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Pension and Retirement Plan Company
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ERISA Staff Attorney
Kelley Drye & Warren LLP
in CT, NY

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The Newport Group
in NC

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Actuarial Consulting Services
in NJ

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Thompson Hine LLP
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Ninth Circuit Reverses District Court's Dismissal of Amgen Stock Drop Case
"[T]he court's 'more harm than good' discussion ignores the consequences to participants who purchased stock before the period under litigation began.... Should plan participants be given a superior and additional claim (superior and additional to the securities law claim that non-participants have) simply because they bought their stock in plan? Are an issuer/plan fiduciary's disclosure obligations to participants greater than its disclosure obligations to mere shareholders? Isn't that letting the ERISA-disclosure tail wag the securities law-disclosure dog -- will it not result in the announcement of market-moving material information to plan participants first, before it is announced to securities buyers-and-sellers generally?" [Harris v. Amgen, Inc., No. 10-56014 (9th Cir. Oct. 30, 2014)] (October Three Consulting)  

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MassMutual Settlement Provides Guidance on Fiduciary Governance
"[B]efore signing a service agreement with any covered service provider (CSP), the following questions should be considered by the responsible plan fiduciary(ies): ... [1] Does our CSP provide a notice of any additions and deletion from the menu of options? [2] Does any CSP have the discretion to remove an investment from the menu without the prior authorization of the responsible plan fiduciary? ... [3] Does the responsible plan fiduciary have the option of using investment alternatives that do not provide any indirect payments to the CSP? [4] Does the CSP have the discretion to unilaterally adjust their compensation?" (The Lowenbaum Partnership and FRA PlanTools)  

Supreme Court Declines to Hear Appeal of Tussey v. ABB
"The Supreme Court does not provide a reason why they decline to hear appeals. However in this instance, there are at least a few speculative guesses. First, they have already agreed to hear two ERISA cases this term, with one being Tibble v. Edison... Second, on the issue of deference which was the heart of plaintiffs' appeal, the district court will get to decide that issue for the first time." [Tussey v. ABB, Inc., No. 12-2056 (8th Cir. Mar. 19, 2014; cert. denied Nov. 10, 2014)] (The Lowenbaum Partnership and FRA PlanTools)  

Three Ways 401(k) Plan Sponsors Can Reduce Fiduciary Liability
"[W]hile the company sponsoring the plan ultimate remains responsible for the date provided to the 3(16) Fiduciary, it is the very tasks involved in this service that contain the greatest fiduciary liability.... Section 3(21) of ERISA addresses the provision of investment advice.... Given the assumed expertise of the 3(21) Fiduciary, may offer certain limited protections to the plan sponsor with regard to fiduciary liability.... [Only] the 3(38) Fiduciary automatically removes any ongoing fiduciary liability (albeit limited to investment selection) on the part of the plan sponsor. Bear in mind, though, the plan sponsor will always retain the fiduciary liability associated with selecting the 3(38) Fiduciary." (Fiduciary News)  

SEC Increasing Enforcement Efforts for Public Pension Fund Service-Providers
"State Street Corp said on [November 10] it was responding to subpoenas from the U.S. Department of Justice and the [SEC] for information regarding its solicitation of asset servicing business of public retirement plans.... Separately, the SEC said it would increase its enforcement actions in the municipal market, encouraged by its success in recent cases. In the coming year, the SEC will focus on abuses in the pension fund arena, offering and disclosure fraud and broker-dealer abuses, according to Andrew Ceresney, its director of enforcement." (Reuters)  

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Do-It-Yourself Pension Funds: A Hands-On Future for Asset Owners (PDF)
"[K]ey trends that are radically reshaping almost every aspect of how pension funds manage their investments and deliver long-term value to their members. [1] Getting Hands-on with Investment Risk ... [2] Big Bets on Alternatives ... [3] DIY on Asset Management... [4] The Relationship with Asset Managers Evolves ... [5] Fortifying Governance." (State Street Corporation)  

Cash Balance Plans Are Redefining Retirement Benefits
"For employees at small businesses, the advent of a new cash balance plan in addition to their existing 401(k) plan, another vehicle that draws from pretax income, is reason to celebrate. For registered investment advisers who want to expand their practice and offerings, new cash balance programs that are coming online are a potential way to gain new business." (Institutional Investor)  

When Splitting IRA Money in a Divorce, Be Careful
"IRAs ... are split according to the divorce agreement, not a QDRO. A copy of the divorce decree or separation agreement is given to the IRA custodian. When an IRA is split in a divorce, transferring the portion of the IRA that goes to the former spouse via a direct trustee-to-trustee transfer to an IRA in the name of the former spouse is the best way to move the funds. QDROs only apply to company retirement plans such as a 401(k). They do not apply to IRAs." (Slott Report)  

SEC Chairman to Provide 'Clarity' on Her Fiduciary Stance
"[SEC Chairman Mary Jo] White said [on November 10] that she would provide more 'clarity' as to her position regarding a uniform fiduciary rule in the 'short term,' despite the fact that the agency has not yet decided 'whether to do something or what to do' regarding such a rulemaking.... White declined to clarify ... how soon her opinions on a fiduciary rule would come, stating only that deciding whether to use the authority given to the SEC by the Dodd-Frank Act to put brokers under a fiduciary mandate is 'an issue that I've been focused on since I arrived, and certainly in this last fiscal year.' " (ThinkAdvisor)  

[Opinion]

401(k) Reform: A Modest Proposal
"[1] Remove the fiduciary burden from employers.... Employees have the right to expect a plan lineup that carries a suitable mix of affordably priced funds, assembled without conflicts of interest. But that somebody should be a single entity. Have the task done only once, as opposed to thousands of times, and by a party that knows exactly what it is doing, because judging fiduciary acceptability is its only job.... [2] Extend 401(k)s to all workers.... The key is to adopt the first part of this proposal: removing the fiduciary obligation. Doing so will make 401(k)s practical for the small companies that are currently overwhelmed by the regulatory burdens." (John Rekenthaler, in Morningstar)  

[Opinion]

DOL Will Never Clarify the Outsourcing Fiduciary Rules on Its Own
"DOL has its own conflict of interest. Lack of clarity -- and the ability to push the limits of fiduciary law -- works in favor of the DOL Solicitor's Office -- it permits the DOL lawyers to stake out positions that, if subjected to a regulatory notice-and-comment vetting, they couldn't sustain." (money vs. time)  

Text of 2014 ERISA Advisory Council Executive Summary (PDF)
11 pages. Topics: [1] Facilitating Lifetime Plan Participation; [2] Pharmacy Benefit Manager (PBM) Compensation and Fee Disclosure; and [3] Outsourcing Employee Benefit Plan Services. (ERISA Advisory Council)  

Fifth Circuit Adopts Majority Rule on What Constitutes 'Other Instruments' of an ERISA Plan
"The appellants ... had sought production of investment guidelines used by administrators of the appellee pension plans, arguing that they were 'other instruments' under which the plans were operated. The Fifth Circuit disagreed, construing the catch-all provision narrowly so as to apply only to formal legal documents that govern a plan.... [and noting] that the term 'other instruments' in [ERISA] section 104(b)(4) followed a list consisting of formal documents that either [1] provide plan participants and beneficiaries with notice of their rights and obligations or [2] are the foundational documents under which a plan is created and governed." [Murphy v. Verizon Communications, Inc., No. 13-11117 (5th Cir. Oct. 14, 2014)] (Wilson Elser)  

Top Issues for Plan Participants Choosing Nonqualified Salary Deferrals for the Year Ahead
"In the analysis for deferrals to make in 2015, one ongoing issue stems from the tax increases that took effect in 2013, including the additional Medicare taxes for high earners. Other points to consider include ... [1] Maximizing the amount you can contribute to your 401(k) plans.... [2] Cash needs for the year ahead and multi-year projections for your income.... [3] The financial security of your company, and your job security.... [4] Company match.... [5] The thresholds for higher taxes and rates." (myStockOptions.com)  

ISS, Glass Lewis Release 2015 Proxy Voting Updates, Espouse Nuanced Review of Equity Compensation Practices
"ISS will generally recommend voting against a new or amended equity plan if the combination of the foregoing factors indicates that the plan is 'not, overall, in shareholders' interests'.... Glass Lewis has made clear that qualitative factors, such as an effective overall incentive structure, relevance of selected metrics and reasonable long-term payout levels could result in a recommendation in favor of the say-on-pay proposal, even where the Glass Lewis quantitative-based models suggest a pay-for-performance disconnect." (Proskauer's ERISA Practice Center)  

Jeffrey Johnson Joins Pentegra Retirement Services as Regional Director
Pentegra Retirement Services

Three Industry Leaders Team Up To Provide Training for 401k Advisors
Pivirotto Resource Group

Segal Expands Health Consulting Team in Midwest
The Segal Group

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