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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 and Fiduciary Responsibility and Liability Issues.

    

Senate Democrats Push Back on DOL Fiduciary Plan

Summary: The Obama administration plan to tighten rules on brokers is facing blowback from the president's own party. Key Senate Democrats met this week with Labor Secretary Tom Perez to argue that his plan could backfire and make it harder for consumers to get investment advice.

Source: Thinkadvisor.com, April 2015

Department of Labor Issues Sweeping Fiduciary Rule Proposal

Summary: Labor Secretary Thomas Perez described the sweeping proposal as follows: "This boils down to a very simple concept: if someone is paid to give you retirement investment advice, that person should be working in your best interest." Yet, the more than 120-page proposed rule is far from simple. Its requirements and impact on access to advice about retirement savings accounts are far from certain.

Source: Littler.com, April 2015

Execs See Fiduciary Proposal as Complicated, Costly

Summary: Early assessments of the Department of Labor's fiduciary proposal find the new rules will be complicated to implement and costly for the industry, according to wealth management executives. Answering questions during recent earnings calls, industry CEOs and other leaders found themselves peppered with questions from analysts asking about the impact a new rule may have on the bottom line.

Source: Financial-Planning.com, April 2015

DOL Not Budging on Fiduciary Rule Comment Period

Summary: Labor Secretary Thomas Perez indicated Thursday that his department will not extend further the 75-day comment period for its redraft to amend the definition of fiduciary under the Employee Retirement Income Security Act.

Source: Thinkadvisor.com, April 2015

The New Fiduciary Regulation Proposal, Part I: All It Was Cracked Up to Be?

Summary: This five page document gives a quick outline of what the DOL's new fiduciary proposal does, along with our first impressions. It concludes that "the industry are approaching the proposal with caution and, perhaps, some level of optimism."

Source: Ihflaw.com , April 2015

Re-Proposed Definition of a Fiduciary Widely Prohibits Personalized Investment Assistance

Summary: The framework set up by the DOL could work conceptually, but in its current form, it would have the same effects as the original 2010 proposal -- cutting off the option for low and middle-income individuals and small businesses to receive personalized investment assistance.

Source: Davis-Harman.com , April 2015

Will Brokers Bow to Higher Fiduciary Standard?

Summary: One of the most hotly debated topics in wealth management is the role of the stockbroker. The DOL entered the fray by unveiling a plan to make registered representatives of brokerages meet the same standard as those overseeing client accounts at registered investment advisers. Still, any shake-up hinges on politics, with lobbyists for the brokerage industry seeking to soften the blow.

Source: Institutionalinvestor.com, April 2015

Why Exactly DOL's Latest Action Is So Shocking to So Many Brokers

Summary: The DOL unveiled its much anticipated conflict of interest rule for retirement investment advice. The financial services industry has been anticipating stiff 401k rules for years. Even so, the 120-page proposed rule was a shocker, carrying an IRA bombshell and a brand new "best interest standard" for brokers.

Source: Riabiz.com, April 2015

DOL Reproposes Fiduciary Rule for ERISA Plans and IRAs

Summary: The DOL issued a proposed rule defining the term fiduciary for investment advisers and brokers providing investment advice to participants or beneficiaries of ERISA-governed employee benefit plans and IRAs. The DOL also issued several new and amended versions of prohibited transaction exemptions in connection with the proposed rule. This is a comprehensive overview.

Source: Practicallaw.com, April 2015

Captrust's May Fiduciary Update

Summary: This quarter saw continuing activity in the area of cases involving plan and investment fees. Plan fiduciaries settled two significant cases and follow-on cases against Fidelity concerning float income practices were dismissed.

Source: Captrustadvisors.com, April 2015

DOL Proposes New Fiduciary Rule for Retirement Advisors

Summary: The DOL published its long awaited proposed rule addressing conflicts of interest in retirement advice. This is an overview of the proposed rule prepared by the Wagner Law Group.

Source: Wagnerlawgroup.com, April 2015

DOL's Fiduciary Proposal Preserves Advice -- But at What Cost?

Summary: While initial concerns about preserving the ability for 401k participants to work with the advisor of their choice on rollovers appear to be addressed in the new DOL fiduciary proposal, the new compliance regimen looks, according to the author, to be significant, adding cost and complexity to the process.

Source: Usaretirement.org, April 2015

DOL Seeks Comments on Proposed Retirement Advice Rule

Summary: While much of the concerns behind the DOL's fiduciary rule proposal involve conflicted investment advice to individual retirement account holders, the sweeping rule would also change how advice is provided to participants in 401k and other defined contribution plans.

Source: Shrm.org, April 2015

Game Changer: A First Look at the DOL's 2015 Conflict Of Interest Proposal

Summary: The retirement plan industry has been waiting for an updated definition of fiduciary regulation from the DOL since 2010. On April 14, 2015, we got it and, at first glance, it's a game-changer. The purpose of this article is to provide a technical, "first glance" overview of the proposal and some early thoughts about possible ramifications.

Source: Napa-net.org , April 2015

A First Look at the DOL's Revised Fiduciary Rule

Summary: U.S. Secretary of Labor Tom Perez introduced the DOL's proposed new fiduciary rule which will expand the types of retirement investment advice covered by fiduciary protections. Here is our first look at the proposal.

Source: 401khelpcenter.com, April 2015

SEC's Commitment to Tougher Broker Rules Questioned

Summary: The Institute for the Fiduciary Standard said Thursday it has doubts about the SEC's ability to formulate a fiduciary standard that will protect the interest of Americans trying to save for retirement.

Source: Benefitspro.com, April 2015

Mary Jo White's Support Nudges Fiduciary Standard Forward

Summary: The SEC Chief says she favors a standard that covers all retirement plan advisers. Plan sponsors are hopeful, despite the difficult politics.

Source: Institutionalinvestor.com, March 2015

NAPA Adopts Proactive Stance Against Fiduciary Standard

Summary: Brian Graff, executive director and CEO of NAPA, says that the retirement business has at long last come onto Washington's radar, but the increased scrutiny is exposing a series of long-standing biases against retirement advisers that he fears will ultimately make it difficult for them to provide assistance to employees who need it the most.

Source: Benefitnews.com, March 2015

SEC Aligns With White House on Need to Address Fiduciary Standards

Summary: SEC Chair Mary Jo White confirmed March 17 that the Commission will "implement a uniform fiduciary duty for broker-dealers and investment advisors where the standard is to act in the best interest of the investor."

Source: Asppa.org, March 2015

SIFMA Claims White House Figures on DOL Rule Flawed

Summary: The White House is using flawed methodology to assert that abusive trading practices are costing U.S. investors up to $17 billion a year in retirement savings, according to a report released by a Wall Street group that opposes toughening rules on brokers.

Source: Investmentnews.com, March 2015

Wall Street Seeks Wedge in Fight Against 401k Rules

Summary: There's a gap between the White House and Wall Street's main regulator over a push to tighten broker rules. To the investment industry, it's an opening to exploit.

Source: Benefitspro.com, March 2015

Bill Would Require DOL to Defer Release of Fiduciary Definition

Summary: Rep. Ann Wagner has introduced the Retail Investors Protection Act which would require the DOL to defer release of new fiduciary regulations until the SEC issues fiduciary regulations first.

Source: Ascensus.com, March 2015

Supreme Court Could Take on Case Involving Fiduciary Burden of Proof, Damages

Summary: The Supreme Court signaled its interest in taking a case questioning whether fiduciaries bear the burden of proof and whether they can be liable for monetary damages. In orders issued Monday, the Supreme Court asked for the solicitor general's opinion before deciding whether to grant the petition for review.

Source: Pionline.com, March 2015

DC Execs Expecting Big Changes From Obama Push On Fiduciary Standard

Summary: With President Barack Obama now leading the charge, a multiyear battle to update a fiduciary standard for anyone giving retirement investment advice has defined contribution plan executives and service providers bracing for big changes.

Source: Pionline.com, March 2015

The Blindsided Fiduciary: Ignorance Is Not Bliss

Summary: Alliance Bernstein recently released the shocking result of a survey it had taken of plan sponsors: a whopping 37% of those fiduciaries surveyed didn't know that they were fiduciaries. It is possible to be an ERISA fiduciary and not know it, because no acknowledgement of fiduciary status is required. Article has a short checklist of people who are or are not fiduciaries.

Source: Pensionsbenefitslaw.com, February 2015

SEC's Gallagher: Fiduciary Rulemaking a "Runaway Train"

Summary: The DOL's much-anticipated fiduciary reproposal drew intense criticism Feb. 20 from SEC Commissioner Daniel M. Gallagher. Gallagher’s comments, made at the "SEC Speaks in 2015" event, were particularly harsh. Not only regarding the potential impact of the DOL's proposed extension of ERISA's fiduciary definition, but also on the process undertaken thus far in pursuit of its implementation.

Source: Napa-net.org, February 2015

President to Move Fiduciary Rule Forward

Summary: President Barack Obama is expected to announce the DOL's proposed fiduciary rule is officially under review at the Office of Budget Management. The proposed rule would require advisors overseeing retirement plans to act under a fiduciary standard, putting client interests ahead of all other considerations when making investment recommendations.

Source: Wealthmanagement.com, February 2015

SEC Chief to Break Her Silence on Fiduciary in 'Short Term'

Summary: SEC's Mary Jo White said Friday that she would speak about her position regarding a rule to put brokers under a fiduciary mandate "in the short term," stating that it remains a priority of hers "to get the Commission in a position to make that decision" on such a rule. SEC has been providing "technical assistance" to the DOL on its fiduciary rulemaking.

Source: Thinkadvisor.com, February 2015

U.S. Chamber Examines Potential Harmful Impact of Fiduciary Regulation on Investors

Summary: In anticipation of the DOL's re-proposal of the definition of fiduciary regulation, the U.S. Chamber of Commerce's Center for Capital Markets Competitiveness and Labor, Immigration and Employee Benefits division released a white paper on the potential negative, unintended consequences of broadening the current definition of fiduciary.

Source: 401khelpcenter.com, February 2015

The Future of Outsourcing 3(16) Fiduciary Services

Summary: With the popularity of fiduciary outsourcing there has been a significant wave of new companies who will take on these delegated rolls, and recently, there has been a surge in the 3(16) Plan Administrative space. The focus of this article is on the 3(16) Plan Administrative fiduciary.

Source: Tparesources.com, February 2015

The Uninsured Fiduciary: Have You Read the Fine Print in Your Policy?

Summary: If you are a plan fiduciary and your company has purchased fiduciary liability insurance, you and your board may have simply assumed that the policy would cover any fiduciary breach. A decision just issued by a Pennsylvania court denying coverage to CIGNA is a wakeup call to carefully review such policies to determine what they do and do not cover.

Source: Pensionsbenefitslaw.com, February 2015

The Different Roles Your Plan's Advisor May Play

Summary: Is your advisor a fiduciary or a co-fiduciary for your plan? Or, is your advisor refusing to assume any fiduciary role? Is your business liable for your retirement plan's investment decisions? Is your investment advisor, your plan's investment manager? These can be confusing roles with very different impacts to your organization's retirement plan.

Source: Belr.com, February 2015

How to Satisfy the Fiduciary Duties of Your 401k Plan

Summary: If your organization sponsors a 401k or qualified retirement plan, then, as a plan trustee, you are legally responsible for the decision-making surrounding the plan. These fiduciary duties are something many plan sponsors aren't aware of. But even if trustees recognize them, they usually don't understand what the responsibilities entail.

Source: Sbnonline.com, February 2015

New Best Practices Aim to Codify Advisors' Fiduciary Duty

Summary: A coalition of fiduciary advocates has unveiled a set of best practices for advisors that they envision could eventually become an industry certification, providing consumers with an easily recognizable designation that a financial professional is bound to act in their best interest.

Source: Onwallstreet.com, February 2015

The White House Puts Its Best Obamacare Minds Behind Cleaning Up the 401k Business

Summary: It took forever to come but The White House has endorsed a very intense fiduciary standard with a withering attack on the way financial advice is currently applied to the savings of retirees.

Source: Riabiz.com, January 2015

Fiduciary Best Practices Proposed

Summary: The Institute for the Fiduciary Standard has proposed eleven "Best Practices" fiduciaries should meet to serve the best interest of their clients. They are reproduced here and the Institute is seeking comment.

Source: 401khelpcenter.com, January 2015

NAPA Takes Position Against DOL's Fiduciary Rule

Summary: This month, the DOL is expected to propose a "fiduciary rule" for financial advisors that provide investment advice to retirement plans. It is the authors opinion that, "when you pay a financial advisor for investment advice, they should work in your best interest and not theirs." But, a growing number of powerful industry groups disagree.

Source: Employeefiduciary.com, January 2015

Why Brokers Should Be Bound to a Fiduciary Duty

Summary: It would be highly controversial for Obama to impose the higher legal standard, called a fiduciary duty, on brokers. Wall Street will hate the requirement that brokers act solely in a client's interest or risk getting sued, and will probably ask Congress to overturn it.

Source: Benefitspro.com, January 2015

Can a Fiduciary Duty for Investment Advisers Co-Exist With Commissions?

Summary: Legislative and regulatory consultant Duane Thompson writes, "Given the premise that a fee arrangement is inextricably bound with the fiduciary standard, it would seem logical to assume that a salesperson working on commission cannot be a fiduciary. However -- spoiler alert -- you would be wrong. That is not to say that working on a commission basis and serving the client's best interest is an easy thing to do -- it's just far more difficult, at least in legal terms."

Source: Kitces.com, January 2015

White House Memo Offers a Peek at DOL Fiduciary Strategy

Summary: The White House believes that many retirement plan participants aren't adequately protected from advisors with conflicts of interest. That's why President Barack Obama's chief economic advisor supports the DOL's effort to amend the definition of fiduciary in retirement plans.

Source: Thinkadvisor.com, January 2015

White House Takes Aim at Fiduciary Duty

Summary: One of President Barack Obama's top economic advisers said abusive trading practices are costing workers billions of dollars in retirement savings each year and called for stricter rules on Wall Street brokers.

Source: Investmentnews.com (free registration may be required), January 2015

Bracing for Battle Over Fiduciary Rule

Summary: If the Department of Labor releases a conflict of interest rule that is an echo of its original proposed expansion of the fiduciary standard, it will be met with "swift and strong legislative action." That was the prediction from Lee Covington, VP and general counsel for the Insured Retirement Institute, based on his reading of lawmakers' views in recent weeks.

Source: Benefitspro.com, January 2015

Consumer Groups, Unions Push for DOL Fiduciary Rule

Summary: A new coalition of labor unions and consumer advocates has formed to help generate support for the Department of Labor’s anticipated new fiduciary standard, which would make broker-dealers beholden to the high standards of care established under the Employee Retirement Income Security Act.

Source: Benefitspro.com, January 2015

Identifying the Fiduciaries

Summary: Fiduciary duty is determined by facts and circumstances and it is not uncommon for fiduciaries to be unaware of their status. One of the first issues that will arise in breach of fiduciary duty litigation is determination of whether the defendant, in fact, owed a fiduciary duty. So what makes a person a fiduciary?

Source: Fi360.com, January 2015

Service Provider Not a Fiduciary in Negotiating Its Contract

Summary: A federal district court in Iowa dismissed a putative class action complaint brought by several 401k plan sponsors who alleged that Principal Life Insurance Company breached its fiduciary duties to the plans by charging excessive fees in connection with certain investment options and services provided to plan participants.

Source: Erisapracticecenter.com, January 2015

The Fiduciary Requirements for Selecting a Lifetime Income Provider

Summary: Little has been written about how a plan fiduciary should prudently select insurance companies and guaranteed retirement income for participants. There's a DOL "safe harbor" regulation, but it doesn't give fiduciaries a checklist for compliance.

Source: Drinkerbiddle.com , January 2015

2015 New Year's Resolutions for Plan Sponsors

Summary: Plan sponsors who intend to make New Year's resolutions need to be careful, their broken promises can get themselves in a whole lot of hot water and financial liability. This article is about what New Year's resolutions plan sponsors should make and keep in helping them minimize their fiduciary liability.

Source: Jdsupra.com, January 2015

2015's Top Ten List for Fiduciaries

Summary: As part of their annual tradition in helping retirement plan fiduciaries get started down the right path in the new year, Bryan Cave lays out a top ten list for plan fiduciaries.

Source: Benefitsbryancave.com, January 2015

Tatum "Reverse Stock-Drop" Case Has Important Lessons for Employers and Fiduciaries

Summary: Tatum v. RJR Pension Investment Committee addressed company stock sold after a corporate spin-off; plaintiffs claimed fiduciaries of the retirement plan breached their duty by selling plan-owned company stock too quickly, thereby causing the plan to miss out on windfall gains. In the article, the authors analyze the case and offer related pointers for employers and fiduciaries making investment decisions in general and those making such decisions in connection with a corporate spin-off.

Source: Mcguirewoods.com, December 2014

Regulators Can't Keep up With Change

Summary: Despite the inability of the SEC to act on what would be the most significant fiduciary rule-making action of the millennium, some big changes in the broader regulatory and competitive environment have been under way.

Source: Investmentnews.com (free registration may be required), December 2014

The New Prudent Fee Fiduciary Standard

Summary: The United States District Court for Southern District of New York has provided the long-anticipated introduction, or more specifically the judicial verification, of Vanguard's funds' fees as a comparative basis for assessing excessive of fund fees was established. While the case is not binding on other courts, the rationale used by the court is persuasive and will undoubtedly be referenced by plaintiffs' attorneys in both 401k and other cases where breach of fiduciary issues involving fee issues are involved.

Source: Prudent Investment Adviser Blog, December 2014

Investment Policy Statements in Retirement Plans: Are They Plan Documents?

Summary: In Murphy v. Verizon Commc'ns, Inc., the Court of Appeals for the Fifth Circuit was asked specifically to consider whether plan investment guidelines must be provided upon request to plan participants and beneficiaries. The Court looked at the requirements in ERISA and determined that the real question was one as to whether the investment policy statement was actually binding on the operation of the plan.

Source: Foxrothschild.com, December 2014

The Uniform Fiduciary Standard and ERISA Plans - A New Kind of Status Quo Is Emerging for Brokers

Summary: As outlined in this four page article, until new fiduciaries rules are proposed and finalized, brokers that work with 401k and other benefit plans fall under the modified version of the status quo. Those that wish to continue to be brokers may, without being considered ERISA fiduciaries, if they order their affairs under the five prong test described here. They will, however, have to adjust to the FINRA modified suitability rule, the scope of which is not clear at this point.

Source: Imca.org , December 2014

When Will the Fiduciary Reproposal Surface?

Summary: The revised guidance plan provided for the first time an expected release date for final regulations regarding a new required “guide” to accompany the disclosures that must be provided to responsible plan fiduciaries under the 408(b)(2) regulations. The final regulations are projected to be out in September 2015.

Source: Napa-net.org, December 2014

As Fiduciary Rule Stalls, DOL Advances Amicus Brief Program, Targets Providers

Summary: Recent efforts in the courts to treat service providers as fiduciaries aren't a signal that providers should worry for the safety of their nonfiduciary status, but they could be a "warning shot" that the DOL is hungry to expand fiduciary status as it continues to work on crafting its yet-to-be-released fiduciary rule.

Source: Bna.com, November 2014

The Inattentive Fiduciary: When Supervisors Don't Supervise

Summary: The DOL recently commenced legal action against a plan investment manager who caused $7 million in losses. The complaint also named members of the Retirement Committee that retained the manager, and particularly cited them for failing to monitor the investment manager and take action to correct this problem. This complaint serves as a forceful reminder to plan committee members that their responsibilities to monitor investment managers are ongoing and don't end when the hiring process is completed.

Source: Pensionsbenefitslaw.com, November 2014

ERISA Plan Service Provider Avoids Fiduciary Status - What It Means for Service Providers and Plan Sponsors

Summary: A recent Third Circuit decision (Santomenno v. John Hancock, et. al.) serves as a reminder to plan sponsors about their fiduciary duties and the need to be vigilant in monitoring fees. This article provides a brief summary of the decision and the lessons it offers both to service providers to plans and plan sponsors.

Source: Employeebenefitslawreport.com, November 2014

ERISA Fiduciary Decisions - Making Changes to Your Qualified Plan's Investment Lineup

Summary: There are multiple reasons that could prompt a fiduciary committee to consider making changes in their retirement plan's investment lineup. Poor performance, eliminating duplicate and overlapping funds, expanding investments alternatives, organizational changes at the fund manager level, evaluation of fees, etc., are all potential reasons for considering investment alternative changes. This four page article summarizes the technical requirements and recommended procedures in making changes to your plan's investment lineup.

Source: Alston.com , November 2014

Does the DOL Fiduciary Rule Level the Playing Field for Brokers?

Summary: The reproposal and finalization of the DOL's fiduciary definition rule (now expected in early 2015) will likely change things for brokers. When the rule becomes finalized, brokers will be subject to a fiduciary standard and to the conditions of several prohibited transaction exemptions. Being a broker to a 401k plan is about to get a lot harder.

Source: Fiduciaryplangovernance.com, November 2014

Target-Date Fund Outcomes Expose Fiduciaries to Risk

Summary: To help fiduciaries assess the thoroughness and the adequacy of their documentation of their processes for selecting, monitoring and communicating TDFs, fiduciaries should ask themselves how quickly and in what detail they could respond to the following letter from a participant.

Source: Investmenthorizons.com , November 2014

Two Different Business Models, Two Different Outcomes for Investors

Summary: The motivations under the non-fiduciary and fiduciary business models are vastly different, which results in the recommendation of quite different financial products for clients, writes Scott Simon, Prudent Investor Advisors, in this piece.

Source: Morningstar.com, November 2014

Employer Stock Plan Fiduciaries Can Take Liability-Shielding Measures, Attorneys Say

Summary: The Dudenhoeffer ruling, while on its face benefitting participants in employer stock plans by eliminating a common defense to suits challenging declining stock value, but the ruling also erected significant barriers for plaintiffs bringing stock-drop claims, attorneys said in a panel presentation.

Source: Bna.com, November 2014

401k Plan Sponsors Not Only Ones Affected by Adviser/Advisor Fiduciary Confusion

Summary: Is there a real difference between the terms Adviser and Advisor? Ask any 401k plan sponsor, specifically, the C-level executives with the fiduciary responsibility for managing the plan, whether there's a difference between the two terms, and, chances are, they'll roll their eyes in apathy. But not so with others.

Source: Fiduciarynews.com, October 2014

Employer Stock Plan Fiduciaries Can Take Liability-Shielding Measures, Attorneys Say

Summary: Despite killing the fiduciary-friendly presumption of prudence, the U.S. Supreme Court's decision in Fifth Third Bancorp v. Dudenhoeffer erected significant barriers for plaintiffs bringing stock-drop claims, attorneys said in a panel presentation.

Source: Bna.com, October 2014

Fiduciary Considerations -- The Post-Dudenhoeffer Era

Summary: In the past, many plans with employer stock investments have been subject to class-action lawsuits alleging a breach of fiduciary duty from holding and/or allowing further investment in employer stock after a precipitous decline in its value. A key defense for employers in these "stock-drop" cases was the so-called "Moench presumption" of prudence. This presumption meant that a plan fiduciary’s decision to remain invested in employer stock was presumed to be reasonable. In Dudenhoeffer, the Supreme Court held that there is no such presumption. In this article, Marcia Wagner discusses the implications.

Source: Wagnerlawgroup.com , October 2014

To Have an Expert or Not: A Fiduciary's Quandary

Summary: Generally, the only real requirement for someone to act as a fiduciary of a benefit plan under ERISA is that they be a "reasonably prudent person" and that they act with diligence and due care. That is the essence of ERISA Section 404. However, Section 404 includes that the measurement of care is based on a reasonable person "familiar with such matters." Thus, the law recognizes that someone could possibly have to look outside of their own knowledge in order to be acting reasonably. Author talks about what this means.

Source: Foxrothschild.com, October 2014

Borzi Taking a Back Seat on Fiduciary Rule

Summary: The leading player in the DOL's effort to raise investment advice standards for retirement plans is patiently waiting on the sidelines while her boss talks to opponents of the measure. Labor Secretary Thomas Perez has been meeting with industry representatives to hear their qualms about the measure, which would expand the definition of fiduciary under federal retirement law to include more advisers, such as brokers who sell individual retirement accounts.

Source: Investmentnews.com (free registration may be required), October 2014

Interview: Jerry Schlichter Reveals Three Ways 401k Plan Sponsors Can Avoid a Fiduciary Breach

Summary: Jerry Schlichter has made a name for himself and his firm as lead attorney on numerous cases on behalf of employees and retirees involving claims of excessive fees and fiduciary breaches in large 401k plans. Here, he talks about how plan sponsors might reduce their fiduciary liability while helping retirement savers have the best chance to enjoy a comfortable retirement.

Source: Fiduciarynews.com, October 2014

Hiring an ERISA 3(38) Investment Manager

Summary: In recent years, several high-profile lawsuits have alleged that employers violated their fiduciary duty to prudently select and monitor the investment options offered in their 401k plans. These lawsuits have targeted larger plans, but the fiduciary standards cited apply equally to both large and small business retirement plans. Because employers want to avoid 401k litigation, hiring an ERISA 3(38) Investment Manager can be the simplest way to limit 401k investment liability.

Source: Employeefiduciary.com, October 2014

Is Your QDIA Increasing Your Fiduciary Risk?

Summary: If a Qualified Default Investment Alternative is supposed to help employees, how can it increase your fiduciary risk? The QDIA is supposed to go under a due diligence screen similar to your other investments. This screen is your fiduciary liability unless you transfer the risk to a financial professional that takes on the risk of its selection, monitoring and replacement. Many financial professionals and the press say that the target date strategy is the most popular. They often then rush to recommend its use. However, what is it and what are the other choices?

Source: 401kadvisor.us, October 2014

SEC Commissioner Questions Need for Expanded Fiduciary Rule

Summary: SEC Commissioner Michael Piwowar has expressed doubts about the need to expand the "standard of care" fiduciary obligation to retail brokers. "It is not clear that changes in the regulations applicable to broker-dealers and investment advisers are necessary, including the adoption of a uniform fiduciary duty," said Piwowar.

Source: Benefitspro.com, October 2014

Employer's Fiduciary Liability in Investing Profit Sharing Contributions

Summary: A prospective client has a 401k plan. The investment of the plan's assets is directed by the participants with the exception of the employer profit sharing contribution. That is invested at the discretion of the employer. Article answers the question, "What is the employer's potential fiduciary liability with regard to the profit sharing source?"

Source: Tagdata.com, October 2014

Re-Proposal of DOL Fiduciary Advice Regulation

Summary: The DOL has pushed back the date for the re-proposal of the fiduciary advice regulation to January of next year. In addition, the SEC is working with the DOL to help determine the impact of an expanded fiduciary advice regulation on the ability of investors to continue to receive adequate investment services. Finally, the White House is also evaluating the potential impact of a regulation that expands the definition of fiduciary advice. The big question, of course, is what does all of this mean?

Source: Fredreish.com, October 2014

Steps the 401k Fiduciary Can Take to Avoid Poor Plan Design

Summary: A poorly designed 401k plan, rather than promoting employee savings, actually dampens it. Poor plan design, specifically, leakage and weak savings, is the main villain in this drama. This article reviews a number of design alternatives.

Source: Fiduciarynews.com, October 2014

The Ambushed Fiduciary: Does Authority Over a Corporate Account Cross the Line?

Summary: Corporate officers can wear two hats under ERISA: the corporate officer hat or the ERISA fiduciary hat. Actions taken wearing the corporate officer hat are traditionally not fiduciary functions. However, a recent decision from Florida, Perez v. Geopharma, Inc., crafted an interesting but flawed argument that mere authorization to sign on a corporate bank account could make an officer a fiduciary.

Source: Pensionsbenefitslaw.com, September 2014

Fiduciaries Held to Higher Standard in Proving Plan Loss Was Not Caused by Procedural Imprudence

Summary: In determining whether fiduciaries who breached duties of procedural prudence in divesting a plan of company stock actually were liable for causing the resultant loss, courts must ascertain whether another fiduciary acting prudently would have made the same decision, the U.S. Court of Appeals in Richmond has held. Accordingly, a lower court erred in focusing on whether a prudent fiduciary could have made the same decision.

Source: Wolterskluwerlb.com, September 2014

Signature Authority Can Trigger ERISA Fiduciary Responsibility

Summary: One of the most sensitive, and often misunderstood, aspects of being an executive of a company with a retirement plan is knowing when senior leaders are fiduciaries for the plan. A recent federal case added some clarity when it determined that a chief executive with signature authority over the company's finances was indeed a fiduciary.

Source: Thompson.com, September 2014

Fiduciary Advocates Push for Best Practices

Summary: Supporters of a broader and more rigorously enforced fiduciary standard are rallying behind a set of best practices they would like to see advisors and brokers incorporate into their practices.

Source: Onwallstreet.com (free registration may be required), September 2014

The Case of the Accidental Fiduciary: When a Signature is More Than Just a Name

Summary: The issue of fiduciary status is often cumbersome, because while a fiduciary can be directly named by a plan, someone can also be deemed to be a fiduciary by virtue of just having some discretionary authority. Perez v. Geopharma seems to suggest that at least some argument can be made that even company officers could be liable for fiduciary breaches.

Source: Foxrothschild.com, September 2014

Have You Seen This 'Vanity Paper' Purporting to Solve 401k Fiduciary Issues?

Summary: Two investment professionals recently had a paper published on the Social Science Research Network that has received much attention in both the industry media and the mass media. The two authors use the paper to explain why the current American retirement environment needs to be fixed and then, based in part what they see as advantages of retirement policies in other countries, make six recommendations regarding our nation's retirement policy. The reaction among industry veterans has been blunt and pointed.

Source: Fiduciarynews.com, September 2014

SEC Urged to Move on Uniform Fiduciary Rule

Summary: Advocates for stronger fiduciary rules are calling on the head of the SEC to move forward with a proposal to impose a uniform standard of care for brokers and investment advisors, even if that means pushing the rules through a divided commission.

Source: Onwallstreet.com, September 2014

Signature Authority Can Trigger ERISA Fiduciary Responsibility

Summary: Although the ERISA discretion requirement is still in limbo, CEOs and other company officers responsible for ERISA-governed plans who do not want to be plan fiduciaries should consider segregating plan assets and having only plan fiduciaries serve as signatories on the plan's bank accounts to avoid potential fiduciary liability under ERISA.

Source: Benefitsbryancave.com, September 2014

These Four Quick Fixes for ERISA Can Reduce 401k Fiduciary Stress

Summary: For all the structural problems of ERISA and its attendant IRS and DOL regulations, there are opportunities to address some issues. Article relays the views from retirement specialists across the nation on some fixes that could be made with little or no effort.

Source: Fiduciarynews.com, September 2014

Tatum v. RJR Pension Investment Committee: What it Teaches About Fiduciary Obligations

Summary: In the guise of a Fourth Circuit decision over breaches of fiduciary duty involving company stock funds, RJR Nabisco has become a touchstone for ERISA litigators as well. There are a number of takeaways and points of interest in the decision which have some interesting things to say, and to teach.

Source: Bostonerisalaw.com, September 2014

Fiduciary Guarantees -- There's Tinsel on the Tinsel

Summary: Sometimes called the fiduciary promise, industry messaging misleadingly overstates its value to plan sponsors. Words such as "guarantee" and "warranty" connote protection and security -- that sense that I can't be harmed if things go wrong because someone else has promised to protect me. In the 401k context, this generally means its "my provider -- not me-- who will be liable." But these promises fall far short of delivering plan sponsors meaningful protection from fiduciary liability.

Source: Fiduciaryplangovernance.com, August 2014

Something Else to Concern Plan Fiduciaries -- The Floating NAV Rule

Summary: The SEC has promulgated a rule addressing what it believes could be heavy redemptions of money market mutual funds in the event of economic stress. The MMF Rule intends to make information about money market mutual funds, particularly inherent risk factors, more transparent. It would behoove plan administrators and their investment advisors to reassess the type of money market mutual fund held by the retirement plan and determine if it continues to be a proper investment for the plan.

Source: Benefitsbryancave.com, August 2014

The Reckless Fiduciary: When Are Imprudent Fiduciaries Liable for Plan Losses?

Summary: A recent Fourth Circuit Court of Appeals case has established its own gloss on the ERISA rules to determine when fiduciaries who follow imprudent procedures will have to make up plan losses. The Fourth Circuit rule is based on what a hypothetical prudent fiduciary, who I will call the "prudent shadow," would have done in the same situation.

Source: Pensionsbenefitslaw.com, August 2014

The Small Things that Create the Biggest Problems for 401k Plan Sponsors

Summary: When it comes to being a retirement plan sponsor, the greatest threats in breaching fiduciary duty resulting in liability usually comes from the smallest mistakes. This article is to let you know which small mistakes to avoid.

Source: Jdsupra.com, August 2014

Who Is in Charge Here? Will the Real 403(b) Plan Fiduciary Please Stand Up?

Summary: Distinguishing who the fiduciary is within a 403(b) plan or other qualified plan is an important determination. It is a highly confused, misinterpreted and somewhat gray area in the world of retirement plan compliance. Many plan sponsors wish to forgo all responsibility and risk related to their fiduciary roles in order to avoid liability and pitfalls and would gladly delegate the role to another third-party. If and how that can be done and some common application of the role of the fiduciary is the essence of this article.

Source: Ntsa-net.org, August 2014

Process for Terminating Investment Managers Is Important

Summary: While much time is spent selecting investment managers, not nearly enough time is spent in establishing a processing for terminating such managers, says a recent paper from the Strategic Investment Group.

Source: Planadviser.com, August 2014

Do You Protect Against Vendor Conflicts of Interest?

Summary: Hidden vendor conflicts of interest can result in higher fees and unforeseen costs for the plan sponsor and plan participants, so having a system in place to uncover potential conflicts is paramount.

Source: Rolandcriss.com, August 2014

Letter to RMS About Dispelling the 3(16) Myth

Summary: The majority of plans will be using outsourced 3(16) services within a decade. Service providers that don't offer or provide due diligence on these services will lose business. MEPs and aggregated solutions are the easiest way to access 3(16) services today.

Source: Linkedin.com, July 2014


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