presence requirement for certain plan elections (including spousal consents) required to be witnessed by a plan representative or notary public. Issued in response to the COVID-19 pandemic, the IRS provided initial relief from the physical presence requirement for the period January 1through December 1, 2020, provided initial extended relief through June 30, 2021, and extended relief for a second time through June 30, 2022. Most recently, Notice 2022-27 extends the relief through December 31, 2022.

The temporary relief from the physical presence requirement applies to any participant election witnessed by a notary public of a state that permits remote electronic notarization or by a plan representative, if certain requirements are satisfied. We discussed those requirements in a prior blog post on this topic.

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IRS Pilots Pre-Examination Compliance Program for Retirement Plans

In its recent June Employee Plans newsletter, the Internal Revenue Service (IRS) announced the launch of a 90-day pre-examination compliance pilot program. Under the program, the IRS will notify a plan sponsor that its retirement plan has been selected for pre-examination. The notification will provide the sponsor with 90 days to review retirement plan documents and operations to determine compliance with current tax law. If the sponsor does not respond within 90 days, the IRS will contact the sponsor to schedule an examination.

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