COLLECTED WISDOM™ on Fiduciary Responsibility and Liability Issues
This archive contains not only the most current material on the topic, but also older items that are still relevant, provide background, perspective or are germane to the topic.
If you find a broken link or an items that you feel is outdate, irrelevant or no longer appropriate, please let us know.
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 Related News and Intelligence, and DOL's Final Fiduciary Rule and Best Interests Contract Requirement.
Abstract: In seeking clarity about the "type" of 401k professional it has retained, plan sponsors often find the answers they are given to be incoherent with a slant in favor of the 401k industry instead of plan participants. The residual fuzziness plan sponsors are left feeling about this topic is a source of significant irritation to them. This comprehensive article attempts to peel back the fiduciary layers and unscramble the fiduciary fuzziness.
Abstract: The failure to fully execute the fiduciary duties ERISA imposes upon 401k plan employers and administrators can lead to significant liability exposure. This article will help plan sponsors navigate the minefield of fiduciary liability including reviewing the litigation risk and suggesting some best practices.
Abstract: Because of a number of factor including the recent class action lawsuits and a new focus by the Department of Labor and Internal Revenue Service on a number of issues including fees, plan sponsors need to be more vigilant. They also should take proactive steps to ensure that all plan fiduciaries have a good understanding of their obligations in overseeing the company's retirement plans. Here is a general overview of fiduciary duties and responsibilities.
Abstract: Fulfilling fiduciary duties is an outcome of successfully integrating processes and methodologies that require different skillsets. All major decisions should be made with only the economic interests of the plan participants in mind. Failure to do so increases the likelihood of a breach of fiduciary duty. Here is a Plan's Sponsor's road-map to successfully fulfill fiduciary duties.
Source: 401khelpcenter.com, March 2019
Abstract: This 10-page paper is intended to provide a summary of ERISA and the role of an independent fiduciary, including when an independent fiduciary must be engaged or should be engaged, the benefits associated with having an independent fiduciary and certain practical considerations.
Source: Ajg.com, February 2019
Abstract: This 17-page paper examines the potential influence that digital design can have on one's retirement savings decisions. As the use of digital and mobile technologies continues to increase, the paper proposes that plan sponsors and advisors have a responsibility to consider websites and apps that encourage better retirement decision-making, applying the same oversight and diligence that they currently utilize for plan design and investment selection.
Source: Voya.com, January 2019
Abstract: One of the most important things a company can do to properly equip its retirement plan committee members is to provide comprehensive fiduciary training. It's an important step to minimize fiduciary risk through education and governance. Furthermore, the DOL views fiduciary training as a critical element of prudent oversight and is increasingly looking for evidence that fiduciary training has been provided during plan audits. Unfortunately, formal fiduciary training is still not very common within the industry.
Source: Greenspringadvisors.com, January 2019
Abstract: As someone responsible for 401k compliance and administration at your company -- whether you're signing Form 5500 each year or just handling part of the process -- there are some very big legal responsibilities you need to be aware of. This guide walks you through everything you need to know about being a 401k fiduciary: what it means, what your legal responsibilities are, and steps you can take can to offload some of that liability and make your plan's compliance as simple and easy as possible.
Source: Forusall.com, January 2019
Abstract: 401k lawsuits are on the rise. However, the legal responsibilities associated with 401k lawsuits are not always crystal clear. Plan fiduciaries who manage and administer 401k and 403b plans struggle with knowing how to perform. There are many grey areas, and so questions persist about fiduciary duties and 401k lawsuits. A 2018 paper from the Center for Retirement Research at Boston College explores the reasons behind these lawsuits, as well as their implications for plan sponsors and the retirement industry.
Source: 401ktv.com, December 2018
Abstract: Finding missing participants can be frustrating and time-consuming, but employers and plan sponsors have the fiduciary responsibility to provide communication, statements and disclosures to them just as often as active employees. The DOL and IRS has published guidance for locating missing participants.
Source: Watkinsross.com, November 2018
Abstract: There is not a legal requirement that committee members receive fiduciary training. Instead, it's a best practice and good risk management. But, what should the fiduciary education cover? Based on an analysis of court decisions on fiduciary responsibility, Fred Reish worries that fiduciaries may not be adequately educated about their basic responsibilities and particularly their administrative oversight duties.
Source: 401kspecialistmag.com, November 2018
Abstract: This 5-page white paper is for plan sponsor representatives who desire to know more about key fiduciary issues: (1) the high standards applicable to a fiduciary; (2) a fiduciary's core responsibilities; (3) the danger of working with a non-fiduciary; and, (4) what they should expect from a strong fiduciary partner.
Source: Qualifiedplanadvisors.com, October 2018
Abstract: Fiduciary liability insurance is an important, but often overlooked, aspect of a company's risk management plan. This article discusses the use of fiduciary insurance in protecting fiduciaries from liability when governing or providing services for employee benefit plans subject to the Employee Retirement Income Security Act.
Source: Ckrlaw.com, October 2018
Abstract: One might think that there is a lower level of liability risk for plan fiduciaries where a brokerage window is available, particularly where the window supplements a menu of selected investment options, because it gives plan participants greater choice without any expectation that the fiduciaries are responsible for each investment available through the window. However, there can still be fiduciary obligations related to offering the brokerage window that, if not met, could trigger liability.
Source: Morganlewis.com, August 2018
Abstract: Plan fiduciaries of 403b plans face some unique challenges and making mistakes can expose these fiduciaries to liability. Following 403b fiduciary best practices can help reduce the risk of lawsuits and avoid ERISA compliance violations.
Source: Bsllp.com, August 2018
Abstract: The United States District Court for the District of Minnesota has, for a second time, dismissed claims by participants in the Wells Fargo 401k plan. This second decision focused on the issue of the fiduciary duty of loyalty, the court's discussion of which is thorough and interesting both in its specific application to stock drop cases and to fiduciary litigation more generally. In this article we discuss the court's opinion in detail.
Source: Octoberthree.com, August 2018
Abstract: In Meiners v. Wells Fargo & Company, the U.S. Court of Appeals for the Eighth Circuit clarified the burden plaintiffs must meet to state a claim for breach of fiduciary duty under ERISA based on the inclusion of allegedly underperforming and expensive investment funds. Because plaintiffs often lack detailed information about the process plan fiduciaries followed to make investment choices, pleading a plausible claim that those fiduciaries have acted imprudently can pose a significant challenge.
Source: Kslaw.com, August 2018
Abstract: When employees allege the employer or plan sponsor has not acted in the sole interest of the participants or followed the plan requirements, the plan sponsor may be liable for losses and damages which result. However, by following the best practices for defined contribution plan fiduciaries, plan sponsors can avoid litigation and limit potential losses.
Source: Bsllp.com, August 2018
Abstract: hey can take away the DOL's Fiduciary Rule, but they can't remove the after effects. Remember, the official name wasn't "The Fiduciary Rule." When the DOL unveiled the final version, it was rechristened "The Conflict-of-Interest Rule." The focus wasn't on some legal definition of fiduciary. Instead, the emphasis was on the dangers inherent in advice containing conflicts-of-interest. Here are some examples of self-dealing transactions that, if executed, will likely result in a fiduciary breach.
Source: Fiduciarynews.com, July 2018
Abstract: When thinking about fiduciary support services and outsourcing, really the important considerations should be about process and time management, more than fiduciary risk transfer.
Source: Planadviser.com, June 2018
Abstract: While many argue about how many financial professionals can dance on the head of the fiduciary pin, the answer to "Who is a fiduciary?" has always been there. It comes in the form of a written document called a "Limited Power of Attorney." Registered Investment Advisers, at least those with the direct authority to trade client assets, can only do so under this legal agreement. Indeed, it can be argued that fiduciary "advice" cannot be given without the existence of a Limited Power of Attorney. This makes the LPOA a very special instrument.
Source: Fiduciarynews.com, May 2018
Abstract: Given the high stakes, it is important that plan fiduciaries understand their duties and how best to fulfill them. For employers who have not yet undertaken the task, training of plan fiduciaries should be a top priority for 2018. This article reviews 10 key topics that should be included in an ERISA fiduciary training program.
Source: Thompsoncoburn.com, April 2018
Abstract: The running debate about the standards of care in the financial services industry is beginning in earnest. Pete Swisher provides a discussion of current fiduciary law and the country's options with respect to standards of care.
Source: Pentegra.com, March 2018
Abstract: According to a recent survey of DC plan executives, many don't acknowledge their role as a fiduciary. You'd think fiduciary awareness would improve over time, but the surprising fact is that fiduciary awareness seems to be declining at a time when all roads are leading to greater fiduciary scrutiny in the marketplace.
Source: Hrexecutive.com, March 2018
Abstract: Fulfilling ERISA fiduciary responsibilities is a constant challenge. Carol Buckmann has been blogging and speaking about fiduciary best practices for many years. Her guidance for fiduciaries has been compiled in a new 2018 edition of the Intelligent Fiduciary Guide.
Source: Cohenbuckmann.com, March 2018
Abstract: For those fiduciaries self-aware enough to know there are things they need to learn, here are some suggestions for ways they can raise the bar in fulfilling their fiduciary responsibilities.
Source: Cohenbuckmann.com, February 2018
Abstract: Retirement plan sponsors need to understand the increased potential liability as plan fiduciaries and the best way to understand the changes that have taken place in the 401k plan business over the last 20 years. This article will let 401k plan sponsors understand how and why they need to be more vigilant in their role as a 401k plan fiduciary.
Source: Jdsupra.com, December 2017
Abstract: As cybersecurity threats increase, so should plan fiduciary efforts to combat these threats. Fiduciaries can work with service providers to strengthen existing protections and can work internally to create and document procedures that demonstrate prudent process.
Source: Groom.com, November 2017
Abstract: This article examines the manner in which the fiduciary rule, and in particular the BIC Exemption, affect business best practices regardless of whether any changes are made to the fiduciary rule and related exemptions.
Source: Wagnerlawgroup.com, October 2017
Abstract: Retirement plan committees have a host of responsibilities, most of them fiduciary. To help them fulfill their varied, and demanding, fiduciary role, advisers can turn to a number of practical strategies.
Source: Planadviser.com, October 2017
Abstract: If there had been any doubt, the last few years have made clear that lawsuits against all parties involved with retirement and welfare plans are here to stay. Indeed, plan sponsors and fiduciaries now face increased risks of litigation on many fronts, and the need for comprehensive fiduciary liability insurance is greater than ever. This white paper discusses the responsibilities of ERISA fiduciaries and the types of litigation that may be brought against them, as well as some practical suggestions on plan design and administration that may help reduce litigation risk.
Source: Groom.com, October 2017
Abstract: Effective governance of their DC plans helps employers meet fiduciary responsibilities, abide by regulatory requirements, and minimize the risk of litigation and negative press. This 13-page report identifies ways in which committee structure, composition -- and even the number of meetings and those responsible for meeting agendas -- have important implications for the priorities, challenges, and effectiveness of DC plan governance.
Source: Callan.com, October 2017
Abstract: In the complex and litigation-prone world DC plans occupy, it is important to underline what the real focal points for fiduciaries should be. Here are five guiding principles under ERISA that can aid fiduciaries in selecting and monitoring investment options and assessing active strategies within their plan lineups.
Source: Troweprice.com, September 2017
Abstract: While the DOL has provided guidance on the overall responsibilities of plan sponsors, these guidelines fall short of speaking to best practices when dealing with recordkeepers. This 7-page paper aims to help plan fiduciaries maximize their recordkeeper relationships with the end goal of better retirement outcomes.
Source: Porteval.com, September 2017
Abstract: This article describes "impact investing" and reviews how fiduciary duties applicable to managers of pension plan assets and charitable institution assets permit and restrict the use of nonfinancial factors in managing those assets.
Source: Steptoe.com, September 2017
Abstract: If an investment adviser makes a recommendation to a retirement plan sponsor or investment manager, who then follows that recommendation and later challenges it as a breach of fiduciary duty, there are several types of defenses available to the adviser.
Source: Investmentnews.com (registration may be required), September 2017
Abstract: A common theme running through class-action lawsuits filed against plan fiduciaries is the violation caused by not properly understanding and addressing the fees of their 401k plan. The article describes three methods for determining if plan fees are reasonable.
Source: Morganstanleyfa.com, August 2017
Abstract: "Procedural Prudence" is not a new concept. It underlies one of ERISA's bedrock requirements. A fiduciary must discharge their duties prudently with care, skill, and diligence. It's the process by which a fiduciary can accomplish this. Here are seven practical considerations for fiduciaries to shore up their defenses and improve their governance practices.
Source: Retirementplanblog.com, August 2017
Abstract: Failing to follow best practices may leave a fiduciary personally liable for losses to the plan and result in removal from their duties. There are a number of actions fiduciaries can take to limit potential liability.
Source: Bsllp.com, August 2017
Abstract: Defined contribution plan sponsors often worry about landing in hot water for doing the wrong thing. However, many fiduciary issues crop up because plan sponsors have failed to take action. Here, we list eight potential fiduciary traps and suggest ways to avoid them.
Source: Callan.com, July 2017
Abstract: Vendors who service retirement plans will use the terms 3(16), 3(21) and 3(38) to describe their service offering. The terms have often been taken for granted, and sometimes abused by service providers looking for a marketing edge. This article offers some clarification and understanding regarding the terms.
Source: Alliantwealth.com, May 2017
Abstract: In an environment of increased fiduciary litigation, advisors and other service providers have ramped up their marketing efforts to provide risk management services to plan sponsors. Such efforts have resulted in plan sponsor confusion as to the type of services that are being offered, as well as the type of services that are preferable.
Source: Cammackretirement.com, April 2017
Abstract: As a plan fiduciary, you have a responsibility to ensure your service providers' compensation is reasonable relative to the services provided. A fiduciary process for assessing fees can help meet your obligation to provide a plan that operates in the best interest of your employees. Your plan provider or consultant can help you navigate this process by helping you answer four key questions.
Source: Tiaa.org, March 2017
Abstract: Plan fiduciaries worry not only about being a target of class action lawsuits, but also about the possibility of being selected for an IRS or Department of Labor audit. More and more fiduciaries are coming to realize that memorializing a set of carefully-thought out plan policies and following them can be their best defense in these situations.
Source: Cohenbuckmann.com, March 2017
Abstract: Plan sponsors face increasingly complex fiduciary requirements, as well as pressure to provide an optimal plan experience for participants at a reasonable cost. Making investment selection decisions under these conditions can prove challenging. This white paper aims to help fiduciaries navigate the waters of plan investment selection and monitoring processes.
Source: Troweprice.com, March 2017
Abstract: Fee reasonableness is a fundamental and widely discussed fiduciary topic. Despite the importance of the topic, the DOL hasn't given much insight or guidance as to what is considered a reasonable fee. As a result, much of the interpretation of what is and is not reasonable has come from the courts. As a fiduciary, it is important to turn to litigation for guidance, acknowledge how excessive fee allegations have evolved, and most importantly, to appropriately manage this risk in the future.
Source: Manning-Napier.com, March 2017
Abstract: Retirement plans are increasingly in the crosshairs for plaintiffs' lawyers. Allegations of breach of fiduciary duty based on payment of higher-than-reasonable fees to ERISA plan service providers are becoming more common. In the past 18 months, at least 38 ERISA class actions have been filed.
Source: Lockton.com, February 2017
Abstract: Employers that sponsor a retirement plan face a host of potential issues to consider both before and after a corporate merger or acquisition. These topics can be complex and often require appropriate analysis and planning prior to an acquisition in order to meet the goals of all parties and the needs of the affected employees.
Source: Vanguard.com, December 2016
Abstract: How much work and liability do you want to take on? How much expertise can you delegate internally? What do you want your team to spend their time on? This article compares the full spectrum of work you can delegate out to an ERISA fiduciary.
Source: Forusall.com, November 2016
Abstract: This 9-page paper starts by understanding the decades old federal law that establishes the duties of a fiduciary and then explore how advisors who find themselves in a fiduciary role can demonstrate compliance.
Source: Sourcemedia.com, November 2016
Abstract: In the this interview with Stephen Abramson, president of APS Pension Services, Mr. Abramson response to the following questions: How often should plan sponsors review their third-party fiduciaries, what are plan sponsors doing to become better fiduciaries, and how should retirement plan managers convince the plan's fiduciaries to take their fiduciary responsibility seriously?
Source: Psca-mobile.org, November 2016
Abstract: Given intensifying scrutiny of fiduciaries in the courts and public-square, PSCA encourages readers to understand the nuanced world of fiduciary services, to educate colleagues about the role and importance of the fiduciary, and to lead their organization's through conversations about whether outsourcing fiduciary services will work for the organization.
Source: Psca-mobile.org, November 2016
Abstract: ERISA does not prohibit retirement plan revenue sharing or even the retention of revenue sharing payments by retirement plan service providers. So, what's the concern? What do 401k plan fiduciaries need to know about revenue sharing? Here are some answers.
Source: Klgates.com, November 2016
Abstract: This 4-page 'checklist' covers areas of review that retirement plan fiduciaries may want to consider when fulfilling their fiduciary responsibilities.
Source: Troweprice.com, October 2016
Abstract: This is the slide deck from a recent webinar that reviewed the recurring claims against retirement plan sponsors and the steps fiduciaries may consider taking to document and to demonstrate prudence, shielding themselves against similar class action suits. Presenters were Richard J. Pearl, attorney at Drinker Biddle & Reath, and Erik Daley, Managing Principal for the Multnomah Group.
Source: Multnomahgroup.com, September 2016
Abstract: NAGDCA created this 11-page Fiduciary Responsibility Brochure to guide a fiduciary of a governmental participant directed DC plan through the basic fiduciary responsibilities imposed upon plan sponsors. It provides a simple explanation of fiduciary standards of conduct.
Source: Nagdca.org, September 2016
Abstract: In today's evolving legal, regulatory, and litigation environments, it is more important than ever that employee benefit plan fiduciaries understand their roles and responsibilities. This 78-page guidebook serves as a roadmap to your fiduciary duties and provides plan fiduciaries with tools to assist in complying with ERISA's fiduciary responsibilities.
Source: Vanguard.com, August 2016
Abstract: Am I a retirement plan fiduciary? Many plan sponsors simply don't know. Find out in five questions during this 1:43 minute video.
Source: Youtu.be, August 2016
Abstract: Designating a 3(38) investment advisor can be a beneficial choice for plan sponsors. But when reviewing this option plan sponsors need to determine if it is in the best interest of the participants to hire this type of advisor. This article outlines some of the advantages and disadvantages that plan sponsors should investigate when considering this option.
Source: 401kspecialistmag.com, August 2016
Abstract: Fiduciary duties and responsibilities are a growing responsibility for workplace retirement plan sponsors. This 60-page guide is an introductory fiduciary resource for defined contribution retirement plan sponsors and their employees working with the plan. It streamlines complex fiduciary topics into an easy-to-understand format.
Source: Troweprice.com, August 2016
Abstract: This 7-page checklist sets an agenda for quarterly retirement committee meetings and helps document plan topics that should be addressed at least annually. Each quarter's focus subject is intended to be a primary topic discussion for the committee, though other matters will also be discussed.
Source: Lockton.com, July 2016
Abstract: This essay calls attention to the regulatory imposition of the prudent investor rule on financial advisers to retirement savers. The essay also canvasses the basic tenets of the prudent investor rule, highlighting its nature as principles-based rather than prescriptive, and the customary role of an investment policy statement in compliance by professional fiduciaries.
Source: Ssrn.com, June 2016
Abstract: The Department of Labor is beginning to examine the training of plan committee fiduciaries. Training has also come up in 401k lawsuits lately and the fact that a committee has received fiduciary training has been viewed as favorable. Article discuss why advisers should consider helping plan sponsors with this task.
Source: Planadviser.com, May 2016
Abstract: Fred Reish and Joan Neri Answer the question, "Am I subject to liability if I learn that a one of these committees is about to commit a fiduciary breach or engage in a transaction prohibited by ERISA?"
Source: Planadviser.com, April 2016
Abstract: ERISA requires that an adviser act as a "prudent expert" when making a recommendation, while FINRA requires that the adviser "have a reasonable basis to believe" that a recommendation is "suitable." The purpose of this article is to give advisers a high-level overview of these standards of conduct and to highlight some differences and similarities.
Source: Planadviser.com, April 2016
Abstract: Based on Fred Reish's review of the DOL's fiduciary rule and conversations with his clients, here are some of his overview thoughts about the regulation and the two distribution exemptions (84-24 and BICE).
Source: Fredreish.com, April 2016
Abstract: The DOL issued a final rule defining the term fiduciary for investment advisers and brokers providing investment advice to participants and beneficiaries of employee benefit plans governed by ERISA and individual retirement accounts. The final rule makes several modifications and clarifications to the proposed rule. In conjunction, the DOL also issued amended versions of prohibited transaction exemptions.
Source: Practicallaw.com, April 2016
Abstract: This lengthy article provides an in-depth look at the keystone of the new fiduciary rule as it pertains to advisors working with individual retirement accounts: the new "Best Interests Contract Exemption," which most broker-dealers and insurance companies will rely upon in their future attempts to provide conflicted advice to IRAs for commission compensation, and the creation of the new "Level Fee Fiduciary" safe harbor.
Source: Kitces.com, April 2016
Abstract: Managing missing participant funds has been somewhat of a gray area within the retirement plan industry. But now, the DOL has decided to increase its scrutiny of benefit payment practices -- including the way plan sponsors and trustees search for missing participants and manage their unclaimed accounts -- to ensure that retirement plan trustees fulfill their fiduciary responsibilities to plan participants. This 4-page paper offers an overview and practical tips.
Source: Penchecks.com, April 2016
Abstract: The defined contribution marketplace and the sophistication of ERISA plan fiduciary has come a long way in recent years. This has resulted in changes in the best practices of those tasked with sponsoring and administering retirement plans governed by ERISA. This article is a summary of some of those best practices.
Source: Wagnerlawgroup.com, April 2016
Abstract: As rumored, this morning the Department of Labor finalized a rule and related exemptions that are intended to ensure that retirement savers get investment advice in their best interest -- commonly called the fiduciary or conflict of interest rule.
Source: 401khelpcenter.com, April 2016
Abstract: A rising number of challenges are being initiated by the plaintiffs' bar and DOL investigators in the area of retirement plan asset charges and retirement plan expenses. Retirement plan sponsors and other plan fiduciaries should take heed of this trend and consider taking the actions outlined here.
Source: Poynerspruill.com, March 2016
Abstract: Plan sponsor and plan fiduciary need to understand their responsibilities. This 12-page guide will assist plan fiduciaries in identifying and executing their responsibilities in sponsoring a defined contribution plan that is subject to ERISA.
Source: Principal.com, March 2016
Abstract: In the event of a Department of Labor or IRS audit, it's important to have detailed documentation to prove you've followed the rules of your plan and those outlined by ERISA. This log report provides space to record the activities you complete in 2016 for your company's defined contribution plan.
Source: Principal.com, March 2016
Abstract: Keeping track of your retirement plan's fiduciary documents is critical, but can be cumbersome. This checklist helps you understand which documents to store and retain. Simply review, check off and store your 2016 fiduciary documents together in one place.
Source: Principal.com, March 2016
Abstract: Hiring a 3(38) investment manager is like outsourcing any other HR function. While you have outsourced the work and liability, you cannot step away from the process. You must still monitor the service provider to make sure it is fulfilling its contractual obligations. Article reviews a handful of questions to consider when creating a framework to monitor a 3(38) investment manager.
Source: Captrustadvisors.com, March 2016
401khelpcenter.com, LLC is not the author of the material referenced in this digest unless specifically noted. The material referenced was created, published, maintained, or otherwise posted by institutions or organizations independent of 401khelpcenter.com, LLC. 401khelpcenter.com, LLC does not endorse, approve, certify, or control this material and does not guarantee or assume responsibility for the accuracy, completeness, efficacy, or timeliness of the material. Use of any information obtained from this material is voluntary, and reliance on it should only be undertaken after an independent review of its accuracy, completeness, efficacy, and timeliness. Reference to any specific commercial product, process, or service by trade name, trademark, service mark, manufacturer, or otherwise does not constitute or imply endorsement, recommendation, or favoring by 401khelpcenter.com, LLC.