COLLECTED WISDOM™ on Fiduciary Responsibility and Liability Issues

Other topical areas you may find of interest that are not fully covered here include ERISA 404(c) Compliance And Fiduciary Duty and Company Stock in 401k Plans.

What Makes Me a Fiduciary? - Summary: Lately, the word on the street has been that retirement plan fiduciaries are being put under a high degree of scrutiny for their actions or, more importantly, their inactions. This article will help you determine if you are a fiduciary and what to do if you are. Located at: Milliman , February 2008. Click on headline for full article.

Conducting a DC Plan Assessment - Summary: It is clearer than ever that DC plan sponsors can no longer afford to take a laissez-faire approach toward plan management. The plan fiduciaries must ensure they are doing everything they can to act exclusively in the interest of the plan's participants. Located at: Sibson Consulting, January 2008. Click on headline for full article.

DOL Cracking Down on 401k Oversight - Summary: The Department of Labor is has proposed levying fines of up to $1,000 a day against retirement plan administrators who fail to disclose certain documents to investors. Located at: Wolters Kluwer Financial, January 2008. Click on headline for full article.

Establish an Investment Committee - Summary: Author explains how plan sponsors and plan fiduciaries can limit liability by forming an investment committee with a clearly defined process. Located at: fi360.com , December 2007. Click on headline for full article.

Brokers as Fiduciaries - Summary: This article concludes that to be fiduciary advice, the broker's recommendations must contemplate, among other things, investment policies and strategies, portfolio composition, diversification or similar overarching factors. That is, investment recommendations alone are not fiduciary advice and therefore an investment recommendation -standing alone- is not a fiduciary act. Located at: Reish Luftman Reicher & Cohen , July 2007. Click on headline for full article.

A Conversation with a Fiduciary - Summary: Earlier this year, Matthew Hutcheson testified before a Congressional committee about high and hidden fees in retirement plans. In this guest column for MorningstarAdvisor.com, the independent pension fiduciary envisions a conversation between a CEO of a small company and a fiduciary. As we shall see, the CEO has a thing or two to learn about his fiduciary responsibility to his employees. Located at: Morningstar, June 2007. Click on headline for full article.

Getting It Right - Know Your Fiduciary Responsibilities - Summary: The Department of Labor has a launched a nationwide campaign to improve workers' health and retirement security by educating employers and service providers about their fiduciary responsibilities under the Employee Retirement Income Security Act. Located at: U.S. Department of Labor, May 2007. Click on headline for full article.

New Paradigm for 401k Fiduciaries - Summary: A single St. Louis-based law firm filed a series of class action lawsuits that target some large plan sponsors and the fiduciaries of their 401k plans. These lawsuits should not be taken lightly for these litigators have stumbled across the Achilles heel of 401k fiduciaries-a compliance and procedure, rather than a value and results, driven approach to running 401k plans. Located at: Investment Horizons , November 2006. Click on headline for full article.

Fiduciary Issues for Financial Professionals Under ERISA - Summary: This white paper focuses on whether, and to what extent, financial professionals take on a fiduciary role under ERISA when they help their clients with these issues. It also discusses the implications of fiduciary status. This paper further examines certain services offered by plan providers and their value to the financial professionals. Located at: Principal Financial Group , October 2005. Click on headline for full article.

Are You Fulfilling Your Fiduciary Responsibility? - Summary: ERISA sets standards of conduct for those who manage an employee benefit plan and its assets, dubbed fiduciaries. This article is an overview of those standards of conduct. Located at: Bruner-Cox LLP, August 2005. Click on headline for full article.

Fiduciary Liability Loss Prevention - Summary: Chubb commissioned Dan A. Bailey, a partner in the law firm of Arter & Hadden LLP, to prepare Fiduciary Liability Loss Prevention to help fiduciaries and their employers protect themselves from litigation arising from their professional duties. It discusses the general principles governing fiduciary liability, reviews many potential exposures, and suggests step-by-step loss prevention procedures. Located at: Chubb Group , August 2005. Click on headline for full article.

401k Plan Fiduciary Best Practices: A Case Study - Summary: This case study illustrates that it is increasingly important to develop a structure and means to manage 401k plan governance. Taking the time to develop and document such policies and procedures will help to protect the plan participants and plan fiduciaries, as well as the plan sponsor. Located at: Aon Consulting , August 2005. Click on headline for full article.

The Fiduciary Responsibility To Be Responsible - Summary: ERISA requires that the 401k investment options be "prudent and suitable." Would an investment be prudent and suitable if participants do not know how to use that investment in the appropriate way to assemble well-balanced portfolios? There is a growing body of evidence that many, if not most, participants lack the basic knowledge needed to use 401k investments properly. That raises the obvious question of whether an investment that is likely to be used improperly is a "suitable and prudent" choice. Located at: Reish Luftman Reicher & Cohen, July 2005. Click on headline for full article.

Selecting And Monitoring Pension Consultants - Tips For Plan Fiduciaries - Summary: The U.S. Department of Labor and the Securities and Exchange Commission have published a guide to help pension plan fiduciaries assess third party pension consultants, specifically, regarding potential conflicts of interest. Located at: 401khelpcenter.com, June 2005. Click on headline for full article.

ERISA Fiduciary Responsibility and Liability - Summary: A summary of the rules defining ERISA fiduciary responsibility, including an overview of liabilities arising from fiduciary breaches. The document is organized in "Q&A" form. Located on: Dechert LLP, June 2005. Click on headline for full article.

Selecting and Monitoring Investment Professionals - Summary: This article addresses salient legal issues confronting plan fiduciaries today in connection with the investment of employee benefit plan assets. Located at: Benefits & Compensation Digest , May 2005. Click on headline for full article.

Are You A Plan Fiduciary? - Summary: Are you a fiduciary at your business or professional practice? The answer "I'm not sure" isn’t good enough, because if you are, you could be held personally liable for any wrongful act, knowing or unknowing, direct or indirect, including individual employee decisions associated with the administration of your benefit plans. Located at: 401kadvisorygroup.com, April 2005. Click on headline for full article.

Ten Fiduciary Duties - Summary: Here is a general overview of fiduciary duties and responsibilities. It is not intended to be a detailed or comprehensive list, but it will give you a starting point in understanding the issues. Located at: 401khelpcenter.com, March 2005. Click on headline for full article.

ERISA and the 401k Plan Fiduciary - Summary: The bear market that began in 2000, corporate scandals best illustrated by the demise of Enron, and the more recent revelations concerning abuses in the mutual fund industry have brought a new focus to the conduct of 401k plan fiduciaries. In light of this increasing attention, the fiduciaries of 401k plans are well-advised to pay more attention to their duties under the law. This is a very good primer on the subject. Located at: Snell & Wilmer LLP , February 2005. Click on headline for full article.

Investment Selection and Monitoring Best Practices - Summary: In this article, the author contends that, due to changes in the investment process, regulatory and legal environments, the procedures for oversight used by many plan sponsors may no longer be prudent. The article sets out a best practices approach to process, asset allocation and investment monitoring, including 10 analytics plan sponsors should focus on, intended to mitigate fiduciary liability for plan sponsors and improve the investment choices made available to participants. Located at: 401khelpcenter.com, January 2005. Click on headline for full article.

New Tools Help Plan Sponsors Fulfill Fiduciary Duty - Summary: One of the big dilemmas that plan sponsor fiduciaries have is just gathering and understanding all the fee and expense information related to their 401k plan. It seems like the retirement industry makes it hard to get a handle on the data, but two recent tools have been made available to that should greatly help overcome the problem. Located at: 401khelpcenter.com, September 2004. Click on headline for full article.

Know When to Hold 'Em, Know When to Fold 'Em: The High Stakes Game of Fiduciary Liability - Summary: The area of fiduciary responsibility is beginning to remind me of one of those high stakes game of poker that are becoming increasingly popular on television. Retirement plan committee members feel the weight of a spotlight on their next move as a crowd of curious participants anxiously await whether the committee members have a hand full of aces or are simply bluffing their way through the meeting. What happens when one of the participants calls the committee's bluff and potentially costing your company and plan millions of dollars? Located at: 401khelpcenter.com, July 2004. Click on headline for full article.

ERISA Fiduciary Responsibility: CEOs and Directors In the Bull's Eye - Summary: CEOs and boards of directors commonly are responsible for designating individuals to manage and administer company pension plans. The DOL and others, however, are pressing executives and directors to continue overseeing those plans after the appointment process is over. In particular, the DOL has long interpreted ERISA to impose a duty of monitoring on CEOs (and other designating officials, like a board of directors), who appoint other fiduciaries to run a plan. Fiduciaries who fail to live up to their responsibilities are potentially subject to personal liability for plan losses. Located at: Pepper Hamilton LLP, June 2004. Click on headline for full article.

Directors and the Duty to Monitor under ERISA (Part II) - Summary: Recent cases provide some insight into how the courts are dealing with this ongoing issue as it relates to 401k company stock cases which are making their way through the courts. There are now a whole host of recent cases (stemming from the economic turmoil of the past few years) which have made it past the motion to dismiss phase, two of which have seemingly reached opposite results on the issue and are worthy of discussion. Located at: Benefitsblog.com, May 2004. Click on headline for full article.

OPINION: Connecting the ERISA Fiduciary Dots - Summary: ERISA Fiduciary Responsibilities and Retiring in Dignity -- This article will examine whether or not these two dots can be connected from which a picture would emerge, or to say it another way, does connectivity exist between these two known and clearly visible dots? Located at: 401khelpcenter.com, April 2004. Click on headline for full article.

Mitigating 401k Plan Fiduciary Liability - Summary: Suppose an angry participant or plaintiff's counsel confronts you, saying you have violated your responsibility as a plan fiduciary. How could you prove that you had met that responsibility? What could you show them? For many fiduciaries of 401k plans, the answer is: very little. And that presents the potential for litigation. Located on: SmartPros Ltd., December, 2003. Click on headline for full article.

What The Current Mutual Fund Trading Allegations Mean to Retirement Plan Sponsors - Summary: In recent weeks, the pillars of the retirement plan community have once again been shaken by allegations of wrongdoing and afflicted with a new round of "Enronitis." Enronitis is the fear that financial irregularities will afflict a large area of the financial markets and is particularly contagious in retirement plans. This time, the outbreak of Enronitis is focused on the alleged impropriety of certain improper trading practices: Market Timing and Late Trading. How Should a Plan Sponsor React to Avoid Enronitis? Located at: 401khelpcenter.com, November 2003. Click on headline for full article.

The Mutual Fund Scandal: What Should Plan Sponsors Do? - Summary: For companies that sponsor 401k retirement plans, the news is depressing. It seems like every few days another trusted name in the mutual fund industry is caught up in the growing scandal and there’s no clear end in site. It’s like watching a storm develop on the open prairie and not knowing whether you’re in its path, whether to take shelter or even where to take shelter. Located at: Blue Prairie Group , November 2003. Click on headline for full article.

The Lessons A Plan Sponsor Can Learn From Enron - Summary: What duty does a plan sponsor have to share information, educate participants about the risks of certain investments, and to restrict an employees ability to take actions to protect their retirement savings? Located on: 401khelpcenter.com, February, 2002. Click on headline for full article.

Interpretive Bulletin 96-1; Participant Investment Education - Summary: This interpretive bulletin sets forth the views of the Department of Labor (the Department) concerning the circumstances under which the provision of investment-related information to participants and beneficiaries in participant-directed individual account pension plans will not constitute the rendering of "investment advice" under ERISA. This guidance is intended to assist plan sponsors, service providers, participants and beneficiaries in determining when activities designed to educate and assist participants and beneficiaries in making informed investment decisions will not cause persons engaged in such activities to become fiduciaries with respect to a plan by virtue of providing "investment advice" to plan participants and beneficiaries for a fee or other compensation. Located at: U.S. Department of Labor , September 2003. Click on headline for full article.

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