In this podcast, asset management partners Eric Requenez and Jessica Reece, along with benefits partner Josh Lichtenstein, discuss the advantages of collective investment trusts for asset managers in raising and investing funds. They anticipate that CITs will gain significance and complexity in the future, particularly with President Trump's backing for broader access to alternative investments within 401k and defined contribution plans, potentially unlocking substantial retirement assets.
In response to an inquiry from an advisor in Minnesota, the ERISA consultants at the Retirement Learning Center examine the possibility of transferring CalSavers accounts of a seller's employees to a buyer's 401k plan during a merger or acquisition.
In September, the DOL announced plans to revisit the definition of fiduciary adviser, intending to issue a new rule by 2026. This comes as the Retirement Security Rule, established during the Biden administration, remains under scrutiny in the 5th Circuit. The rule aimed to expand ERISA fiduciary status to one-time recommendations, such as annuity sales and rollovers. The DOL's possible actions include completely rescinding the existing rule, which would revert to the 1975 standard, or revising it (they could also continue fighting it in the courts as is, but nobody really expects that).
A federal judge has allowed complaints against Russell Investments Group LLC, which is accused of causing plan participants to lose over $100 million by placing them in its own target-date funds. However, the judge dismissed complaints against the plan sponsor, Caesars Holdings Inc. This ruling suggests that plan sponsors can reduce their fiduciary liability by delegating investment authority to a 3(38) fiduciary. Marcia Wagner, founder of the Wagner Law Group, emphasizes that as long as plan sponsors have a process to evaluate and select 3(38) fiduciaries reasonably, this delegation can protect them from liability related to investment performance lawsuits.
The lawsuit argues that the plan fiduciaries acted with a conflict of interest, despite the plan document allowing for the choice between using forfeited funds for either offsetting employer contributions or covering administrative expenses. It claims that the Duke defendants failed to implement or adhere to prudent processes for allocating these forfeited funds. The suit states that the fiduciaries consistently prioritized reducing company contributions over the best interests of plan participants, asserting that the funds would have more effectively benefited participants if used to reduce or eliminate administrative expenses instead.
The DOL recently issued Advisory Opinion 2025-04A, clarifying that a managed account-based lifetime income offering can qualify as a qualified default investment alternative (QDIA). The opinion confirms that a specific lifetime income solution, which includes annuities not designated as investment options within the plan, is eligible to serve as a QDIA. This advisory also offers reassurance for similar lifetime income strategies and may indicate increased DOL support for such offerings in the future.
The spring 2025 update of the regulatory agendas for the IRS, DOL, and PBGC includes several new items concerning retirement plans. This article focuses on key highlights, particularly regulatory initiatives connected to the Setting Every Community Up for Retirement Enhancement Act of 2019 and the SECURE 2.0 Act of 2022.
Recent lawsuits have targeted major recordkeepers like TIAA, Empower, and Fidelity, as well as other service providers, regarding their investment advice and managed account offerings for retirement plan participants. These cases highlight that investment advice qualifies as fiduciary advice, which plan fiduciaries are required to review and monitor, regardless of the delivery method (in-person, phone, or online). Plan sponsors that opt to provide managed account products must be able to explain and demonstrate how these products serve the best interests of participants to avoid potential breaches of their fiduciary responsibilities.
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Collected Wisdom™
Our researchers look for what they think are some of the better resources available to assist you in administering your plan or helping your clients. We group these resources in our COLLECTED WISDOM™ topics to make it easy for you to locate the information you need. Each item in a category contains a summary and date of when it was placed in the group.
We also maintain some older material in these collections for perspective and context.
