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$140 Million Settlement: What It Means to Your Retirement Plan Practice

"Present all products offered by a single-covered service provider (CSP) that your prospect or client qualifies to purchase.... If the CSP offers the same investment option in multiple share classes, present your recommended menu with each share class, ... Identify which investment options are proprietary, non-proprietary, and sub-advised, and identify the cost impact ... Disclose the gross and net operating expense ratio, the 12b-1, and any other indirect fee by fund.... Provide the [retirement plan fiduciary] with an estimate of the revenue sharing expected for each fund at the beginning of the plan year and a final tally of the revenue sharing paid for each fund at the end of the year."

Another Court Finds Pension Plan of Church-Affiliated Hospital Is Subject to ERISA

"Ruling in line with the courts in Rollins v. Dignity Health and Kaplan v. Saint Peter's, the court here finds that only a church may establish a church plan. Because Advocate Health acknowledges that it is not a church, it therefore cannot sponsor a plan that falls within the church plan exemption to ERISA." [Stapleton v. Advocate Health, No. 14-C-0187 (N.D. Ill. Dec. 31, 2014)]

Court in Boeing Excessive Fee Case Denies Defendant's Motions for Summary Judgment, Sets Trial Date

"This decision makes two things clear. First, the ERISA plaintiff's bar has refined the claims being brought and/or argued since Hecker and has doubled down on conflicts of interest.... Second, Hecker doesn't have teeth anymore...maybe just baby molars. Possibly it's greatest lasting truth is that service providers such as Fidelity are not fiduciaries when they design a products such as a line up of funds." [Spano v. Boeing, No. 3:06-CV-743-NJR-DGW (S.D. Ill. Dec. 30, 2014)]

After 13 Years, Haddock v. Nationwide Settles for $140,000,000

"Originally filed in 2001, the lawsuit concerned the plaintiffs' allegation that Nationwide received undisclosed revenue sharing payments from non-proprietary mutual funds in violation of ERISA.... The settlement also calls for extensive non-monetary relief ... [T]his is the most substantial settlement ever in an ERISA fiduciary breach case involving the receipt of revenue sharing by a service provider."

Benchmarking: It's All About That Fee

"For the results to be reliable, the plan must be benchmarked against other plans that are similar in size by plan assets and participant count. The more similar, the more accurate the benchmarking results.... Taking short cuts in the collection and evaluation of pertinent data, subjects benchmarking results to criticism the process was imprudent."

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)]

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?"

MassMutual Settles Excessive Fee Lawsuit

"The settlement agreement ... allows for two settlement classes to be approved: [1] the Monetary Relief Class and [2] the Structural Changes Class. The Monetary Relief Class covers current and past retirements plan customers of MassMutual, while the Structural Changes Class covers current and future retirement plan customers of MassMutual.... [T]he lawsuit brought by MassMutual's own employees is not affected by this lawsuit[.]" [Goldenstar, Inc. v. MassMutual Life Ins. Co., No. 11-cv-30235-MGM (D. Mass., settlement agreements part 1 and part 2 filed Oct. 31, 2014)]

Supreme Court Grants Cert in Tibble v. Edison International

"[T]he Supreme Court [had] requested the opinion of the Solicitor General of the United States along with the Department of Labor in asking whether cert should be granted for the two issues that Plaintiffs sought to have heard. The first, regarding the six year statute of limitations found in ERISA was granted after the Solicitor General recommended that the Court take the case[.]"

John Hancock Dodges ERISA Class Action

"The cases are holding with few exceptions that the functional fiduciary test under 3(21)(A)(i) must show that the fiduciary actually exercised their discretion. In decisions in favor of AUL and John Hancock, the plaintiffs were unable to show that. In decisions against Transamerica, MassMutual, and ING, the plaintiffs were able to either show the exercise of discretion or that it was a issue of fact for trial.... The open question from these cases is whether 3(21)(A)(iii) requires the actor to actually exercise their discretion or not, i.e. it's a fiduciary breach to be both malfeasant and nonfeasant."