The ERISA Edit: DOL Priorities and Another ESG Suit
Employee Benefits Alert
EBSA's Priorities for 2023
In several recent public appearances, Assistant Secretary Lisa M. Gomez outlined priorities for the Employee Benefits Security Administration (EBSA) in the coming year:
Pension and Retirement Plans
- Improving participant communications and disclosures (proposed rule of lifetime income illustrations pending)
- Improving Form 5500 (proposed rule pending)
- SECURE 2.0 rulemaking and implementation
- Amending definition of "fiduciary" investment advisor
- Implementing environmental, social, and governance (ESG) final rule (Administrative Procedure Act (APA) challenges pending)
- Amendments impacting prohibited transaction exemptions (proposed rules impacting qualified professional asset managers (QPAMs) and exemption procedure pending)
Health and Welfare Plans
- Mental Health Parity and Addiction Equity Act (MHPAEA) enforcement and rulemaking
- No Surprises Act (NSA) implementation
- Eliminating moral exemption to Affordable Care Act (ACA) contraception coverage (proposed rule pending)
- Improving access to contraception coverage
- Review of Association Health Plan rule
This is an ambitious agenda for the agency, with the SECURE 2.0 and MHPAEA initiatives likely to be top priorities. Assistant Secretary Gomez noted that SECURE 2.0 added about 20 discrete tasks and projects to the agency's to-do list, and that the second annual Report of Congress on MHPAEA enforcement will be issued soon.
Second Suit Filed Challenging DOL's ESG Rule
A second lawsuit was filed on February 21, 2023, seeking to nullify EBSA's Prudent and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights rulemaking (the ESG Rule), 87 Fed. Reg. 73822. The lawsuit alleges that the ESG Rule's issuance was arbitrary, capricious, an abuse of discretion, and not in accordance with the law in violation of the APA. It also asserts that EBSA exceeded its statutory authority in issuing the rule. The allegations in the complaint focus on the rule's use of the undefined phrase "appropriate time horizon" to determine the prudence of a given investment and its elimination of the requirement that plan fiduciaries document their reasoning when choosing between two equal investments. The two plaintiffs are defined contribution plan participants who seek a temporary restraining order and permanent injunction prohibiting the Secretary of Labor from implementing this rule, and a declaratory judgment from the court that the rule violates the APA. As an initial matter, the court will need to address whether these plaintiffs have been harmed by the rule giving them standing to sue.
Upcoming Speaking Engagements and Events
Joanne will speak on the "Practitioner's Panel" at the 2023 Joint TE/GE Council Employee Plans Annual Meeting on February 23, 2023, to highlight hot topics and challenging areas to inform the Employee Benefits Security Administration (EBSA) and provide feedback to EBSA for solutions and ideas.
Joanne and Dawn will present, "No Surprises Act Enforcement: How to Prepare for a DOL Audit," a PLI webinar on March 30, 2023, at 1 p.m. ET, discussing the NSA and how it impacts ERISA plans and their administration.
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