Let’s say you have a concern about how your 401(k) plan is operating. Maybe participant loans aren’t getting repaid or a service provider has neglected to allocate forfeitures on an annual bases. So you consult a lawyer. The lawyer writes a memo outlining the situation and advising on corrective steps. You drop the memo in … Continue Reading
As everyone in the ERISA world knows, the Department of Labor (DOL) on April 20, 2015 published a proposed regulation in the Federal Register relating to the definition of fiduciary within the meaning of ERISA section 3(21)(A)(ii). ERISA section 3(21)(A)(ii) is that part of the definition of fiduciary that addresses investment advice for a fee … Continue Reading
The recent Department of Labor’s re-proposed Fiduciary Rule has generated many opinions on how it will affect fiduciary service models. One constant, however, cuts through all of the debate: the Plan Sponsor still has the fiduciary responsibility to select and monitor those service providers. But as you can see, there is a hierarchy of service … Continue Reading
It took nine years in the case of Butler v. United Healthcare of Tennessee to determine who was responsible for a denied group health benefit claim. The patient, covered by her husband’s ERISA health benefit plan, sought treatment for inpatient rehabilitation for substance abuse. Treatment for which was denied by United. The patient ultimately received … Continue Reading
I had the opportunity recently to make a presentation on qualified retirement plans to the Illinois CPA Society (ICPAS). Actually, it was using PowerPoint to begin a dialogue with the members of the ICPAS Investment Advisory Services/Personal Financial Planning Forum The ICPAS describes their Forums as being “composed of members with shared interests who interact … Continue Reading
Harry S. Truman, the 33rd President of the United States, is pictured above with the sign he kept on his desk, “The buck stops here.” It meant that the President had to make the decisions and accept the ultimate responsibility for those decisions. What does that have to do with a 401(k) plan? Everthing. It’s … Continue Reading
A recent court decisions and the Settlement Agreement in a Department of Labor (DOL) enforcement action against an institutional ESOP trustee provide new guidelines for trustees and other ESOP fiduciaries involved in the purchase or sale of company stock. Bear in mind that all employee stock ownership plans (ESOPs) are set up to invest primarily … Continue Reading
Admit it: Your company, as a 401(k) sponsor, and company decision makers who direct plan operations (including in-house trustees), are ERISA fiduciaries. Don’t quibble about this but take a step back and figure out what to do about it. Some Basic Steps You’ve read about investment advisors who can assist in performing investment duties and … Continue Reading
That’s not someone from a Sherlock Holmes story. But it could be very well be my old college buddy Bob (not his real name, of course). Bob was of the era in which aspiring stockbrokers went to New York immediately upon graduation to be trained by one of the wire houses. Bob came back home … Continue Reading
When we think about lying, cheating, and stealing in the workplace, we may think it’s always bad people doing bad things. But sometimes good people lose their moral compasses because of peer pressure. That was the conclusion of the recent study, Underestimating Our Influence Over Others’ Unethical Behavior and Decisions conducted by Bohns, Roghanizad, and Xu … Continue Reading
No, that’s not the Matrix pictured on the right. It’s simply a visual representation of a special report by The Economist a little over three years ago, Data, Data Everywhere, In that report, The Economist reported that Wal-Mart handled more than one million customer transactions every hour, feeding databases estimated at more than 2.5 petabytes. … Continue Reading
Bob Seger and the Silver Bullet Band on their Rock and Roll Never Forgets Tour this Spring. Still The Same. And still the same is the miscommunication that sometimes happens between the employee and the employer about the benefit program. It could be, for example, the Summary Plan Description and plan document don’t gibe as … Continue Reading
That’s a picture from Episode 12, How to Rock a Part Time Job, that ran on the Nickelodeon sitcom, How To Rock, on April 21, 2012. In case you haven’t seen the show, here’s the premise courtesy of Wikipedia: The show centers on Kacey Simon (Cymphonique Miller), a popular girl who was once mean, and … Continue Reading
With apologies to anyone associated with the 1967 ground breaking movie, The Graduate, my headline is a riff on the scene to your right featuring a young Dustin Hoffman as Benjamin, and the late character actor, Walter Brooke, as Mr. McGuire. Mr. McGuire: I want to say one word to you. Just one word. Benjamin: … Continue Reading
Welcome to FPA/Plans Tools and their new blog to the group of us that blog about retirement plan matters. Their goals are to provide informative content on ERISA cases, as well as their proprietary ERISA Litigation Index, which discusses cases filed in federal court so that advisers and plan sponsors can stay current on litigation … Continue Reading
In the almost 7 years I have been writing this blog, I have written a number of book reviews about 401(k) plans and investing that have tracked the retirement plan industry. Josh Itzoe’s Fixing The 401(k) in 2009 Pat Huddleston’s, The Vigilant Investor: THE VIGILANT INVESTOR: A Former SEC Enforcer Reveals How To Fraud Proof-Your Investments in 2011 … Continue Reading
Back in the Day – the Day being as far back as the ancient Egyptian settlement of Buhen in 1860 BC – moats were excavated around castles and settlements as part of their defensive system. In today’s terms, we would call it “risk management”. So with some editorial license, I’ll use the moat metaphor to … Continue Reading
Today our firm and Mike Cavanaugh and Tim Webb, Registered Investment Advisors at Know Your Options, Inc., sponsored a special briefing for corporate attorneys on the new fee disclosure regulations impacting their clients. Our briefing at the University of Chicago Gleacher Center was provided to help them provide their clients with the guidance and strategies … Continue Reading
Don’t Worry, Be Happy, is, of course, the title of Bobby McFerrin’s 1988 hit song. Since then, it’s seeped into our culture. If you want to fully incorporate it into your life, you can download the ring tone. I’m suggesting, however, that it shouldn’t be the attitude of employers who have received 408(b)(2) service provider … Continue Reading
If you’re in and around the 401(k) world, you know who Chris Carosa, CFTA, is. And if you don’t you should. Most of us know him as a prolific author who is the Chief Contributing Editor of FiduciaryNew.com, a superb source of information and commentary about the fiduciary aspects of retirement plans. Chris now has … Continue Reading
Let me introduce you to the “ERISA Account”, a relative newcomer to the small 401(k) plan market. It’s been part of the large and medium plan market for some time. Only recently has it migrated down stream because of (yes, you guessed it) the increased regulatory emphasis and fiduciary attention to fee disclosure. Overview ERISA … Continue Reading
One thing you can say for sure about the 401(k) business, it’s responsive to the needs of the marketplace. Since the beginning of 401(k) plans in the early 1980s, 401(k) service providers have introduced an increasing number of services to stay competitive with other providers. We’ve seen the proliferation of such features as: Daily valuation … Continue Reading
With the increasing spotlight on fiduciaries and their responsibilities for ERISA plans, many employers are asking themselves whether it’s time to buy fiduciary liability insurance. With personal assets on the line for breach of fiduciary responsibility, there is no “one size fits all” answer. But, if you are a fiduciary considering fiduciary liability insurance, here … Continue Reading
