RETIREMENT PLAN UPDATES
Executive Order Opens Door to Alternative Assets in Defined Contribution Plans
On August 7, 2025, President Trump signed an executive order intended to remove barriers to alternative asset investments for 401(k) and other defined contribution retirement plans. The order, "Democratizing Access to Alternative Assets for 401(k) Investors" (the Order), defines "alternative assets" broadly to include private market investments (i.e., private equity), real estate, digital assets, commodities, infrastructure financing projects, and lifetime income strategies such as longevity risk sharing pools.
The Order directs the U.S. Department of Labor (DOL) to reexamine its guidance and clarify its position on alternative assets and the processes for offering them in plans under ERISA. The Order also directs the Securities and Exchange Commission to consider ways to facilitate access to alternative asset investments for defined contribution plans.
DOL Withdraws Retirement Plan Regulations After Industry Pushback
The DOL withdrew two recent direct final regulations that would have repealed longstanding guidance in response to "significant adverse comments" from industry stakeholders. One of the withdrawn rules would have eliminated the regulatory safe harbor for selecting annuity providers and contracts for defined contribution plans. The DOL also withdrew from repealing final regulations relating to ERISA plan assets and insurance company general accounts.
PBGC Rule Makes Corrections, Clarifications and Improvements
The Pension Benefit Guaranty Corporation (PBGC) issued a final rule on August 15, 2025, that makes technical corrections and clarifications to its regulations (the Final Rule). Among other changes, the Final Rule:
- Extends the period for terminating plans to submit final premium filings to the PBGC.
- Updates the calculation of flat and variable rate PBGC premiums for cooperative and small employer charity retirement plans.
- Eliminates the requirement for terminated and insolvent multiemployer plans to submit withdrawal liability information.
- Revises the due date for single-employer plan standard termination notices.
Sixth Circuit Weighs in on Withdrawal Liability Dispute
On August 6, 2025, the U.S. Court of Appeals for the Sixth Circuit addressed a multiemployer pension plan's interest rate assumptions for calculating employer withdrawal liability. In Ace-Saginaw Paving Co. v. Operating Engineers Local 324 Pension Fund, a pension plan assessed withdrawal liability against an employer using a rate based on the PBGC's annuity interest rates. The Sixth Circuit noted that withdrawal liability valuation assumptions must be reasonable and the actuary's best estimate of the anticipated experience under the plan. In this instance, the court found that the plan's actuary failed to provide his "best estimate." The court concluded that actuaries cannot consider policy goals or fund management strategies as part of the withdrawal liability assessment process.
Second Circuit Addresses Standing Requirements to Bring Fiduciary Duty Class Actions
In Collins v. Northeast Grocery, Inc., the U.S. Court of Appeals for the Second Circuit clarified requirements for plaintiffs to bring excessive retirement plan fee lawsuits. The plaintiffs alleged that the employer plan fiduciaries failed to prudently select and monitor the plan's investment options, failed to monitor the expenses and performance of the plan recordkeeper and investment managers, and agreed to excessive revenue-sharing arrangements with service providers.
Dismissing the plaintiffs' claims for lack of standing, the court emphasized that defined contribution plan participants seeking monetary relief for alleged violations under ERISA must allege a "non‑speculative financial loss" that directly affects their individual accounts. In this case, the plaintiffs were not invested in the allegedly imprudent investment options. As such, the court found that general allegations that fiduciaries mismanaged funds or selected imprudent investments were insufficient to confer standing.
HEALTH AND WELFARE PLAN UPDATES
District Court Finds No ERISA Preemption for Arkansas PBM Regulations
On September 2, 2025, the U.S. District Court for the Northern District of Illinois ruled in Central States, Southeast and Southwest Areas Health and Welfare Fund v. McClain that ERISA does not preempt Arkansas Insurance Department Rule 128: Fair and Reasonable Pharmacy Reimbursements (Rule 128). Rule 128 includes a reporting element, which requires plans to submit certain pharmacy compensation information to the Arkansas Insurance Commissioner, and a dispensing fee element, whereby the Insurance Commissioner may require plans to pay additional costs to ensure a fair and reasonable pharmacy compensation program.
GENERAL UPDATES
DOL Announces Transition to Electronic Payments and Disbursements
The DOL announced that, effective September 30, 2025, it will no longer accept or issue paper checks. The transition to electronic payments is the result of President Trump's Executive Order 14247, "Modernizing Payments To and From America's Bank Account."
Ninth Circuit Narrows Application of Arbitration Provisions in ERISA Plans
On August 4, 2025, the U.S. Court of Appeals for the Ninth Circuit published its decision in Platt v. Sodexo, S.A., which addressed a mandatory arbitration provision in an ERISA‑governed health plan. The court held that the plan's arbitration provision was unenforceable. The court found that the plaintiff never consented to arbitration, as Sodexo did not expressly notify employees when it added the provision to the plan (the only notice was an email with a link to a new Summary Plan Description) or that continued participation in the plan constituted acceptance of the provision. The court also found the arbitration provision unenforceable because it expressly precluded the employee from bringing claims in a representative capacity on behalf of the health plan.
COMPLIANCE DEADLINES AND REMINDERS
General Compliance
- Form 5500 for Calendar Year Plans with Extensions. Plan administrators generally have seven months after the end of a plan year to file a Form 5500, including applicable schedules and attachments. For plan years ending December 31, 2024, the Form 5500 filing deadline was July 31, 2025. However, for plans that obtained an extension, the Form 5500 must be filed by October 15, 2025.
- Summary Annual Report Deadline for Calendar Year Plans. Plan administrators whose plans must provide Summary Annual Reports generally must distribute them within nine months after the plan's year end (e.g., for plan years that ended December 31, 2024, the deadline is September 30, 2025). However, if a plan has received an extension for filing its Form 5500, the deadline is extended to two months after the extended Form 5500 filing deadline.
Retirement Plans
- Medicare Notice of Creditable Coverage. Plans that provide prescription drug coverage to Medicare Part D eligible individuals must notify these individuals whether the drug coverage they have is creditable or non creditable by October 15, 2025.
Retirement Plans
- Annual Funding Notice.Calendar year defined benefit plans with 100 or fewer participants generally must provide an Annual Funding Notice to required recipients by the Form 5500 filing deadline, including filing extensions.
Benefits Counselor
Reinhart's Employee Benefits Practice is one of the largest and most tenured in the country:
Attorneys: Thomas Funk, Jeffrey Fuller, Kristin Bergstrom, Bennett Choice, John Mossberg, William Tobin, Jussi Snellman, Gregory Storm, Rebecca Greene, Lynn Stathas, Philip O'Brien, Pete Rosene, Pam Nissen, Michael Joliat, Lucas Pagels, Andrew Christianson, Stacie Kalmer, Jessica Culotti, Bryant Ferguson, Justin Musil, Amanda Cefalu, John Barlament, Woomin Kang, Nicholas Zuiker, Martha Mohs, Katherine Kratcha, Karyn Durkin, Paul Beery, Joshua Hernandez, Ambar Cornelio and Teresa Kulick.
Paralegals: Colleen McGuire Schmitz, Laurie Matthews, Mary Kaminski, Amanda Klein, Cheryl Yerkes, Stacy Heder, Pamela Martinez, Patrice Wright and Lucretia Anderson.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
