COLLECTED WISDOM™ on Fiduciary Related News and Intelligence

These are general fiduciary news items. Other topical areas you may find of interest that are not fully covered here include ERISA 404(c) Compliance and Fiduciary Duty, 401k Investment Committees, Fiduciary Responsibility and Liability Issues, and DOL's Final Fiduciary Rule and Best Interests Contract Requirement.

Documentation and Review: Reminders for the ERISA Plan Fiduciaries

This article highlights specific actions that plan sponsors should take to enhance their compliance measures. These include: implementing a systematic approach for selecting and monitoring service providers, regularly reviewing and updating service provider contracts to ensure reasonable fees and transparency, ensuring that plan documents adhere to relevant state and federal regulations, gaining a clear understanding of the fees associated with administration, consulting, and plan networks, and updating contracts and procedures to address cybersecurity responsibilities.

Source: Barran.com, May 2025

Using 401k AI to Close Savings Gaps With Fiduciary Fixes

Using 401k AI to address retirement savings gaps shows significant potential but also brings increased fiduciary responsibilities. Many participants are unprepared for retirement, with savings disparities often tied to demographic factors that may go unnoticed without detailed analysis. AI can help identify these hidden gaps, and fiduciaries are increasingly tasked with utilizing these insights to implement targeted solutions that ensure equitable retirement outcomes for all employees.

Source: Fiduciarynews.com, May 2025

Fiduciary Update: May 2025

Every quarter, CAPTRUST Financial Advisor Drew McCorkle assesses the latest legislation and litigation pertinent to the fiduciary responsibilities of retirement plan sponsors. In this quarter's review, you'll find insights on the Supreme Court's ruling concerning prohibited transaction claims, a Presidential Action aimed at banning retirement plan investments in companies deemed foreign adversaries, an unusual ERISA jury verdict, and additional key updates.

Source: Captrust.com, May 2025

Kaleda Comments on Fiduciary Responsibility

David Kaleda, principal at Groom, stresses the importance of fiduciaries staying vigilant and proactive in fulfilling their responsibilities during times of market volatility. He explains, "Market fluctuations often lead participants to have numerous questions and concerns, which can be alleviated through effective communication and a strong investment education strategy."

Source: Groom.com, April 2025

401k AI Fiduciary Traps Spark ERISA Questions

Plan sponsors and service providers shouldn't expect AI tools to create 401k miracles without careful due diligence. Relying on AI for 401k administration can be risky. AI can improve efficiency and personalize services, but it also poses fiduciary traps, such as compliance risks from biased or inaccurate outputs. The key is balance: AI offers benefits but requires rigorous oversight to prevent costly fiduciary errors.

Source: Fiduciarynews.com, April 2025

Facing a Chaotic Market: Reminders and Recommendations for Retirement Plan Fiduciaries

In today's volatile markets, it's crucial to review your 401k fiduciary process to ensure that both you and your employees are making sound decisions in compliance with ERISA regulations. When the markets are performing well, participants often neglect underlying structural issues within the plan, focusing instead on growing their account balances. Conversely, during downturns, participants -- particularly those approaching retirement -- may seek to address potential shortcomings in the retirement plan to recover from market losses. Keeping this in mind, here are five strategies to safeguard yourself and your retirement plan.

Source: Barran.com, April 2025

DOL Must Issue ERISA Guidance on "Foreign Adversary" Investments

On February 21, a presidential memorandum instructed the DOL to update ERISA fiduciary standards regarding investments in public market securities from "foreign adversary companies." This directive is part of the Trump administration's America First Investment Policy, which seeks to promote foreign investment while safeguarding national security. The article discusses potential questions that sponsors and fiduciaries of defined benefit and defined contribution plans, as well as welfare plans like VEBAs, may have regarding the upcoming guidance, though it notes that no immediate action is required from them at this time.

Source: Mercer.com, April 2025

401k Plan Sponsor Questions Most Forget to Ask

Many questions about 401k plans often go unasked, even though the sponsors of these plans have important responsibilities to manage them properly. By asking these important questions ahead of time, sponsors can help improve the financial security of the people who participate in the plan and also protect themselves from any risks that come from not fulfilling their duties.

Source: Fiduciarynews.com, April 2025

Navigating the Shifting Fiduciary Landscape: Podcast

Todd Solomon was a guest on the 401k Roundtable podcast, hosted by Rick Unser. In the episode, they discussed the evolving fiduciary landscape and trends in ERISA litigation, along with the impact of the Trump administration on the DOL. Todd emphasized the importance of balancing loyalty and prudence in fiduciary duties, considering participant demographics in plan decisions, and the challenges plan sponsors face when assessing cost versus value, especially regarding investments like target-date funds.

Source: Employeebenefitsblog.com, April 2025

Mergers and Acquisitions Guide to 401k Plans: A Stock Sale

In the event of a merger or acquisition, it's crucial to assess the implications for retirement plans early in the negotiation process. Key steps include discussing the retirement plan's intent with legal counsel and the acquiring entity, as well as reviewing the plan documents to understand the treatment of related employers. Collaborating with a knowledgeable consultant and legal advisors can help identify the best solutions for both the business and its employees, ensuring a smooth transition. The article outlines general considerations and actions relevant to a stock acquisition where one company acquires another, both of which have 401k or other qualified retirement plans.

Source: Sequoia.com, April 2025

Plan Sponsor and RIA Alert: Navigating the 78(3) Fiduciary Liability "Gotcha"

The duty of loyalty for fiduciaries includes a responsibility to disclose all material facts they know or should know. The author suggests that if a plan sponsor, RIA, or other investment fiduciary is not aware of this duty under ERISA (specifically section 78(3)), it raises concerns that proper investigation, evaluation, and disclosure of material facts were neglected. This is particularly problematic in the annuity industry, which is known for its lack of transparency, making it unlikely that annuity issuers provide essential information on costs, spreads, or risks associated with specific annuity products.

Source: Fiduciaryinvestsense.com, April 2025

Fiduciary Duty Meets Stewardship: Aligning Compliance With Care

In this podcast, Todd Solomon, an attorney with McDermott Will & Emery, delves into the changing fiduciary landscape, recent trends in ERISA litigation, and how the current administration is influencing the Department of Labor. He also highlighted the shifting expectations surrounding fiduciary responsibilities. Key discussions revolved around finding the right balance between the duty of loyalty and prudence, the influence of participant demographics on plan decisions, and the challenges that plan sponsors encounter when balancing cost versus value, particularly in the selection of investments such as target date funds.

Source: Mwe.com, March 2025

Don't Forget the Disclosures: What's Required to Keep Plan Participants and Beneficiaries Informed

This educational fiduciary training webinar emphasizes the responsibilities needed to keep participants and beneficiaries well-informed. Tailored for committee members and fiduciaries engaged in retirement plan management, the session explores crucial elements of employee engagement, necessary disclosures, and effective fiduciary governance practices. Key topics covered include: Understanding Fiduciary Responsibilities, Required Disclosures, Optional Engagement Strategies, Digital and Paper Notices, and Selecting Service Providers.

Source: Multnomahgroup.com, March 2025

The Thing You Have to Fear as a 401k Plan Sponsor

In his inauguration speech, Franklin Delano Roosevelt famously stated, "the only thing we have to fear is fear itself." However, 401k plan sponsors face numerous risks beyond just fear, often without even realizing it. The article highlights the potential issues and challenges that plan sponsors must be aware of to avoid trouble.

Source: Jdsupra.com, March 2025

How Efficiency Shapes 401k Plan Administration

Professional fiduciaries managing 401k plans face the challenge of streamlining administration while ensuring compliance with complex ERISA regulations. Industry calls for efficiency clash with the need for precision, as missteps can lead to serious consequences, including costly corrections or plan disqualification. While enhancing efficiency is crucial, it should not involve cutting corners; instead, it involves creating smarter systems. Fiduciaries are increasingly adopting technology and outsourcing solutions to manage administrative tasks, raising the question of whether these tools can be effective without compromising their responsibility to plan participants.

Source: Fiduciarynews.com, March 2025

Fiduciary Risk Continues to Pose Barrier to Mass Adoption of Alts in DC Plans

The U.S. District Court for the Northern District of California has decided not to dismiss a class action complaint against The Clorox Company and its employee benefits committee concerning the 401k Plan. The plaintiff accuses Clorox of violating ERISA fiduciary duties by using plan forfeitures to offset non-elective contributions instead of lowering administrative costs for participants. The court previously dismissed the initial complaint but found the amended complaint adequately alleged breaches of loyalty and prudence under ERISA. The court noted that the plaintiff's claims of self-interest and lack of a reasoned decision-making process were plausible, allowing for an inference of liability based on motivations for loyalty and the thoroughness of decision-making for prudence claims.

Source: Plansponsor.com, March 2025

How SECURE 3.0 Could Reshape the 401k Fiduciary Regulatory Landscape and Why That's a Good Thing

401k plan sponsors and fiduciaries are facing a potential significant regulatory change with the forthcoming SECURE 3.0 legislation, designed to modernize retirement plans, boost participation, and improve financial security. This law is expected to build on prior SECURE Acts, which expanded access to employer-sponsored plans and introduced lifetime income options. Experts believe SECURE 3.0 could fill gaps in the current retirement system, ensuring greater long-term financial stability for retirees. Future changes might also involve alterations to the tax treatment of ERISA plans to incentivize saving while easing regulatory burdens on businesses, influenced by shifting political dynamics.

Source: Fiduciarynews.com, February 2025

KISS Advice to 401k Plan Sponsors

Attorney Ary Rosenbaum shares a connection between his admiration for the rock band KISS and the K.I.S.S. principle, which stands for "Keep It Simple, Stupid." They emphasize the importance of simplicity for 401k plan sponsors, suggesting that avoiding overcomplication can help protect both the plan and the sponsor from potential issues and liabilities. The article aims to highlight straightforward concepts that can assist in maintaining compliance and ease in managing retirement plans.

Source: Jdsupra.com, February 2025

Common Examples of Breach of Fiduciary Duty That Result in Litigation

Fiduciary relationships in the business world include those between trustees and beneficiaries, investment advisors and clients, principals and agents, corporate directors and shareholders, and attorneys and clients. Understanding fiduciary duties -- along with how to uphold them and the consequences of breaches -- is essential for fostering productive relationships and avoiding costly litigation related to breach of fiduciary duty.

Source: Scarincihollenbeck.com, February 2025

Most Advisers Say Bitcoin and Digital Assets Misaligned With Fiduciary Duty

A survey by CoinShares International Ltd. reveals that financial advisers are cautious about recommending digital assets to clients due to concerns about their fiduciary duty. About 62% of advisers feel that suggesting speculative assets, such as bitcoin, conflicts with their obligation to act in clients' best interests, while 79% believe their role is shifting towards risk management as clients explore cryptocurrency independently. Over half of the 250 advisers surveyed are worried that promoting digital assets might harm their relationships with colleagues. While there is a growing willingness among advisers to consider digital assets, they seek independent education on the topic.

Source: Planadviser.com, February 2025

CAPTRUST Fiduciary Update: January 2025

Every quarter, CAPTRUST Financial Advisor Drew McCorkle reviews the latest fiduciary lawsuits. In this quarter's recap, explore topics such as potential ERISA violations, conflicts of interest, proxy voting, and more.

Source: Captrust.com, February 2025

Vast Majority of 401ks Have a "Red Flag" Fiduciary or Regulatory Violation: Study

A recent analysis by Abernathy Daley 401k Consultants revealed that 84% of U.S.-based retirement plans show at least one potential ERISA red flag, indicating possible regulatory or fiduciary violations. The consultancy examined Form 5500 filings for 764,729 plans and identified over 600,000 companies at risk of fines, legal penalties, and fiduciary failures. Red flag violations are categorized into Regulatory Infraction Red Flags and Egregious Plan Mismanagement Red Flags, representing issues including infractions, fineable offenses, fiduciary failures, or plan malpractice.

Source: 401kspecialistmag.com, February 2025

Fiduciary Committees as Parties to a Vendor Contract

Practitioners often advise creating a fiduciary committee to manage ERISA-covered employee benefit plans for several reasons. By designating the committee as the responsible party for functions like plan administration, monitoring, and compliance, the governance structure aligns with the contractual responsibilities. This approach can help differentiate the committee's role from that of the company or individuals, potentially shielding them from being treated as fiduciaries to the plan and managing liability risks.

Source: Morganlewis.com, January 2025

Missing Participant Enforcement Relief Available for Fiduciaries

On January 14, the Department of Labor announced a new enforcement relief policy aimed at retirement plan fiduciaries. This policy, outlined in Field Assistance Bulletin No. 2025-01, allows fiduciaries to transfer benefit payments of $1,000 or less owed to missing participants to state unclaimed property funds without facing action under ERISA Section 404(a), provided certain conditions are met. Assistant Secretary Lisa Gomez stated that the policy offers fiduciaries an additional way to manage small outstanding retirement benefits while supporting efforts to reconnect participants with their benefits.

Source: Asppa-net.org, January 2025

Five Fiduciary Resolutions for 2025

This is the time of year when resolutions for the cessation of bad behaviors and the beginning of better ones are in vogue. Here are five for plan fiduciaries for 2025.

Source: Napa-net.org, January 2025

How Johnson v. Parker-Hannifin Impacts Professional Fiduciaries and 401k Plan Sponsors

This article examines the implications of the Johnson v. Parker-Hannifin case, which involves allegations of the company's failure to adequately monitor investments, resulting in the use of high-cost share classes. This case has significant relevance for professional fiduciaries and 401k plan sponsors. Initially dismissed by a lower court, the plaintiffs appealed, and the U.S. Court of Appeals for the Sixth Circuit found merit in their claims, subsequently remanding the case for further proceedings. The article also notes a few steps 401k plan sponsors can take to better protect themselves.

Source: Fiduciarynews.com, December 2024

Annuities Are the Antithesis of Fiduciary Prudence: Commentary

The author raises concerns about the potential fiduciary risks associated with offering lifetime income annuities in 401k plans. They question why plan sponsors consider such investments when there is no legal requirement under ERISA or other laws to include them. While some plan sponsors feel compelled to provide retirement income options for employees, the author argues that this perspective is legally misguided. They assert that employers can fulfill their fiduciary duties by ensuring that the investment options are prudent and cost-efficient without including annuities in the plan. Employees can seek annuities independently, thus avoiding additional liability for plan sponsors.

Source: Fiduciaryinvestsense.com, December 2024

Staying Off the Fiduciary Naughty List: Nevin and Fred

During the holiday season, employers must navigate the complexities of the SECURE 2.0 Act, which introduces mandatory changes such as automatic enrollment for new retirement plans starting in January 2025. Employers must be mindful of compliance, especially if their status changes regarding plan thresholds. Additionally, the selection of default investment funds is significant, along with fiduciary responsibilities concerning rollovers. While there are also provisions for correcting mistakes, it's essential to stay informed. In this episode, Nevin Adams and Fred Reish provide guidance to ensure that employers are well-prepared and compliant to avoid pitfalls associated with the legislation.

Source: Asppa-net.org, December 2024

Adding Private Equity Investment Options to 401k Plans May Be a Good Idea, for Everyone Who Is Not a Plan Participant or a Plan Fiduciary

The author argues that while pension plan sponsors who engage alternative asset managers bear both the risks and costs associated with their investment decisions, 401k plans present a different situation. Several reasons contribute to this distinction, but the author only briefly notes them here, suggesting that further discussion or deep dives into these reasons will occur later by themselves or by others.

Source: Bostonerisalaw.com, November 2024

Understanding Your Role as an ERISA Plan Administrator

ERISA Plan administrators and sponsors serve as fiduciaries, carrying a legal obligation to uphold the highest standards of care and service for plan participants. Due to the critical nature of the retirement assets they manage, the Department of Labor demands exceptional standards and accountability from these fiduciaries. To assist in adhering to these complex regulations, a set of best practices has been outlined here to ensure that plans meet these high expectations.

Source: Cshco.com, November 2024

Captrust Fiduciary Update: August 2024

In this installment of the quarterly Fiduciary Update, Captrust's Financial Advisor Drew McCorkle reviews the flow of cases related to recordkeeping, fees, cybersecurity, beneficiary designations, and more.

Source: Captrust.com, August 2024

Benchmarking Outcomes, Not Fees

There are substantial efforts underway in many parts of the industry to develop similar sorts of benchmarking tools for assessing, comparing, and monitoring the growing variety of lifetime income programs for DC plans. A very real challenge these developers face arises from the fundamental difference in the nature of the investments involved. Even the language used to produce these new tools is demanding a new mindset.

Source: Businessofbenefits.com, August 2024

Experts Outline Strategies for Investment Menu Design

Developing and maintaining a plan's investment menu is a key fiduciary responsibility. Industry experts offer their insights into factors and steps to consider in performing that function. In a Plan Sponsor Council of America webcast "The Art and Science of Investment Menu Design," experts offered their insights on strategies for designing an investment menu that will best serve participants and address their needs and concerns.

Source: Asppa.org, July 2024

Evonik Corporation Beats 401k Plan Challenge With Evidence of Rigorous Fiduciary Process

A New Jersey federal district court recently granted summary judgment in the defendant's favor in an ERISA excessive fee case accusing Evonik’s 401k plan fiduciaries of keeping imprudent investments in the plan and of allowing participants to pay excessive recordkeeping fees. At the core of the decision was the court’s finding that Evonik's fiduciaries followed a rigorous, prudent process for reviewing plan investments and fees.

Source: Erisalitigationadvisor.com, July 2024

Preparing for Your First Retirement Plan Audit

Few things can feel as daunting as preparing for an audit, especially if it's your first time being audited. With all the information circulating about new laws and regulations dictating who is required to undergo an audit, compliance issues can become even more complicated. Here are some considerations to help you as you prepare for a retirement plan audit.

Source: Berrydunn.com, July 2024

What Plan Sponsors Should Know About DOL's Final Fiduciary Rule

While the direct effect of the DOL's final fiduciary rule on plan sponsors appears modest, plan vendors may decide to modify their service models -- including associated fees -- and sales practices. This is a comprehensive review of the rule including implications for plan sponsors.

Source: Mercer.com, June 2024

401k Plan Sponsor Fiduciary Best Practices For Lost Or Missing Plan Participants

When plan sponsors have lost contact with 401k plan participants, they must address several key questions. The DOL has recently asked for input on its proposal to deal with lost or missing plan participants. But the idea of a participant being missing or lost is less black and white than it seems.

Source: Fiduciarynews.com, June 2024

Nine Insurance Trade Groups File Suit Against DOL's New Fiduciary Proposal

The DOL went into the Memorial Day weekend with a fresh lawsuit seeking to undo its Retirement Security Rule filed by nine insurance trade associations. The associations filed the suit in the U.S. District Court for the Northern District of Texas, which is within the jurisdiction of the Fifth Circuit Court of Appeals. The associations cited the Fifth Circuit in the complaint because several years ago the court overturned a prior rule DOL intended to change the definition of what it means to give fiduciary advice for retirement investments.

Source: Planadviser.com, May 2024

Unpacking the DOL's Final Retirement Security Rule: A Guide for Plan Sponsors

The DOL's recent final Retirement Security Rule has significant implications for plan sponsors and fiduciaries. At the heart of this rule is the amended Prohibited Transaction Exemption 2020-02, which provides relief from prohibited transaction treatment for conflicted fiduciary advice, subject to stringent conditions. As a plan sponsor, it's crucial to understand how this PTE impacts your fiduciary duties and responsibilities. This comprehensive analysis delves into the details of PTE 2020-02.

Source: Octoberthree.com, May 2024

Thinking in Bets: Using Behavioral Psychology to Improve Fiduciary Prudence: Opinion

The author writes, "I am still waiting for someone to truthfully explain to me how a product is in the best interests of a plan participant and their beneficiaries when that product requires the annuity owner to surrender ownership of the annuity contract and the accumulated value to the annuity issuer in order to receive the contractual alleged, with no guarantee of the investor receiving a commensurate return, incur excessive, and often counterintuitive, fees, potentially reducing an investor's end-return by one-third or more, and forego any estate plans of providing any remainder interests for one's heirs."

Source: Fiduciaryinvestsense.com, April 2024

Several New Reasons Employers Should Self-Audit Retirement Plans

Employee benefit plans must be reviewed regularly to determine whether there are compliance errors that need to be corrected before there are major correction costs and penalties. There are many reasons why doing self-audits of both tax and fiduciary compliance makes sense and provides retirement plan fiduciaries with protection. Here are four of them.

Source: Cohenbuckmann.com, March 2024

Defendants in ESG Litigation File Motion for Summary Judgment

On February 26, 2024, defendants in Spence v. American Airlines filed a brief in support of a motion for summary judgment. Defendants' motion comes just days after the court had handed down a decision denying defendants' motion to dismiss. In this article, the authors review the defendants' arguments in this case, mainly because they usefully raise the issues of proof and causation that vex challenges to the prudence (and loyalty) of certain proxy voting positions. They begin with a more abstract discussion of challenges to fiduciary proxy voting decisions, as a way of framing the specific arguments, and then try to get an understanding of what is going on in Spence.

Source: Octoberthree.com, March 2024

Plan Sponsor Attitudes Toward Retirement Plan Management and Fiduciary Outsourcing

This 18-page study measured how retirement plan sponsors view 3(16) fiduciary outsourcing as a tool to help them better manage their retirement plans. It also captured plan sponsor perspectives on how such outsourcing can help drive improved plan outcomes. The study was conducted in January 2024.

Source: Pentegra.com, March 2024

Slide Deck From Presentation on the DOL's Fiduciary Rule: The Impact on Recommendations of Annuities

Faegre Drinker discusses the DOL's proposed fiduciary regulation and its amendments to Prohibited Transaction Exemptions 84-24 and 2020-02 and their anticipated impact on annuity sales. These proposed rules, to be finalized this year, will impose significant requirements on recommendations of annuities to retirement investors -- ERISA and tax-qualified private-sector retirement plans, participants and IRA owners -- including recommendations for rollovers and transfers.

Source: Faegredrinker.com, March 2024

Tips to Keep Your Retirement Plan in Compliance

A recent survey indicates that 45% of retirement plan sponsors do not realize they serve as fiduciaries to their organization's retirement plan. All fiduciaries need to follow best practices for ensuring their plans are operating according to the rules, regulations, and governing plan documents. This process can be accomplished by creating a compliance checklist for 2024.

Source: Usicg.com, February 2024

Consultants Advise Plan Fiduciaries to Vet DC Annuity Offers

With defined contribution annuity offerings proliferating in recent years among both providers and recordkeeper platforms, retirement plan advisers and sponsors must take a close look at the options to protect themselves and their participants, according to recent commentary from an annuity consultancy. ARC consultants cite "cause to question" language that requires assessing annuity offerings for qualified plan participants.

Source: Planadviser.com, February 2024

How to Teach Fiduciary Responsibility to Plan Committees

Sponsors of retirement plans, especially those covered by ERISA, must ensure their retirement plan committee members are trained to understand and execute their fiduciary duties. To do so, plans find fiduciary education and training from regulators, existing providers, and a wide variety of sources.

Source: Plansponsor.com, February 2024

Forfeiture Litigation Raises New Issues for Plan Fiduciaries

Groom Law Group's George M. Sepsakos covers allegations and potential implications of recent lawsuits against plan fiduciaries related to the use of plan forfeitures.

Source: 401kspecialistmag.com, January 2024

401k Fiduciary Warning: This Is How the Supreme Court's Chevron Decision Might Impact the Retirement Plan Industry

The nation's highest court heard arguments involving the National Marine Fisheries Service. It seems they don't appreciate the government requiring fishing companies to pay certain regulatory costs. This concept is allowed under a 1984 Supreme Court decision involving Chevron. Overturning Chevron will not only impact the fishing business but all regulated activities, including the retirement plan industry. There are some immediate ramifications for plan sponsors and they will need to pay close attention to events as they unfold.

Source: Fiduciarynews.com, January 2024

Bitcoin and Brokerage Windows: A Risk for Fiduciaries?

Now that the ETFs have been approved by the SEC, what does this mean for plan sponsors? Michael Kreps, a principal in Groom Law Group, says that guidance issued by the DOL in March 2022 cautioning sponsors against using cryptocurrency in plans governed by ERISA is "still good agency guidance." The guidance says that "the Department has serious concerns about the prudence of a fiduciary’s decision to expose a 401k plan's participants to direct investments in cryptocurrencies." It refers to them as "speculative and volatile" and notes valuation and regulatory concerns.

Source: Planadviser.com, January 2024

Podcast - Year-End Fiduciary Focus: Best Practices for Employers

As 2023 comes to an end, the responsibilities of employers and fiduciaries take center stage in ensuring the financial well-being of employees and the overall success of retirement plans. It's a critical juncture where strategic decisions can make a profound impact. Ensuring you understand your fiduciary obligations and year-end considerations is essential. Discover how you can elevate fiduciary standards, benefiting employees, and your organization with this future-focused discussion shaping your approach to retirement planning and fiduciary responsibilities.

Source: Hubinternational.com, December 2023

Federal Court Upholds DOL's Final ESG Rule for Plan Fiduciaries

A Texas federal judge recently upheld a DOL final rule concerning environmental, social, and governance considerations in investment decisions by plan fiduciaries. Nonetheless, plan sponsors should understand that considering ESG factors remains permissible rather than compulsory and always should be secondary to the plan's financial interests.

Source: Hallbenefitslaw.com, December 2023

Bed Bath & Beyond, Bankruptcy, and Fiduciary Litigation

In September 2023, former employees of Bed Bath & Beyond sued members of the company's 401k committee, the committee responsible for the prudent management of the company's 401k plan. The former employees allege they lost more than $5 million following the company's bankruptcy filing in April 2023, a loss the committee could have avoided. Here is a cautionary tale of Bed Bath & Beyond's bankruptcy.

Source: Woodruffsawyer.com, November 2023

A Victory for Plan Fiduciaries: The Second Circuit Clarifies the Pleading Standard for Prohibited Transaction Claims

For years, courts have struggled with the appropriate standard to apply to ERISA-prohibited transaction claims at the pleading stage. In Cunningham v. Cornell University, a case that involved a 403b defined contribution plan, the Second Circuit addressed the pleading standard necessary to sufficiently allege a party-in-interest prohibited transaction claim. The Second Circuit issued a well-reasoned opinion that may have significant implications for ERISA-prohibited transaction claims at the pleading stage.

Source: Groom.com, November 2023

Fred Reish on the New Fiduciary Rule: The Fiduciary Definition of Fiduciary

This post discusses the "fiduciary acknowledgment" definition of fiduciary invest. advice in the DOL's proposed fiduciary regulation. More specifically, the proposed regulation says that a person will be an ERISA and Code fiduciary if "The person making the recommendation represents or acknowledges that they are acting as a fiduciary when making investment recommendations."

Source: Fredreish.com, November 2023

A Guide to the DOL's Retirement Security Rule Proposal

The DOL's new "retirement security rule" package is the latest chapter in an almost 15-year effort by the DOL to amend the five-part test in its 1975 regulation for determining whether a person is a "fiduciary" by providing invest. advice for a fee. Very generally speaking, the Proposed Rule would significantly expand the circumstances under which a person could be treated as providing invest. advice that is subject to ERISA's fiduciary standards.

Source: Erisapracticecenter.com, November 2023

Understanding Excessive Fee Litigation Risk in Retirement Plans

Plaintiff firms continue to be creative in bringing forth fiduciary claims against organizations and those who oversee their retirement programs. It's not enough to just have the right insurance coverage. Organizations need to institute the right internal governance processes to manage their fiduciary liabilities and risks.

Source: Newfront.com, October 2023

The Future Is Now for ERISA Fiduciary Duties Around Plan Data

ERISA needs to catch up with the information age by identifying plan data as a plan asset, resolving the current ambiguity on that point that has led courts to decide otherwise, and developing the related fiduciary duties, argues Michael Schloss of The Wagner Law Group.

Source: Wagnerlawgroup.com, October 2023

Why Smart Fiduciaries Avoid Annuities

In the current campaign by annuity advocates to increase the use of annuities within 401k and 403b plans, the advocates argue that plan participants desire guaranteed income for life. But do plan sponsors and plan participants understand how such annuities work and the associated costs involved? As the late fee-only insurance adviser Peter Katt used to caution, "But at what cost?"

Source: Fiduciaryinvestsense.com, September 2023

Why a Meaningful Benchmark Is Needed in the Intel Investment Imprudence Case to Prevent a Hindsight Attack Against Fiduciaries

Participants label Intel's use of hedge funds and alternative investments to hedge volatility as "institutional gambling," but compare the results to funds with higher-equity allocations that ironically are higher-risk investments. Just because the higher-risk funds did better in a long bull-market is not evidence of fiduciary imprudence, but rather the classic deficiency of ERISA malpractice lawsuits that use outcomes as a proxy for fiduciary imprudence.

Source: Euclidspecialty.com, August 2023

Prudent Plan Governance Essential in Defense Against Fiduciary Breach

Although retirement plan excessive fee cases remain an ongoing concern for plan sponsors, the recent jury trial victory for Yale in Vellali v. Yale University provides hope for plans with strong, prudent plan governance. Given the pace of new excessive fee lawsuits and the verdict in Yale, plan sponsors should review their plan governance procedures as soon as possible for compliance with the roadmap outlined here.

Source: Dwt.com, August 2023

Ideas From "Beyond Fiduciary" Hint at the Future of 401k

The antiseptic compliance regime spelled out by the DOL and ERISA has to date defined fiduciary services. Perhaps, if we're going to consider what is "beyond" that sterile definition, we might want to go back to the future. In a sense, rediscovering where "fiduciary" initially came from might suggest where it is headed.

Source: Fiduciarynews.com, August 2023

Qualified Retirement Plan Considerations in Corporate Transactions

Notwithstanding the current economic uncertainty, corporate transaction activity has remained steady, meaning buyers continue to address issues relating to a target company's qualified retirement plans, such as a 401k plan. Treatment of a target company's 401k plan affects both employers and employees, so, ideally, parties in a transaction will consider preferred strategies well in advance of closing. This article discusses two approaches: terminating the plan or maintaining it after the transaction.

Source: Ogletree.com, July 2023

What is a 401k Fiduciary: Key Responsibilities & Dutie

This guide explains everything you need to know about being a 401k fiduciary. This includes understanding your legal responsibilities and finding ways to reduce your liability and make compliance easier for your plan.

Source: Forusall.com, July 2023

Are All ESG Investments Imprudent? A Plaintiff Suing American Airlines Says Yes

Politically-motivated lawsuits were filed earlier this year to invalidate the Biden administration's ESG regulations. The plaintiffs in these lawsuits don't even claim specific losses from having made ESG investments. After that, it seemed that it was only a matter of time before the first lawsuit against a corporate plan sponsor was filed. Now we have one. A new lawsuit targets American Airlines and aggressively challenges its 401k ESG investment offerings.

Source: Cohenbuckmann.com, June 2023

Plan Sponsors Should 'Definitely' Have Cyber Liability Insurance: Lisa Gomez

At PSCA National just last week, ARA CEO Brian Graff and EBSA Assistant Secretary Lisa M. Gomez discussed a wide range of topics, including the many misunderstandings about cyber liability insurance (which could be a huge fiduciary failure) and the ESG rule.

Source: Napa-net.org, May 2023

A New Fiduciary Standard?

Resistance to retirement plan innovations (like automatic enrollment) has long been excused as being too paternalistic, but there might be a better standard -- a maternal standard of care.

Source: Napa-net.org, May 2023

Why More Advisers Are Assuming 3(38) Role, Responsibility

ERISA Section 3(38) fiduciary designation can often mean more work for an adviser since it assigns decision-making responsibility. It also means a conversation with a plan sponsor that likely leads to a higher fee. Even so, the industry is trending toward more advisers seeking, and taking on, the role of the 3(38) to manage what are increasingly complex, and important, investment strategies.

Source: Planadviser.com, May 2023

Advisers Recommend Fiduciary Outsourcing Services, Mostly for Small Plans

Plan advisers often recommend that clients use fiduciary outsourcing services, alleviating the administrative burden on both advisers and clients, according to new industry research. More than 20% of advisers said clients spend between a quarter and half of their time on plan administrative tasks that could be outsourced.

Source: Planadviser.com, March 2023

Court Overturns DOL Guidance on Rollover Advice

A federal court has vacated part of the 2021 DOL rollover guidance for investment advice fiduciaries. In one of those FAQs, DOL said a recommendation to roll over a participant's retirement plan account to an individual retirement account may be fiduciary investment advice when the advisor expects to give ongoing advice after the rollover. According to the court, this guidance contradicts the agency's current regulation.

Source: Mercer.com, March 2023

DOL's ESG Rule Attacked on Multiple Fronts

In recent weeks, opponents of the DOL's ESG rule have brought new challenges in the courts and Congress. Most of the provisions of the DOL's final rule addressing fiduciary duties for ERISA retirement plans concerning investment selection and consideration of ESG factors as well as exercises of shareholder rights, which the agency issued last fall, became effective as of January 30, 2023.

Source: Ropesgray.com, February 2023

Dialing Up the Intensity of Missing Participant Searches

Understanding how (and when) to increase the intensity of a missing participant search is vital to fulfilling a plan sponsor's fiduciary duty to ensure that plan participants receive the retirement benefits that they're owed.

Source: 401kspecialistmag.com, February 2023

Fiduciary Concerns Continue to Stymie Annuities in 401ks

Employers have embraced 401k plan benefits changes for 2023, but are still shying away from annuities, according to Alight. Survey data showed that among employers, 47% cite fiduciary concerns as a major reason for not adding annuities. The figure has remained stagnant since the 2018 report, Alight found.

Source: Planadviser.com, January 2023

Five New Year's Resolutions for 401k Plan Fiduciaries

This is the time of year when resolutions for the cessation of bad behaviors and the beginning of better ones are in vogue. Here are three for plan fiduciaries for 2023.

Source: Napa-net.org, January 2023

A Checklist for Your Retirement Plan Fiduciary Insurance Renewal

In response to the continued proliferation of lawsuits against retirement plan fiduciaries, fiduciary liability insurers are raising rates, limiting coverage, and expanding their due diligence of fiduciary processes. This article provides a checklist that includes tips and best practices for policyholders to ensure they are in a strong position to obtain retirement plan fiduciary coverage when it comes time to review and avoid coverage denials when it comes time to pay benefits.

Source: Bradley.com, December 2022

ERISA Fiduciaries May Consider ESG Factors in Selecting Investments and Exercising Shareholder Rights

This final rule effectively overturned two rules published in the last months of the Trump administration, which essentially prohibited the consideration of ESG factors when ERISA fiduciaries selected investments or exercised shareholder rights. In effect, the Biden administration has now enabled fiduciaries managing ERISA funds to consider "factors [that] may include the economic effects of climate change and other ESG considerations on the particular investment or investment course of action."

Source: Mintz.com, December 2022

Crypto Craze Cracks, Raising Potential 401k Fiduciary Liability?

Oops! That didn't go as planned. A major player in the cryptocurrency world took a spectacular nosedive amidst celebrity, politics, and intrigue. This happened as the hard-to-understand virtual currency has already suffered from a series of negative headlines. The collapse of FTX only makes it worse.

Source: Fiduciarynews.com, November 2022

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