CareerBuilder Sued by Former 401(k) Participant Alleging ERISA Violations
"The complaint said the plan contained 'excessively expensive' mutual funds, causing participants to pay 'excessive fees' to the plan's record keeper and investment adviser.... [The plaintiff] criticized the fees charged by the plan's record keeper, ADP, and its investment adviser, Morgan Stanley, as 'excessive and unreasonable.' Neither was named as a defendant." [Martin v. CareerBuilder, No. 19-6463 (N.D. Ill. complaint filed Sep. 30, 2019)]
Pensions & Investments
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401(k) Lawsuits Get More Complex
"[P]articipants in its $3.2 billion 401(k) plan ... [alleged] that [Community Health Systems Inc.] acted imprudently in retaining an index mutual fund given its tracking error, a reference to how closely the fund tracks a market index like the S&P 500.... Other recent cases ... made the argument that plan sponsors shouldn't allow record keepers to inappropriately use data such as contact information, account size and age to cross-sell proprietary non-retirement-plan-related products like insurance."
InvestmentNews; subscription may be required
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How Do Retirees' Spending Patterns Change Over Time?
"Housing is the largest spending category for every age group ... On average, households spent less on food as they grew older ... [O]lder households allocated a larger share of their budgets to gifts and contributions. The share of health care costs in households' budgets increased with age."
Employee Benefit Research Institute [EBRI]
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Open or Closed: Which 401(k) MEP Choice Should Your Employer Make?
"Employers need to both understand the difference between these choices as well as how those differences might impact their specific situation. In some ways, open MEPs may be problematic for employers seeking the maximum benefits presented by these pooling vehicles. Closed MEPs do not have these problems."
Forbes
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San Diego Labor Unions File Suit to Invalidate Prop B Pension Cut
"City labor unions in San Diego have filed a lawsuit seeking to invalidate 2012's controversial Proposition B pension cut measure, which made San Diego the only city in California to eliminate pensions for most newly hired workers. The lawsuit is an expected and necessary step to wipe out the measure, which was ruled illegal last year by the state Supreme Court because San Diego skipped key legal steps when placing it on the ballot."
The San Diego Union-Tribune
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[Opinion]
Why K-12 403(b) Plans Stink
"ERISA doesn't apply to public K-12 schools and public universities, but it does to private universities and private K-12 school plans. This leads to generally excellent plans at ERISA institutions and long K-12 403(b) vendor lists stocked with mostly-high fee products pushed by non fiduciary sales agents."
403bwise
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Benefits in General
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When ERISA Preempts State Laws for Employee Benefits
"A recent appellate ruling ... addressed whether two Hawaii anti-subrogation statutes are pre-empted by ERISA.... Although the insurer's lien would have been preserved had a portion of the settlement been denominated as reimbursement for medical 'special damages,' that did not occur and the health insurer was left without a means of enforcing its claimed lien to recoup the money it had paid." [Rudel v. Hawai'i Management Alliance Association, No. 17-17395 (9th Cir. Sept. 11, 2019)]
DeBofsky, Sherman & Casciari, P.C.
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Selected Discussions on the BenefitsLink Message Boards
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ESOP Termination Post-Acquisition -- Distributions in Cash Only?
Is there a specific exception to the rule that an ESOP participant must have the right to receive a stock distribution that applies to an ESOP termination related to a merger/acquisition? I think I've seen this before, but now can't find anything on it. Here's the situation -- ESOP plan sponsor was acquired in a stock purchase transaction and merged into the buyer. ESOP was terminated prior to the close of the transaction. Stock of plan sponsor was exchanged for stock of buyer. Can the shares owned by ESOP be liquidated following the plan termination and all plan participants paid distributions in cash?
BenefitsLink Message Boards
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401(k) Plan Carrying Bad Loans; How to Correct and Terminate?
Solo 401k plan had loans taken from the plan without promissory notes, pledges of account balances, etc. The loans at one time (several years ago) exceeded $50,000. Repayments have not been made. The sole participant now wants to withdraw what benefits there are and close the plan. It's been a couple of years since I prepared any corrections under EPCRS, much less a failure like this. Can you get me started off in the right direction?
BenefitsLink Message Boards
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