Compass
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Manager - Defined Contribution Plans M2B Retirement Consulting LLC
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BPAS
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Senior Retirement Plan Administrator Envoy Financial
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Senior Retirement Plan Analyst - Defined Contribution Plans M2B Retirement Consulting LLC
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Employee Benefits Account Manager U.S. Retirement & Benefits Partners
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Regional Vice President of Sales The Retirement Plan Company
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MAP Retirement USA, LLC
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Retirement Plan Analyst - Defined Contribution Plans M2B Retirement Consulting LLC
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AT&T Sued Over 2023 Pension Risk Transfer
October Three Consulting Mar. 18, 2024 "The lawsuit represents the first major challenge to a risk transfer of defined benefit plan obligations to a 'private equity-backed' insurer. It alleges that, in selecting Athene for this risk transfer, defendants breached their ERISA fiduciary duties of loyalty and prudence and, under [DOL] Interpretive Bulletin 95-1, their obligation to select the 'safest available annuity.' " [Piercy v. AT&T Inc., No. 24-10608 (D. Mass. complaint filed Mar. 11, 2024)] Tags: Fiduciary Duties • Funding of DB Plans |
Cornell University Employees Ask SCOTUS to Address Circuit Split for Retirement Plan Pleadings and Proof
HR Dive Mar. 18, 2024 "The case ... involves an alleged circuit split. The 2nd, 3rd, 7th and 10th U.S. Circuit Courts of Appeal have found that ERISA requires plaintiffs to 'plead and prove additional elements and facts not contained' in the law's text, according to the employees, who said that the 8th and 9th Circuits have not found that the law makes such requirements." [Cunningham v. Cornell Univ., No. 21-0088 (2d Cir. Nov. 14, 2023; cert. pet. filed Mar. 13, 2024)] Tags: Fiduciary Duties |
Association of BellTel Retirees Points to Red Flags in Verizon PRT Deal
PLANSPONSOR; free registration may be required Mar. 18, 2024 "In response to last week's announcement that Verizon Communications Inc. completed a $5.9 billion pension risk transfer to Prudential Insurance Co. and RGA Reinsurance Co., leaders of the Association of BellTel Retirees are calling for renewed protection of Verizon retirees' pension assets." Tags: Fiduciary Duties • Funding of DB Plans |
Healthy Habits for Health Plan Fiduciaries
Faegre Drinker Mar. 18, 2024 "[1] Identify the fiduciary who is responsible for health plan administration.... [2] Make sure all plan documentation (plan, SPD, communications, committee charter if applicable, etc.) is regularly updated.... [3] Identify the responsibilities of the health plan fiduciary.... [4] Train the health plan fiduciary on [these] responsibilities and on the litigation risks.... [5] Document the training and the processes and monitoring[.]" |
Plan Advisors: Help Plan Sponsors in Fiduciary Litigation While Protecting Yourself
American Retirement Association [ARA] Mar. 18, 2024 "Defending against fiduciary breach and related claims is time-consuming and expensive not only for the plan sponsor defendants but also for the plan's service providers. Chief among these providers is a plan's investment advisor, which likely will play a central role in the defending against the plaintiff's claims. This article explores what 3(21), or nondiscretionary, investment advisors can expect when their plan sponsor clients are sued, as well as what they can do to protect themselves and their clients and limit the cost and disruption of fiduciary litigation." |
AT&T and Lockheed Martin Face Class Actions Over Pension Risk Transfers to Athene
Thompson Hine Mar. 15, 2024 "The lawsuits come at a time when plan sponsors, due to a range of factors including the relatively favorable interest rate environment, have an increased interest in de-risking activities ... [T]he industry awaits an overdue report from the [DOL] to Congress on existing guidance on fiduciary duties under [ERISA] when selecting an annuity provider that may preview changes to that guidance.... [T]he outcome of these cases and the report to Congress could have far-reaching implications for sponsors and plan fiduciaries engaging in PRTs." [Piercy v. AT&T Inc., No. 24-10608 (D. Mass. complaint filed Mar. 11, 2024); Konya et al. v. Lockheed Martin Corp., No. 24-0750 (D. Md. complaint filed Mar. 13, 2024)] Tags: Fiduciary Duties • Funding of DB Plans |
Former Pension Plan Participants Sue Lockheed Over Athene Risk Transfer
planadviser Mar. 15, 2024 "This is the second major lawsuit this week related to a plan sponsor's choice of Athene to conduct a PRT.... The lawsuit ... alleges that the choice of Athene was not compliant with the [DOL's] Interpretive Bulletin 95-1, which mandates that plan sponsors must 'take steps calculated to obtain the safest annuity available, unless under the circumstances it would be in the interest of participants and beneficiaries to do otherwise.' " [Konya et al. v. Lockheed Martin Corp., No. 24-0750 (D. Md. complaint filed Mar. 13, 2024)] Tags: Fiduciary Duties • Funding of DB Plans |
Don't Set It and Forget It: Keeping Up Your Fiduciary Committee
Jackson Lewis P.C. Mar. 15, 2024 "[B]est practice items committees should consider annually: [1] Review the committee charter.... [2] Schedule fiduciary training.... [3] Consider establishing a committee for your health and welfare programs.... [4] Schedule regular committee meetings and document the process.... [5] Review the fiduciary liability insurance policy." Tags: Fiduciary Duties • Health Plan Administration • Retirement Plan Administration |
The DOL's Fiduciary Proposals: The Impact on Recommendations of Annuities (PDF)
Faegre Drinker [Guidance Overview] Mar. 15, 2024 33 presentation slides. "The essence of the DOL's fiduciary proposals and their impact on distribution of annuities is found in: [1] The DOL's Fiduciary Proposals and the Impact on Recommendations of Annuities Retirement Security Rule: Definition of an Investment Advice Fiduciary; [2] Proposed Amendment to Prohibited Transaction Exemption 2020-02; [3] Proposed Amendment to Prohibited Transaction Exemption 84-24." |
Yale University Challenges Participants' Appeal in 403(b) Excessive Fee Suit
American Retirement Association [ARA] Mar. 15, 2024 "[An] issue raised in the appeal was the arguably contradictory jury results that a breach had occurred, but no damages resulted. Also questioned was the jury's assessment that a prudent fiduciary COULD have made the same decisions, whereas the plaintiffs argued that the correct standard was that a prudent fiduciary WOULD have made those decisions." [Vellali v. Yale Univ., No. 16-1345 (D. Conn. Jun. 28, 2023; on appeal to 2d Cir. No. 23-1082, response brief filed Mar. 8, 2024)] Tags: 403(b) Plans and Annuities • Fiduciary Duties • Retirement Plan Investment Costs |
AT&T Sued by Participants Over 2023 Pension Risk Transfer with Athene Annuity and Life
PLANSPONSOR; free registration may be required Mar. 14, 2024 "After conducting an $8.05 billion pension risk transfer in May 2023 and offloading 96,000 of its plan participants and beneficiaries, AT&T Inc. was sued by four former participants ... The former participants ... claimed that AT&T's decision to conduct the PRT with Athene Annuity and Life Company placed its retirees in danger and that AT&T and its independent fiduciary, State Street Global Advisors Trust Co., stood to gain from the transfer. " [Piercy v. AT&T Inc., No. 24-10608 (D. Mass. complaint filed Mar. 11, 2024)] Tags: Fiduciary Duties • Funding of DB Plans |
Understanding Health Plan Fiduciary Duties
Savoy Mar. 14, 2024 "Are you exercising discretion, or making a recommendation? For most benefits consultants, real discretion sits elsewhere. The employer is generally making decisions on behalf of the plan, even at your recommendation.... Is the HRA administrator performing a ministerial function, where they only act at the direction of the plan, or are they making black-and-white decisions out of a gray area?The real answer to 'are you a fiduciary' is anything but black and white, and requires a fact-specific inquiry." Tags: Fiduciary Duties |
J&J Case Practical Considerations: The Core Four ERISA Fiduciary Duties, Part 2
Newfront Mar. 13, 2024 "[T]he class plaintiff argues J&J had the duty to ensure that decisions were made in the best interest of the plan and its participants, including reviewing the plan's prescription drug costs and taking steps from such reviews to save the plan and participants millions of dollars. If J&J is ultimately found to have breached its fiduciary duties in this area, there could be a wave of claims targeting similar situations." [Lewandowski v. Johnson & Johnson, No. 23-0671 (D.N.J. complaint filed Feb. 5, 2024)] Tags: Fiduciary Duties • Health Plan Administration • Health Plan Costs |
DOL Fiduciary Rule Expected This Spring
Armstrong Teasdale [Guidance Overview] Mar. 13, 2024 "In an unusual move, the DOL held a hearing regarding their proposed rules before the comment period had ended and received more than 19,000 comments during the comment period, which ended Jan. 2, 2024.... Many expect that, if the proposed rules are finalized, there will be challenges to the rules under the Administrative Procedures Act due to this unusual procedure." Tags: Fiduciary Duties |
Plan Sponsor Attitudes Toward Retirement Plan Management and Fiduciary Outsourcing (PDF)
Pentegra Mar. 13, 2024 18 pages. "More than 70% of plan sponsors say they find managing the details of their retirement plan a distraction from their core business ... Legislative compliance and fiduciary responsibilities rank high among chief retirement plan challenges ... More than 50% of plan sponsors use a professional fiduciary to outsource plan governance and oversight ... Plan sponsors judge retirement plan success by assessing participant success ... Nearly 40% of plan sponsors ensure plan success by using professional fiduciary resources ... More than 50% of plan sponsors employ a total benefits outsourcing approach." |
The Hy-Vee Summary Judgment Record Highlights Unfair Fiduciary Malpractice Lawsuits Against Large Plan Sponsors
Encore Fiduciary [Opinion] Mar. 12, 2024 "This case reinforces four key points that animate most excess fee cases: [1] We must allow plan fiduciaries to correct the record at the pleading stage when a complaint is based on false fee amounts; [2] We cannot allow complaints to use misleading benchmarks from random plans instead of real context of the entire market of what all large plans pay; [3] It is unfair to allow plaintiff lawyers to regulate fiduciary liability unless they can show a clear lack of any fiduciary process.... and [4] Recordkeeping is not commoditized for all large plans." [Rodriguez v. Hy-vee, Inc., No. 22-0072 (S.D. Iowa Mar. 7, 2024)] |
The New Fiduciary Rule, Part 23: The Final Rule Has Been Sent to the OMB
FredReish.com [Guidance Overview] Mar. 12, 2024 "In a little over 2 months, the DOL finalized its proposed fiduciary rules ... That 2-month turnaround is very fast as compared to the usual time frames ... The OMB has up to 90 days to review rules, but this suggests that its review could be done in 45 days, give a week or two. While we know that the final rule is at the OMB, we don't know what it says or how it changed from the proposals." |
J&J Lawsuit Impacts Employer-Sponsored Health Plan Fiduciary Obligations
NFP Mar. 12, 2024 "[T]he J&J plan funding is distinct from the typical funding of employer-sponsored group health plans because it is funded through a voluntary employee benefits association (VEBA).... [F]unds held in such a trust -- segregated from the employer's general assets -- are considered ERISA 'plan assets' and subject to ERISA fiduciary protections, including the duties of loyalty and prudence. As a result, certain aspects of the case, and perhaps any resulting decision, may be limited in applicability." [Lewandowski v. Johnson & Johnson, No. 23-0671 (D.N.J. complaint filed Feb. 5, 2024)] Tags: Fiduciary Duties • Health Plan Administration • Health Plan Costs |
Past Is Prologue: DOL Proposes to Change the Definition of 'Investment Advice' (PDF)
Groom Law Group, via The Investment Lawyer [Guidance Overview] Mar. 12, 2024 13 pages. "The purposes of this article are to [1] summarize the DOL's 1975 regulation and other guidance defining investment advice, [2] provide an overview of the Department's 2016 investment advice regulation, which was vacated by a federal appellate court, [3] explain changes to the Department's interpretation of its 1975 regulation in Prohibited Transaction Exemption 2020-02, and [4] discuss the 2023 Proposal." |
The American Airlines ESG Fiduciary Case Exposed the Problem with Mandated Proxy Voting (and More)
Fiduciary News; free registration required [Opinion] Mar. 12, 2024 "The core conflict arises when portfolio managers vote security proxies in a manner dictated by prioritizing political interests rather than the beneficiary's best interest. Part of the American Airlines case includes this allegation." [Spence v. American Airlines, Inc., No. 23-0552 (N.D. Tex. February 21, 2024) ] |
The Importance of Governance in Retirement Plans
Ferenczy Benefits Law Center Mar. 12, 2024 "While the goal for most companies that offer self-direction of investments to their participants is to avoid liability for the returns, that avoidance only happens if certain rules are met.... [H]aving a written set of practices and procedures ensures everyone involved in the administration of the plan is on the same page.... Turnover at a company is frequently where we see breakdowns happen in plan administration. Having a solid base of governance materials in place helps train replacements and avoids these breakdowns." Tags: Fiduciary Duties • Retirement Plan Administration • Retirement Plan Investments |
DOL Sends Final Fiduciary Rule to OMB
Groom Law Group Mar. 11, 2024 "On March 8, 2024, the [DOL] sent a final version of the Retirement Security Rule: Definition of an Investment Advice Fiduciary (the 'Fiduciary Rule') to the Office of Management and Budget (OMB) for review. OMB review is typically the final stage of the regulatory process before the publication of a final rule and can take anywhere from a few days to several months. Assuming a normal review process, [the authors] expect the Fiduciary Rule to be released by the end of May. The text of the Fiduciary Rule will not be publicly available until it is released by DOL or published in the Federal Register." Tags: Fiduciary Duties |
A New Frontier for ERISA Fee Suits: Group Health Plans
McGuireWoods Mar. 11, 2024 "Because fiduciaries are now required to have increased access to cost and pricing information of underlying plan benefits, considering how to use data to help evaluate and control plan costs should be top of mind for ERISA group health plan fiduciaries. Identifying the responsible fiduciaries for this function is critical as ERISA plaintiffs' firms begin using the same or similar data to support claims regarding excessive fees paid by group health plans." [Lewandowski v. Johnson & Johnson, No. 23-0671 (D.N.J. complaint filed Feb. 5, 2024)] Tags: Fiduciary Duties • Health Plan Costs |
District Court Expands Fiduciary Liability to Cover Non-ESG Fund Managers' ESG-Related Conduct
Mayer Brown Mar. 8, 2024 "The Court's duty of prudence analysis suggests that a plaintiff can sustain a breach claim merely by pointing to some activity of an investment manager not directly related to 'maximizing' financial benefits, and that a plan sponsor erred by not considering that activity when selecting the manager's funds.... Similar issues abound with the opinion's analysis of the duty of loyalty." [Spence v. American Airlines, Inc., No. 23-0552 (N.D. Tex. February 21, 2024) ] |
Lessons from a Successful ERISA Defense Against Participant Challenge to Target-Date Fund Investments
McGuireWoods Mar. 8, 2024 "[T]he defendants demonstrated that flexPATH recommended its own TDFs only after performing an exhaustive analysis of several alternative investments ... [T]he court rejected plaintiffs' contentions that Wood Group ... needed to document the justifications for engaging flexPATH in committee meeting minutes.... These rulings underscore the importance of not just having prudent processes, but also considering how those processes are documented." [Lauderdale v. NFP Corp., No. 21-0301 (N.D. Calif. Feb. 23, 2024)] Tags: Fiduciary Duties • Retirement Plan Administration • Retirement Plan Investment Costs |