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Fiduciary duties of trustees, directors, others

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Seventh Circuit Applies Clear Error Standard to Review of Withdrawal Liability Arbitrator's CBA Interpretation
"[T]he Seventh Circuit applied the clear error standard of review to a withdrawal liability arbitrator's interpretation of the parties' underlying collective bargaining agreement (CBA) that required contributions to a multiemployer pension fund. The Court enforced the arbitrator's findings, a victory for the employer whose withdrawal liability was consequently reduced from over $600,000 to $0." [Laborers' Pension Fund v. W.R. Weis Company, Inc., Nos. 16-2079 & 16-2944 (7th Cir. Jan. 8, 2018)] (Seyfarth Shaw LLP)
New Jersey Senator Introduces Bill Requiring Advisers to State They Are Not Fiduciaries
"The bill requires non-fiduciary investment advisers to make a plain language disclosure to clients orally and in writing at the outset of the relationship that ensures that individual investors are aware of the potential conflicts of interest ... The bill requires confirmation by clients that they understand the nature of the non-fiduciary relationship[.]" (Pensions & Investments)
Legislation to Promote Retirement Plan Lifetime Income Options Introduced in the House
"Reps. Tim Walberg (R-MI) and Lisa Rochester (D-DE) have introduced the Increasing Access to a Secure Retirement Act (H.R. 4604), which is legislation intended to clarify and simplify rules under which retirement plan sponsors may offer certain lifetime income investments to their plans' participants.... H.R. 4604 has been referred to the House Committee on Education and the Workforce." (Ascensus)
Sleep Study Fraudsters to Face Long, Dark Nights in Prison
"Federal prosecutors recently indicted the owner of a California medical clinic and a delivery service driver for allegedly bilking employer-sponsored healthcare plans for millions of dollars in claims for sleep study expenses.... [A plan sponsor] should be asking questions about how its administrator processes claim requests and whether the administrator requires supporting documentation to substantiate the claim. Sponsors may also want to periodically consider a claims audit to identify suspiciously claims or educate their participant population regarding red flags to watch for related to fraudulent schemes." (Lockton)
Text of Ninth Circuit Dismissal of Hewlett-Packard Stock Drop Fiduciary Breach Claim (PDF)
"[Plaintiff Mike Laffen] also contends that pursuant to Defendants-Appellees' duty of prudence, Defendants-Appellees should have at least prevented the Plan from making new investments in HP Common Stock Fund and/or made public disclosures about HP stock's risks following the whistleblower's allegations.... Because Laffen has not plausibly alleged an alternative action Defendants-Appellees could have taken that was consistent with securities laws and that a similarly situated prudent fiduciary would not have viewed as more likely to harm than help the Plan, Laffen fails to plead a claim for breach of the duty of prudence." [Laffen V. Hewlett-Packard Co., No. 15-16380 (9th Cir. Jan. 9, 2018; unpub.)] (U.S. Court of Appeals for the Ninth Circuit)
Lawsuit Moves Forward Over University of Chicago Retirement Plan Expenses
"The university worker who challenged the school's $2.1 billion plan sufficiently alleged that he paid excessive record-keeping and administrative fees, a federal judge ruled Jan. 10. In September, the school convinced the judge to dismiss all claims related to this plan -- leaving in place only challenges to the school's smaller $980 million plan -- by arguing that none of the workers involved in the lawsuit received benefits through the bigger plan. The workers resolved that issue by adding a new party to the lawsuit, the judge said, and he allowed challenges to both plans to move forward." [Daugherty v. Univ. of Chicago, No. 17-3736 (N.D. Ill. Jan 10, 2018)] (Bloomberg BNA)
[Guidance Overview] New York Department of Financial Services Proposes Fiduciary Regulation
"If adopted, the Proposal would establish a New York-specific standard for insurance licensee conduct by expanding the scope and requirements of New York's suitability regulation, which currently applies to annuity contracts.... The Proposal ... will overlap in part with the DOL fiduciary rule and a soon-to-be-proposed SEC rule as well as related standards/proposals in states such as Nevada and Connecticut, raising potentially conflicting requirements, compliance challenges, and enforcement uncertainty." (Drinker Biddle)
What Are Plan Committees Responsible For?
"A good way to think of a committee's role is to think of the relationship between a corporate board of directors and management. Management is responsible to and reports up to the board. Management also implements its decisions by directing down and causing the execution of it decisions through the organization. The key difference is that a committee owes an exclusive duty of loyalty and care to plan participants and beneficiaries." (Fiduciary Plan Governance, LLC)
[Guidance Overview] Interesting Angles on the DOL's Fiduciary Rule, Part 76
"BICE only applies to non-discretionary investment advice.... [If] the financial institution or its advisors have the responsibility or authority to make the decisions, or if they actually make the investment or transaction decisions, and there is a financial conflict of interest (that is, a prohibited transaction), BICE does not provide relief.... [Many RIAs] are not aware that, where they have financial conflicts (for example, 12b-1 fees or payments from custodians) for discretionary investment management for IRAs, there is usually not an exemption and the compensation is prohibited." (
Bill Would Provide New Safe Harbor for Annuity Provider Selection
"H.R. 4604, the Increasing Access to a Secure Retirement Act of 2017 ... clarifies and strengthens existing rules to make it easier for retirement plan sponsors to provide guaranteed lifetime income products as part of their employee benefits. It intends to amend [ERISA] and lays out specific criteria for selecting an annuity benefit provider." (planadviser)
Developing Investment Policy and Structure: Balancing Diversity and Simplicity (PDF)
"[K]ey considerations for your investment policy and selection: [1] Participant investment knowledge and sophistication; [2] Fit with overall investment menu; [3] Risk/return tradeoff; [4] Manager track record and consistency." (PlanPILOT)
How to Decide If the Outsourced Model Is Right for Your Plan (PDF)
"A discretionary manager should have the governance structure and processes in place to quickly and effectively capitalize on investment ideas.... In selecting an outsourced provider, asset owners have several factors to consider and no shortage of potential candidates. While a number of these factors are similar to those in selecting a traditional advisor, a discretionary relationship introduces a few unique considerations." (Segal Marco Advisors)
Vanderbilt Can't Shake Suit Over Retirement Plan Fees
"A federal judge on Jan. 5 largely refused to dismiss a proposed class action accusing the school of running a retirement plan with excessive administrative fees, too many service providers, and high-fee investment options. The school nevertheless succeeded in having portions of the lawsuit dismissed, including claims that the school acted disloyally and confused workers by giving them too many investment options." [Cassell v. Vanderbilt Univ., No. 16-2086 (M.D. Tenn. Jan. 5, 2018)] (Bloomberg BNA)
[Opinion] Retirement Industry Trends to Watch in 2018 (PDF)
"[In-plan] retirement income solutions will continue to evolve this year with a goal of providing retirement plan participants with more flexibility.... Guaranteed and non-guaranteed de-accumulation products and strategies should grow this year ... [H]elpful fiduciary guidance by the Departments of Labor and Treasury regarding annuities and other income products will help plan sponsors add retirement income strategies to their retirement plans.... For consultants, the rule and the integration of the SEC could bring further changes to business models and a continuation of the merger activity we saw in 2017" (Institutional Retirement Income Council)
DOL Extends QPAM Relief to Five Financial Institutions
"As a result of the breadth of the QPAM disqualification, many large financial institutions have had to seek DOL relief in recent years. The five financial institutions that received the recent extended relief are JPMorgan Chase & Co., Citigroup, Inc., Deutsche Bank AG, UBS Assets Management and Barclays Capital, Inc. and the length of the extensions range from three to five years." (Mayer Brown)
The Plan Committee: Should You Have One?
"Committees focus attention on key plan matters.... Two heads are better than one.... Committees establish accountability.... Committees make plans better.... Committees make things easier.... Committees reduce exposure to liability." (Fiduciary Plan Governance, LLC)
Pension Funds Could Trade Bitcoin Futures Now. Why Aren't They?
"Although bitcoin futures would diversify the portfolio, bitcoin has well-documented volatility, and plan sponsors might not want to take the risk with even a small allocation... [T]he lack of government control of bitcoin itself is still going to be a concern for plan fiduciaries ... Bitcoin isn't a tangible product and isn't controlled by any government, and having futures trading doesn't change this[.]" (Bloomberg BNA)
Interesting Angles on the DOL's Fiduciary Rule, Part 75
"In the past, there was a common belief among advisors that fiduciary status could be avoided by presenting a list of investments to plan sponsors.... The belief was that, since the list did not 'recommend' any particular investments, it could not be a fiduciary recommendation. While that may (or may not) have been correct before June 9, it is not correct today. The presentation of a selective list will result in fiduciary status, implicating the prudent man rule, the duty of loyalty, and the fiduciary prohibited transactions." (
Fiduciary Standards Now Govern 42 Percent of Advised Retail Assets
"At the end of 2016, nearly $18 trillion in total assets were overseen by all financial advisors ... Of that $18 trillion, about $7.5 trillion -- 42 percent -- was subject to a fiduciary standard, either as part of a broker-dealer fee-based managed account or in a registered investment advisory (RIA) practice ... Investor awareness appears to have played a big role in pushing advisors toward fee-based models." (Advisor News)
Five Plan Sponsor Resolutions for 2018
"[1] I will review the documents sent by my vendor before we send them out.... [2] I will understand the provisions of my plan.... [3] I will consult advisers when I need them.... [4] I will know the deadlines for taking important actions ... [5] I will document our plan decisions." (Cohen & Buckmann, P.C.)
[Opinion] Fiduciary Litigation in 2018: A Pure Heart and an Empty Head Are No Defense
"Whenever the issues of fees is raised in ERISA cases, plan sponsors and the investment immediately respond that ERISA does not require that they select the investment options with the lowest fees. While this is true, it does not equate with an absolute immunity from recommending and selecting investment options that lack any inherent value for investors and pension plan participants." (The Prudent Investment Fiduciary Rules)
[Opinion] Are Broker-Dealers Drowning in Their Own Compliance Standards?
"[T]he compliance and regulatory burden of working at a broker-dealer is slowly but steadily driving advisors to the independent RIA channel.... [T]he broker-dealer community maintains that a fiduciary rule (e.g., from the [DOL]) is unworkable due to the regulatory and compliance burdens it creates... even as leading advisors at broker-dealers continue to leave and transition to the fiduciary RIA model!?" (Nerd's Eye View)
Case Study: DB Plan Due Diligence in Mergers and Acquisitions
"[A]nalysis revealed that the divesting plan sponsor had undervalued the DB plan liabilities by at least 60% of the value proposed in the purchase agreement presented to ... the buyer.... [T]here were four main areas of concern: the mortality assumption, demographic assumptions, terminal funding upon retirement, and associated investment risk." (Milliman)
Noteworthy Federal Cases in 2017 Relating to Employee Benefit Plans
"Here is a round up of cases decided by the U.S. Supreme Court and the First and Second Circuit Courts of Appeals in 2017 involving ERISA employee benefit plans." (Verrill Dana LLP)
New York Proposes 'Best Interest' Standard for Sales of Life Insurance and Annuity Products
"If adopted, New York would become the second state to pass its own best-interest standard. Nevada passed a law that Gov. Brian Sandoval signed in June. Both states cited the lengthy delays of the [DOL] fiduciary rule." (
[Official Guidance] Text of PTEs for Asset Managers Affiliated with Deutsche Bank, Citigroup, JPMorgan Chase, Barclays or UBS
702 pages. "This document contains exemptions issued by the [DOL] from certain of the prohibited transaction restrictions of [ERISA] and/or the Internal Revenue Code ... This notice includes ... 2017-03, JPMorgan Chase & Co., D-11906; 2017-04, Deutsche Investment Management Americas Inc. (DIMA) and Certain Current and Future Asset Management Affiliates of Deutsche Bank AG, D-11908; 2017-05, Citigroup Inc., D-11909; 2017-06, Barclays Capital Inc., D-11910; 2017-07, UBS Assets Management (Americas) Inc.; UBS Realty Investors LLC; UBS Hedge Fund Solutions LLC; UBS O'Connor LLC; and Certain Future Affiliates in UBS's Asset Management and Wealth Management Americas Divisions, D-11907." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])
KKR, Blackstone Sued Over Fund Sales to Kentucky Retirement System Pension Plan
"The plaintiffs, including a retired state trooper and a firefighter, allege that the big asset managers misrepresented expensive and risky 'black-box' bundles of hedge funds as safe ways to generate high returns. Instead, those investments contributed to the pension system's virtual insolvency, the plaintiffs said, while the managers pocketed excessive fees." (Pensions & Investments)
Fake News Hits Fiduciary Fight
"A pair of investigative reporters from The Wall Street Journal took a closer look at comments posted to the DOL's website that are critical of the fiduciary rule.... 'A significant number of fake comments appear among thousands criticizing a proposed federal rule meant to prevent conflicts of interest in retirement advice,' the paper reported. 'Many of the comments weren't written by the people they were attributed to[.]' " (401K Specialist)
[Opinion] Plan Sponsors to 401(k) Advisors: What Have You Done for Me Lately?
"The lack of thorough service by plan advisors of 401(k)s is not sitting well with plan sponsors.... [In] an annual Plan Sponsor Attitudes survey, 38% of sponsors are looking to switch advisors, up from 30% in 2016 and 9% in 2013. Advisor complacency, coupled with a need for more knowledgeable advisors, is prompting the switch." (Francesca Federico, via Forbes)
[Opinion] What Does the New Year Hold? Three Predictions for 2018
"[1] Increasing complexity for plan sponsors ... [The] move to more transparent and potentially less expensive investment options is exposing the underlying economics of plan recordkeeping and begging the questions of who is paying plan fees and how are they paying them.... [2] Benefits matter more ... [W]hile Millennials may have the most to gain by taking advantage of employer-offered financial advice and wellness programs, these programs cater to the needs of all three generations currently in the workforce.... [3] The return of market volatility ... We will need to reinforce the importance of diversification, the value of dollar cost averaging, and the benefits of staying in the market." (CAPTRUST Financial Advisors)
Push Grows to Use Pension Funds to Address Climate Change
"New York Gov. Andrew Cuomo last week proposed a 'roadmap' for divesting the $200 billion New York state pension fund from fossil fuel investments, joining a move to use shareholder clout to reduce greenhouse gas-emissions believed to cause climate change.... CalPERS was a key organizer of a coalition of 225 large investors with $26 trillion in assets launched this month to use 'engagement' or persuasion, rather than divestment, to urge corporations to reduce greenhouse-gas emissions." (Calpensions)
[Opinion] With Truth Still Elusive After the DOL Rule Begins to Take Effect, Don Trone Attacks the Issue Head on with a Modern-Day Lie Detector Test
"Seizing on what he sees as a monumental failure of the DOL fiduciary rule to fulfill its framers' mission, the early godfather of the fiduciary movement is pioneering a 2018 version of the lie detector test as a means of documenting virtuous intentions in the financial advisory field." (RIABiz)
[Opinion] Target Date Funds Could Be Costing Your Plan More Than You Know
"As a plan sponsor, you need to understand your participant demographics, needs, amount of service needed and any limitations of your plan provider. TDFs have been manufactured and brilliantly marketed by a very powerful financial service industry. It's important to understand that they are not superior to other investments when it comes to performance. So, if they're not superior to other investment options, then you should ask yourself ... who stands to profit the most from their use?" (PLANSPONSOR)
Princeton Retirement Plan Lawsuit Paused by Judge
"A lawsuit challenging the fees and investment options in Princeton University's retirement plan will be put on hold until a federal appeals court considers a similar case against the University of Pennsylvania.... The judge said the Third Circuit's ultimate ruling in that case 'directly bears' on how the Princeton case is resolved." (Bloomberg BNA)
CenturyLink Complaint Claims Large Cap Multi Manager Fund Is Defective Design
"As in other ERISA prudence litigation, the plaintiff references research that purports to prove the efficient market hypothesis. But, despite the claims of some plaintiffs in 401(k) plan fee litigation, no court has found, as a matter of law, that including an actively managed fund in a 401(k) plan fund menu is per se imprudent or, even, creates a presumption of imprudence. Indeed, despite these plaintiffs' claims, it's hard to imagine a court adopting such a standard." (October Three Consulting)
Fee Structure and Evaluation in 403(b) Plans
13 pages. "One-third of respondents are unsure if their plan uses revenue sharing to pay expenses, including 50 percent of small plans. One-fourth of plans reallocate revenue sharing among all participants while one-fourth of respondents are unsure.... About one-fourth of respondents are not aware of formal fee policy statements. Half of respondents are unfamiliar with fee levelization." (Plan Sponsor Council of America [PSCA])
The Pleading Standard Applicable to Claims Involving Private Company ESOPs: Does Dudenhoeffer Apply?
"A typical claim in the private company context involves an allegation that [an ESOP] overpaid for company stock. Those cases arguably do not fit squarely into the pleading framework that Dudenhoeffer established. This article addresses how federal courts have applied Dudenhoeffer's holding in cases involving ESOPs sponsored by closely held companies." (Trucker Huss)
The Economy's Impact on Retirement Plans
"Whether the company is outsourcing the investment selection to a fiduciary investment manager or working through a committee, the plan sponsor needs to consider overall exposure to mitigate any downside risk and take advantage of opportunities. Which types of investments may be sensitive to rising interest rates? What is the plan's bond and long-term equity exposure?" (RSM US)
DOL Extends Fiduciary Rule Transition Period as SEC Prepares to Issue Its Own Rule
"[T]he net effect of this review will be elimination of the contract requirement associated with BICE, and perhaps all of the rule requirements deferred during the transition period.... [C]ertain types of products that are designed to avoid compensation conflicts and do not pose special risks to investors, such as 'clean' mutual fund shares, may be targeted for favorable regulatory treatment under a new streamlined PTE." (Fi360)
Your 403(b) Fiduciary Responsibilities and 403(b) Plan Litigation (PDF)
26 presentation slides. Topics: [1] Overview of Relevant ERISA Provisions; [2] Co-Investments with Endowment; [3] Environmental, Social and Governance (ESG) Investing; [4] Monitoring 3rd Parties; and [5] 403(b) Plan Litigation. (McDermott Will & Emery)
Federal Judge Grants Delta Air Lines' Motion to Dismiss ERISA Fee Lawsuit
"The lawsuit alleged that defendants' conduct cost plaintiffs and the proposed class millions of dollars needlessly expended on excessive fees and costs; however, in a short but informative opinion, a judge has ruled the proposed class of plaintiffs lacks standing." [Johnson v. Delta, No. 17-2608 (N.D. Ga. Dec. 12, 2017)] (planadviser)
Interesting Angles on the DOL's Fiduciary Rule, Part 74
"The recordkeeper must apply the criteria to all of the investments that are available on its platform and then report the results.... [T]hat could, depending on the criteria selected by the plan sponsor, be a list of just a few funds or a list of hundreds of funds. Unfortunately, if the recordkeeper further winnows the list of investments produced by the application of the generally accepted criteria or the IPS criteria, the recordkeeper could become an investment fiduciary." (
Stable Value Funds: A Financial Investment with Risky Litigation Consequences
"Stable value funds have desirable features.... But those features do not eliminate the risk of losses, they just delay them. Indeed, a stable value fund with a longer duration is riskier than a fund with a shorter duration.... Considering the litigation risks for fiduciaries who do not set the stable value fund just right, ... a fiduciary may conclude the best option is not to offer a stable value fund at all. Yet fiduciaries have also been sued for not offering a stable value fund." (Mayer Brown)
403(b) Sponsors Need More Information on Plan Design, Including How Plan Expenses Are Paid
"Nearly one-third (30.9 percent) of 403(b) plan sponsors are unsure as to whether they use revenue sharing to pay plan expenses ... The PSCA annual survey also found low use of a formal fee policy statement to monitor the reasonableness of plan fees and services, with less than one-third (31.9 percent) of respondents indicating their use. One-fifth (21 percent) are not aware of what a fee policy statement is, according to the survey." (Plan Sponsor Council of America [PSCA])
[Opinion] How Merrill Lynch Breached the RIA Fiduciary Citadel
"In decades of competing against wirehouse brokers owners, registered investment advisors have always found comfort in one thought: Morgan Stanley, UBS, Merrill Lynch and Wells Fargo may blur meanings and provide pseudo-advice offerings but they'll never really try to out-RIA RIAs by going to greater lengths to remove conflicts and put client interests first.... Now it is becoming apparent that RIAs in the 401(k) field may need to defend against the Bank of America wealth manager as it mobilizes an ever-growing army of DOL-rule-compliant advisors as a zealously converted fiduciary player." (RIABiz)
401(k) Investment Options: 10 Tips for a Winning 401(k) Fund Lineup
"[1] Follow your Investment Policy Statement.... [2] Have enough fund options.... [3] Limit fund options.... [4] Don't tilt toward a specific investment style.... [5] Do tilt toward low fee funds.... [6] Be sure to include index funds.... [7] Avoid revenue sharing.... [8] Do seek the cheapest share class available.... [9] Do include target date funds ... [10] Consider the track record -- is there one?" (ForUsAll)
Adding Religiously Compliant Funds to a Retirement Plan
"[To] include a fund in a plan requires a fiduciary due diligence process -- a review of quantitative and qualitative characteristics. Some funds, while religiously compliant, might not pass the criteria used to judge other funds in the plan.... Participant education would be key for any company deciding to add religiously compliant funds." (PLANSPONSOR)
Interesting Angles on the DOL's Fiduciary Rule, Part 73
"In the past, recordkeepers often provided sample line-ups to start-up plans and to existing plans that were transferring to their recordkeeping platform. However, under the new fiduciary definition, a selective list of investments is considered to be fiduciary investment advice, which means that the recordkeeper would need to make prudent recommendations and would be subject to ERISA's prohibited transaction rules (e.g., for any proprietary investments and revenue sharing). Fortunately, there is an exception in the fiduciary regulation; unfortunately, though, the scope of the exception is limited." (
Aon Hewitt Can't Escape Safeway's 401(k) Fee Lawsuit
"[The federal district judge] rejected Aon's argument that it didn't breach its fiduciary duty of prudence because it had in place a 'master consulting agreement' with Safeway that established Aon's 'robust process' in providing 'ongoing consulting and performance evaluation.' The terms of the agreement, standing alone, can't establish that Aon acted prudently, and the fact that an agreement exists doesn't prove it was followed, [the judge] said." [Terraza v. Safeway Inc., No. 16-3994 (N.D. Cal. Dec. 11, 2017)] (Bloomberg BNA)
The Benefits of Mediation in ERISA Claims
"Mediation can help reduce the chances of the plaintiff being awarded a higher payout, and avoid payment of the defendant's legal fees. A carefully mediated negotiation can allow both parties to walk away content with the outcome, without the unknown outcome that can result from a trial." (Butterfield Schechter LLP)
[Opinion] Why Multiple Employer 401(k) Plans Are Obsolete Today
"MEP providers and their investment fund partners routinely tout plan benefits that either don't exist or are just as accessible with a single employer 401(k) plan. The reason is simple -- to protect asset-based fees that can quickly grow out of control.... [T]hanks to today's 401(k) investments and technology, single employer 401(k) plans can offer lower fees and the same level of outsourced fiduciary services (if desired). These developments have made MEPs obsolete." (Employee Fiduciary)
Text of Amicus Brief to Supreme Court: Claim for Misrepresentation-Based ERISA Fiduciary Breach Requires Participant's Detrimental Reliance
"The Second Circuit's holding that reliance is not an element of a claim for misrepresentation-based fiduciary breach is squarely at odds with the other courts' decisions and the ERISA principles underlying them. But the holding also sanctions claims that are jurisdictionally infirm. A plan participant who did not rely on a misleading communication has no standing to challenge it, because she cannot establish an injury -in-fact that was caused by the alleged ERISA violation.... Plaintiffs' real concern here -- the implementation of less advantageous plan terms -- derives from plan sponsor decisions that are permitted by ERISA, not from the defective communications plaintiffs now challenge." [Osberg v. Foot Locker, Inc., No. 15-3602 (2d Cir. July 6, 2017; cert. pet. filed Nov. 8, 2017)] (American Benefits Council)
How Anchoring Hurts 401(k) Retirement Savers
"Investors will often look at what the market is doing and compare their own returns to that. If the market is up 10% and they are up 5%, they're not happy, even though they're making money. If the market is down 10% and they're only down 5%, they're happy, even though they're losing money. This is perhaps the greatest reason why people miss their goals -- they're anchored to (and therefore aiming at) the wrong target." (Fiduciary News)
ERISA Stock Drop Cases Since Dudenhoeffer: The Pleading Standard Has Been Raised
"The requirement that the plaintiffs 'plausibly' plead that no other prudent fiduciary would find that a proposed alternative action would do more harm to a plan than if that fiduciary took no action at all has proven to be very difficult for plaintiffs to overcome. Nevertheless, ... the plaintiffs' bar continues to attempt to find new ways to satisfy the substantial hurdles presented by Dudenhoeffer." (Trucker Huss)
Ostrich Fiduciaries: Can We Get Their Heads Out of the Sand?
"49% of plan sponsors surveyed, 39% of investment committee members and 22% of administrative committee members didn't understand that they are fiduciaries.... A clueless fiduciary may be: [1] Failing to monitor high plan fees ... [2] Putting plan investments in a 'set it and forget it' category ... [3] Not checking what the vendors are doing ... [4] Not picking the best outside advisers ... [5] Missing reporting deadlines or unaware that forms must be filed. [6] Engaging in prohibited transactions." (Cohen & Buckmann, P.C.)
Courts Weigh in on Challenges to University Retirement Plans
"These rulings, most of which allowed claims to proceed past the motion to dismiss stage, highlight the variation in standards courts apply when weighing ERISA fiduciary suits. Moreover, they underline the need for plan fiduciaries to review the performance and fees of their plans' service and investment providers on a regular basis to determine whether the providers' fees are reasonable and their continued retention is appropriate." (Steptoe & Johnson LLP, via Lexology)
Judge Rules Prudential Violated ERISA with Interest-Bearing Life Insurance Accounts
"A federal judge overseeing a putative class action against Prudential Insurance Co. has ruled that the company violated ERISA by using interest-bearing bank accounts to hold life insurance money instead of paying beneficiaries directly.... The plaintiffs were beneficiaries of deceased workers employed by JPMorgan and Con-way Inc." [Huffman v. The Prudential Ins. Co. of America, No. 10-5135 (E.D. Penn. Dec. 7, 2017)] (The Legal Intelligencer)
Excessive Fee Suit Targeting Fujitsu Results in $14 Million Settlement
"The lawsuit contended that among defined contribution plans with more than $1 billion in assets, the average plan has costs equal to 0.33% of the plan's assets per year. However, in 2013, total fees for the Fujitsu plan amounted to approximately 0.88% of plan assets, or about $11,400,000. In 2014, total fees amounted to approximately 0.90% of Plan assets, or about $11,900,000." (PLANSPONSOR)
[Guidance Overview] DOL Fiduciary Rule: Still Very Much Alive
"[T]he final rule does not delay the expanded definition of a fiduciary ... This means that many service providers, including IRA advisors, are now subject to a fiduciary standard of conduct and must undertake good faith efforts to comply with the new Fiduciary Rule, including adherence to impartial conduct standards when rendering investment advice." (Trucker Huss)
Retention Practices: Fiduciary Records Are (Almost) Forever
"[A] fiduciary record is any record relating to: The formulation of an investment policy or investment decision; Any record relating to the hiring, retention, or firing of a plan service provider. These records should include, among other things, reports, service provider sales collateral, prospectuses, and committee minutes." (Fiduciary Plan Governance, LLC)

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