Benefits Counselor February 2018

General Developments

DOL Confirms Final Disability Claim Regulations to Apply After April 1, 2018

The Department of Labor ("DOL") announced its final decision that the new disability claim regulations will apply to claims filed after April 1, 2018. The DOL had delayed the applicability date of the final regulations to allow commenters the opportunity to submit data and information on the regulation's costs and benefits. The DOL determined that the comments it received did not establish that the final regulations impose unnecessary regulatory burdens or significantly impair workers' access to disability benefits.

Sixth Circuit: City Can Require Winning Bidders to Contribute to Training Fund and Provide Benefits

In Allied Constr. Indus. v. City of Cincinnati, 879 F.3d 215 (6th Cir. 2018), the U.S. Court of Appeals for the Sixth Circuit held that the City of Cincinnati can require winning bidders for city construction projects to contribute to an apprenticeship fund and certify whether they provide health and retirement benefits. According to the court, the city's "responsible bidder ordinance" is enforceable because it is not preempted by the Employee Retirement Income Security Act of 1974 ("ERISA"). The court held that the ordinance does not interfere with ERISA because the city was acting as a market participant, not a regulator, when it established the requirements for winning bidders. This is the first case wherein the Sixth Circuit has adopted the "market participant" doctrine with respect to ERISA. The market participant doctrine exempts a state law or local ordinance from federal preemption when the legislating body acts as a participant, not as a regulator, of a market. Five out of twelve circuits (Second, Third, Fifth, Sixth and Ninth) now apply various forms of the market participant doctrine in ERISA cases.

Retirement Plan Developments

PBGC Increases Civil Monetary Penalties

The Pension Benefit Guarantee Corporation ("PBGC") published final regulations increasing the maximum civil penalties for failures to provide certain notices or other material information under ERISA sections 4071 and 4302.

The maximum penalties under ERISA section 4071 are increased from $2,097 per day to $2,140 per day. Section 4071 penalties apply if a plan fails to provide a notice or other information required under subtitles A, B, C or D of Title IV of ERISA, or ERISA sections 303(k)(4) or 306(g)(4). Among other things, these include: annual reports; plan...