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: 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: In separate amicus briefs in Whitley v. BP, P.L.C., the DOL and SEC clarify the responsibilities of a fiduciary under ERISA with control of an employee stock ownership plan, as a company stock fund investment option of a 401k plan.
Source: Groom.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
Abstract: The duties of a retirement plan sponsor seem pretty straightforward, but there are certain instances where a plan sponsor is unaware that their action or inaction puts them at risk to liability from either plan participants or governmental agencies such as the DOL and IRS. For plan trustees, that liability may be personal liability. This article details pitfalls that plan sponsors are usually unaware of, that exposes them to potential fiduciary liability.
Source: Jdsupra.com, December 2015
Abstract: Most employers are still confused and risking personal liability if 401k fiduciary responsibilities are not met. Understanding fiduciary roles and responsibilities is key to addressing the issue.
Source: Employeefiduciary.com, December 2015
Abstract: Of non-profit organizations that sponsor 403(b) retirement plans, only 60 percent are reviewing and evaluating the investment options in their plans, according a new survey from the Plan Sponsor Council of America that explores retirement plan trends among non-profit organizations.
Source: Psca.org, December 2015
Abstract: The institutionalization of defined contribution plans is gaining traction, and is yet another way plan sponsors can achieve their fiduciary responsibilities, experts say.
Source: Plansponsor.com, December 2015
Abstract: Plan sponsors must understand both governmental regulations and their fiduciary responsibilities in order to help participants leaving employment or retiring who need to make decisions about their retirement plans, according to this white paper.
Source: Dcprovider.com, December 2015
Abstract: Fiduciary concerns may have prevented plan committees from considering "economically targeted investments" (ETI) as alternatives for their plans. Recent DOL guidance, Interpretive Bulletin 2015-01, provides helpful clarity and should alleviate many of these concerns. This article outlines a fiduciary process that committees should follow in evaluating ETIs versus other investment alternatives, based on the key points in the Bulletin.
Source: Dbr.com, November 2015
Abstract: Retirement plan committees, regardless of the size of the plan sponsor, can be an effective method of managing a retirement plan. This article, by attorney Ary Rosenbaum, is about how retirement plan sponsors can use a plan committee correctly and some of the things they should avoid by setting one up.
Source: Jdsupra.com, November 2015
Abstract: Because a retirement benefit plan, like a 401k or 403(b) plan, requires you to meet an expert standard, more and more employers are outsourcing administration to third parties, sometimes known as fiduciary experts. Done properly, outsourcing can assure that the plan is well managed while relieving you of significant commitments and responsibilities. However, you still have responsibilities.
Source: Fiduciaryplangovernance.com, November 2015
Abstract: The path from the 403(b) plan of yesterday to a modern retirement benefit program is complex. This article focuses on fiduciary governance issues higher education institutions face as they transform their retirement plans to meet the needs of plan participants within the current market, administrative, and regulatory environment.
Source: Captrustadvisors.com, October 2015
Abstract: Will that insurer your company has been paying premiums to for all of these years stand behind you if you are sued for ERISA violations? Article covers a few points to be considered in a thorough review of coverage.
Source: Pensionsbenefitslaw.com, October 2015
Abstract: No one knows for sure what changes will result in questions involving ERISA fiduciary liability once the DOL issues its new fiduciary standards. However, this white paper point out that it's relatively easy and inexpensive for plan sponsors and other ERISA fiduciaries to conduct meaningful independent analyses of potential investment options and, in so doing, protecting both plan participants, their beneficiaries, and the plan's fiduciaries.
Source: Iainsight.wordpress.com, October 2015
Abstract: many plan sponsors are seeking to outsource these duties and associated risks. Because the selection and subsequent monitoring of service providers is a fiduciary duty itself, plan sponsors can never entirely delegate their fiduciary responsibilities. However, plan sponsors may delegate certain fiduciary duties to service providers, usually as a 3(16), 3(21) or 3(38) fiduciary.
Source: Unitedretirement.com, October 2015
Abstract: This guide is focused on the practical steps to take during the evaluation process -- which may include comparison and selection of TDFs, understanding their underlying investments, reviewing fees, developing communications, and documenting the process. It provides a checklist for periodic reviews, key questions to ask when following the DOL guidelines, and items to consider.
Source: Vanguard.com,, September 2015
Abstract: When an employer hires a 401k service provider, they have a fiduciary responsibility to monitor that provider for job performance. When a service provider has fiduciary authority, employer monitoring of that provider is even more important. Why? Because fiduciary liability for the employer can result.
Source: Employeefiduciary.com, September 2015
Abstract: This article discusses the duty to monitor non-fiduciary service providers. It focuses on two aspects of plan service provider arrangements that can make the monitoring process especially challenging: fees and revenue sharing arrangements.
Source: Octoberthree.com, September 2015
Abstract: While 401k sponsors are subject to complex fiduciary responsibilities under ERISA, a qualified service provider can make it simple for sponsors to meet their fiduciary responsibilities with some basic "best practice" guidance. Article highlights four guidance areas.
Source: Employeefiduciary.com, August 2015
Abstract: This article discusses the application of basic principles to the selection of plan investments and investment managers. It further considers this issue exclusively in the context of a 401k plan intended to comply with ERISA section 404(c), in which participants choose investments from a fund menu.
Source: Octoberthree.com, August 2015
Abstract: The law on the duty to monitor is, currently, abstract. This article reviews some basics, identify some key duty-to-monitor issues for sponsors and some monitoring strategies that sponsors may consider.
Source: Octoberthree.com, August 2015
Abstract: With unprecedented regulatory oversight over retirement plans and their management teams, plan sponsor executives need straightforward, easy-to-execute steps for maintaining compliance and effectiveness in their fiduciary role. This article provides the top three "fiduciary checkpoints" that will help keep retirement plan managers on track and in control of their retirement plan processes.
Source: Rolandcriss.com, August 2015
Abstract: Every decision plan fiduciaries make should be done in the best interest of the participants; that should be the guiding force committees follow. Here are four specifics to help you achieve fiduciary success.
Source: Vanguardinstitutionalblog.com, August 2015
Abstract: This article addresses the question, "What is the extent to which fiduciary liability may be 'outsourced' in an outsourcing transaction?" It discusses three different approaches: (1) the "traditional" approach, using plan delegation provisions; (2) designating the outsourcer as the "named fiduciary" in the plan document; and (3) providing contractual remedies to allocate the "cost" of any fiduciary liability to the outsourcer.
Source: Russell.com, July 2015
Abstract: This article reviews the meaning under ERISA of the terms "fiduciary" (ERISA 3(21)), "administrator" (ERISA 3(16)) and "investment manager" (ERISA 3(38)). It then considers, in each case, how those terms are used when discussing outsourcing. Finally, it briefly discusses the significance of these distinctions for purposes of the outsourcing relationship and contracting.
Source: Russell.com, July 2015
Abstract: Many retirement plan sponsors are under-informed about their ongoing fiduciary duty when making decisions regarding their 401k plan. This is a list of items to consider when outsourcing plan oversight responsibilities.
Source: Shrm.org, July 2015
Abstract: In the wake of Fifth Third v. Dudenhoeffer, a complaint that seeks to hold an ERISA fiduciary liable for failing to divest a plan of employer stock based solely upon publicly available information fails to state a plausible claim. An "independent" fiduciary only has access to public information. For this reason, claims that an independent fiduciary breached his ERISA fiduciary duties in connection with publicly traded company stock necessarily fail post-Dudenhoeffer.
Source: Alston.com, July 2015
Selecting Service Providers, Competitive Bidding, and RFP's Importance in a Fiduciary Investment Process
Abstract: Industry expert, Roger Levy, writes about fiduciary duties and how important it is to follow a formal due diligence process when hiring service providers, including investment advisors, to a retirement plan and other institutional accounts.
Source: Cloudfront.net, June 2015
Abstract: Fulfilling fiduciary responsibilities is essential, as errors can have serious consequences for both the organization and the individual fiduciaries themselves. Here are the top ten most common errors that fiduciaries make.
Source: Cammackretirement.com, June 2015
Abstract: New SEC money market funds rules that go into effect in 2016 will impact nearly every retirement plan that uses such funds as investment options or to facilitate plan administration. Plan sponsors, investment committees, those who advise them, and plan administrators should understand the upcoming changes in order to determine what steps that will be required or may be beneficial to take regarding such funds, and to consider their alternatives.
Source: Reliance-Trust.com, June 2015
Abstract: In many corporate transactions, the buyer agrees to cause its 401k plan to accept a transfer of assets from the seller's 401k plan. However, if the seller's plan contains employer stock as an investment, the buyer should be aware of fiduciary concerns that may arise under ERISA.
Source: Employeebenefitsblog.com, June 2015
Abstract: A central thesis is that ongoing oversight is an exercise in risk management and that risk management is a never ending process. The article emphasizes the importance of (a) examining multiple risk factors and not relying on performance numbers alone, (b) understanding the presence of financial leverage (should it exist), (c) clarifying the role of a service provider when an outside party is used, and (d) letting participants know about the type of monitoring being done by an investment committee.
Source: Pensionriskmatters.com, May 2015
Abstract: In Tibble v. Edison International, the Supreme Court ruled that plan fiduciaries have an ongoing fiduciary duty under ERISA to monitor plan investments, a duty separate and apart from the fiduciary's duty to be prudent when first selecting plan investments. In doing so, the Court opened the door for plaintiffs to allege a continuing fiduciary violation based on a failure to monitor plan investments and remove imprudent ones.
Source: Groom.com, May 2015
Abstract: This white paper examines the reproposed changes to the definition of an "investment advice fiduciary" for purposes of ERISA standards of fiduciary conduct and the prohibited transaction rules under ERISA and section 4975 of the Internal Revenue Code. It also covers the DOL's six proposed "carve-outs" from fiduciary status.
Source: Morganlewis.com, May 2015
Abstract: Article sets forth seven critical tips that employers can act upon to reduce their potential ERISA fiduciary exposure.
Source: Benefitslawadvisor.com, May 2015
Abstract: The DOL asserts the new fiduciary rule will require brokers to act in the "best interest" of the clients they serve, whether they be institutional or individual. But the DOL never really defines exactly what "best interest" means. Author canvassed retirement plan service providers from coast to coast to see if he could discover the phrase means.
Source: Fiduciarynews.com, May 2015
Abstract: This 25 page slide deck is from a recent webinar that covers the essentials that plan sponsors should know regarding their evolving responsibilities and duties of being an ERISA Fiduciary.
Source: Multnomahgroup.com, April 2015
Abstract: 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
Abstract: The Department of Labor's anticipated rule on conflicts of interest (aka, the Fiduciary Rule), is now available. Fi360 has prepared this five page an executive summary covering the basics of the rule.
Source: Fi360.com, April 2015
Abstract: 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
Abstract: There are a number of things that the fiduciary is required to disclose to participants and beneficiaries. The disclosure of such items is governed by Title I of ERISA. Article reviews the disclosures that must be provided by a plan on a regular basis.
Source: Nyhart.com, March 2015
Abstract: Because retirement plan fiduciaries are held to an exceptional level of duty and care under ERISA, the fiduciary standards that plan sponsors, investment committee members, and others in fiduciary roles must abide by can be summarized by a single phrase: "doing the right thing." When considering what plan sponsors can do to most effectively satisfy this, the five best practices outlined here rise to the top of the list.
Source: Vanguard.com, March 2015
Abstract: This article discusses the ways in which board oversight of a company's pension and other retirement plans can be exercised to avoid subjecting board members to ERISA's fiduciary standards, which are more restrictive than those imposed on directors generally. Complying with these more restrictive standards can lead to potential conflicts with a director's overall responsibility to the corporation and its shareholders.
Source: Shearman.com, February 2015
Abstract: Due diligence is the heart and soul of investment selection. A good due diligence process objectively whittles down the universe of available funds to just those that meet your high standards for inclusion in an investment portfolio. Here are seven qualitative factors that a fiduciary should consider implementing into their due diligence process.
Source: Fi360.com, February 2015
Abstract: Organizations that have adopted DC plans to shift investment risk to plan participants are in for a surprise. Employers are not off the hook. In fact, plan sponsors are subject to multiple levels of risk, including vendor-management, financial, administration and compliance, plan design and reputational risk. This article examines these risks and how they might negatively affect an organization’s DC plan and the retirement readiness of its employees.
Source: Sibson.com, February 2015
Abstract: 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
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