SHRM Urges Caution in ERISA Expansion Case Before 4th Circuit

On Aug. 4, SHRM filed an amicus brief in Milligan v. Merrill Lynch, Pierce, Fenner & Smith, Inc., a key case before the 4th U.S. Circuit Court of Appeals that could redefine how incentive compensation plans are treated under the Employee Retirement Income Security Act (ERISA). At issue is whether stay-based bonus plans — common in many workplaces — should be classified as pension plans under federal law, triggering significant compliance requirements.

While similar challenges have emerged before, this case could have broader implications. The plaintiffs’ argument could subject equity awards, bonuses, and other deferred compensation to ERISA, even retroactively. That would dramatically raise costs and compliance risks for employers.

SHRM’s brief outlined the real-world consequences of expanding ERISA’s scope without clear statutory authority. As ERISA imposes strict obligations on retirement plan sponsors, such a shift would harm employers and employees — especially SHRM Members — who rely on current regulatory guidance to design compliant benefit programs.

SHRM was invited to participate thanks to its past advocacy on related issues, including a similar case, Shafer v. Morgan Stanley. In Milligan, the 4th Circuit is now poised to become the first appellate court to rule on the core legal theory. SHRM’s engagement ensures that HR’s voice is represented in shaping this precedent.