Fiduciary Issues

The Treasury Department and the Internal Revenue Service (IRS) have released Notice 2025-68 (the Notice), containing initial guidance and a request for comments on the implementation of Trump accounts under IRC Section 530A. The Notice also specifies that the agencies intend to issue regulations at a later date. A press release notes that the Notice provides a general overview of how Trump Accounts work and addresses certain initial questions about creating initial and rollover Trump Accounts. An Ascensus Washington Pulse previously provided details of these accounts.

The Office of Management and Budget has received a proposed rule from the Department of Labor (DOL) titled "Requirement to Provide Paper Statements in Certain Cases-Amendments to Electronic Disclosure Safe Harbors”, pursuant to the requirements of the SECURE 2.0 Act.

The Department of Labor (DOL) has issued Advisory Opinion 2025-04A, addressing how a lifetime income investment may satisfy the requirements to be a qualified default investment alternative (QDIA) in a defined contribution plan under the Employee Retirement Income Security Act (ERISA).

The Department of Labor (DOL) filed an amicus (friend of the court) brief in a case (Hutchins v. HP Inc.) that claimed the employer breached its fiduciary duty to the plan by electing to use forfeitures to fund mandatory employer contributions rather than offset administrative expenses borne by participants. 

The Internal Revenue Service (IRS) released Announcement 2025-2, delaying the anticipated applicability date for future final regulations relating to required minimum distributions (RMDs) under section 401(a)(9) of the Internal Revenue Code.

The Office of Management and Budget has received a final rule from the Department of Labor (DOL) titled “Adoption of Amended and Restated Voluntary Fiduciary Correction Program”. The Voluntary Fiduciary Correction Program (VFCP) is a voluntary enforcement program that allows plan officials to identify and correct certain transactions, such as delinquent participant contributions, sales and exchanges, improper loans, and improper plan expenses. The VFCP was last updated in 2006. A proposed amendment was released in 2022.

The House passed H.R. 5339, the Roll back ESG To Increase Retirement Earnings Act (RETIRE Act), by a vote of 217-206.

The Department of Labor has launched an online filing system for termination administrators to be able to submit required information for abandoned plans to DOL in addition to existing email and paper-based methods. This initiative was telegraphed in the recent release of an interim final rule that expands the abandoned plan program to Chapter 7 bankruptcy trustees and makes other changes. More information on the rule can be found here.

More than two years after releasing proposed regulations that revised the required minimum distribution (RMD) regulations and other related guidance, the Internal Revenue Service (IRS) has released final regulations that revise existing regulations applicable to RMDs, eligible rollover distributions, and excess accumulation tax.

The Department of Labor (DOL) has issued an interim final rule, expanding the Abandoned Plan Program regulations to also include plans of employers who are in liquidation under Chapter 7 of the U.S. Bankruptcy Code. The DOL has also released a corresponding amendment to prohibited transaction exemption (PTE) 2006-06, Class Exemption for Services Provided in Connection with the Termination of Abandoned Individual Account Plans.