A WHITE PAPER: C. Frederick Reish & Nicholas J. White

Size: px
Start display at page:

Download "A WHITE PAPER: C. Frederick Reish & Nicholas J. White"

Transcription

1 Selecting Plan Investments, Services and Providers: Satisfying ERISA s Fiduciary Requirements Using Fiduciary Benchmarks, Inc. Reports A WHITE PAPER: By C. Frederick Reish & Nicholas J. White Reish Luftman Reicher & Cohen Wilshire Boulevard, 10 th Floor Los Angeles, CA (310) / (310) [fax] FredReish@Reish.com / NickWhite@Reish.com

2 TABLE OF CONTENTS Page INTRODUCTION... 1 LEGAL ANALYSIS OF THE ROLES OF PLAN SPONSORS AND SERVICE PROVIDERS AND VALUE OF THE SERVICE IN SUPPORTING THAT ROLE... 5 CONCLUSION ENDNOTES i

3 Analysis of Fiduciary Benchmarks, Inc. Reports INTRODUCTION The climate in the benefits world has become increasingly litigious in recent years, which has left plan fiduciaries facing greater scrutiny than ever before. The flood of litigation began with the large employer stock cases and has now extended to midsize and smaller companies, regarding a whole host of issues. The more recent complaints allege, among other things, that plan fiduciaries breached their fiduciary duties by: Entering into agreements with third parties that allowed the plan to pay unreasonable and/or excessive fees; Failing to inform themselves of, and understand, the various methods by which vendors in the 401(k), financial and retirement industries collect payments and other revenue; and Failing to monitor plan fees, expenses and investments. It appears it may be only a matter of time before the lawsuits address operational issues such as the suitability of the plan for employer s workforce and failure of the plan fiduciary to ensure the plan s service providers provide adequate services. In addition, it may not be long before we see plan service providers become the target of lawsuits. These service providers should not assume they are immune from ERISA litigation. Depending on their relationship with the plan, they may be the focus of claims for breach of fiduciary duty, prohibited transactions (relating to engaging in an unreasonable arrangement and/or receiving unreasonable compensation), or both. The purpose of this White Paper is to discuss the obligation of fiduciaries under the Employee Retirement Income Security Act of 1974 ( ERISA ) to prudently select investments, services and providers for the retirement plans they serve, and then prudently monitor those investments, services and providers to ensure the plan is operated for the exclusive benefit of plan participants and their beneficiaries, and thus, avoids litigation. Our focus is on participant-directed defined contribution plans and the obligations of fiduciaries in selecting the investments and services for those plans (and the related providers), and the providers who will perform the record keeping and other administrative functions for the plan. After discussing the obligation of fiduciaries to engage in a prudent process in selecting investments, services and providers, we analyze the service provided by Fiduciary Benchmarks, Inc., an information-gathering and benchmarking tool, and the extent to which it assists fiduciaries in fulfilling their obligations under ERISA. 1

4 DESCRIPTION OF THE SERVICES The description of the Fiduciary Benchmarks, Inc. ("FBi") services is based upon our review of the written materials and other information provided to us by FBi and/or its advisors. FBi is an independent authority on fees, success measures, support and services for defined contribution plans. The company provides plan sponsors with reports that support fiduciary and best practices assessments, as well as information for use in communications with plan participants. To provide its service, FBi has developed a comprehensive database and system to gather and continuously update plan data, and has developed software to build reports that compare a plan s fees, participant success measures, support and services ( benchmarking reports ) to a universe of similar plans (the Benchmark Group ). Its services are available through advisor/consultants, plan providers, and can be accessed directly. FBi s benchmarking reports enable defined contribution plan fiduciaries to obtain data that will permit them to assess how their plan compares in multiple respects to the Benchmark Group. The purpose of this information is to assist fiduciaries in fulfilling their obligation to assess their plan s investment fees reasonableness, services and costs, and to make changes as necessary in the best interests of the plan, the participants and their beneficiaries. FBi offers two types of reports: the Annual Benchmark Basic Report (the Basic Report ) recommended for plans up to $20 million, and the Annual Benchmarks Plus Report (the Plus Report ), recommended for plans above $20 million. In summary, the Basic Report compares plan fees, success measures, support and services to the Benchmark Group. The Plus Report includes all of the Basic Report information, and adds additional scope relative to services and service utilization. The FBi Reporting process begins with a comprehensive download or provision of plan and related recordkeeping data from the plan provider, covering the following subjects: Basic plan data information Investment information Expense information Plan design features Outsourcing responsibilities Transaction volumes Customized features; and Plan-level behavioral metrics Next, service providers and plan sponsors are invited to FBi s website to customize the downloaded plan information, as well as to provide additional facts on the plan, its services, and practices. 2

5 FBi Reports are then built using a five-step process as follows: Step 1: Step 2: Step 3: Step 4: Step 5: Identify similar plans for comparison (the fixed universe for the Basic Report) Identify all fees being paid to the primary service providers Examine ten recognized industry statistics that measure how well participants are preparing for retirement. Identify the support the plan is receiving from fiduciary oversight and best practices relative to plan design and administration, participant communications, investments and fees, and company stock if applicable Examine the administration, compliance and communications services being used by the plan. For the Plus Report, plan design complexity, the amount of services used, and service standards are also considered. For plans using advisors or consultants, they may complete a brief three-part assessment of satisfaction with the services team, participant services and plan sponsor services. The Benchmark Group of similar plans can be determined based on the following sort factors. Plan assets Number of participants The last year the plan was reviewed or sent out for bid Company industry Plan type Whether the plan uses autoenrollment The level of company matching contributions The percentage of assets passively managed The percentage of assets in managed accounts Whether the plan uses a third-party administrator Whether the plan uses an advisor/consultant The percent of assets in a Company Stock Fund (Plus report only) Each of the first three sort factors is fixed for all FBi Benchmark Groups. The first two factors are critical industry drivers of plan costs, while the third factor is included to ensure the Benchmark Group reflects recent market pricing. The remaining factors can be elected to further refine benchmark group comparisons. Using this information, the Basic Report provides a comparison of a plan s fees, participant success measures, support and services to the Benchmark Group with respect to the following: Overall Plan and/or Service Providers Summary Recordkeeper, advisor and investment manager fees (the amounts capture fees paid by participants, fees paid out of plan assets, and fees paid separately by the plan sponsor); 3

6 The scope of investment offerings; Investment expenses; Participant success measurements (e.g., how the plan experience relates to 10 recognized industry statistics that measure how well a plan helps participants prepare for retirement); Fiduciary oversight and best practices relative to (i) plan design and administration; (ii) participant communications; (iii) investments; and (iv) fees Administration, compliance and communication services offered (differentiating between plan-driven and participant-driven); and The advisor s/consultant s opinion on the scope, coverage, and/or quality of the plan s service team, participant services and sponsor services (if provided) In addition to what is provided in the Basics Report, the Plus Report includes comparisons to the Benchmark Group with respect to the following: Detailed Service Provider Summaries Fiduciary oversight and best practices related to company stock Plan complexity Amount of services used Plan accuracy Timeliness of plan operations (differentiating between plan-driven and participant-driven) In general, both reports indicate whether the plan is low, average, below average, above average or high in comparison the Benchmark Group, and a numerical indication of the extent to which the plan differs from the Benchmark Group average. FBi Reports also include access to research papers and the ability to run customized benchmark group reports. As a wholly independent and unaffiliated company, FBi s service is unbiased and authoritative. The information FBi provides is based entirely on information contained in its database of current plan data (updated quarterly), and the proprietary software it developed to build the comparisons. The benchmarking reports provide information to plan fiduciaries to review in order to assess the plan s investments, services and costs of providers. This assessment, in turn, enables the plan fiduciaries to make informed decisions about whether to change one or more providers, change the plan and/or change its services. The decision remains wholly that of the fiduciaries, but by utilizing a service that includes a broad spectrum of information, fiduciaries should be in a position to make more informed and better decisions. 4

7 LEGAL ANALYSIS OF THE ROLES OF PLAN SPONSORS AND SERVICE PROVIDERS AND VALUE OF THE SERVICE IN SUPPORTING THAT ROLE Fiduciary Responsibility ERISA imposes high standards upon fiduciaries responsible for managing the operations of retirement plans the courts refer to those duties as the highest known to law. 1 Section 404(a) of ERISA sets out the primary duties of fiduciaries. 2 That section provides in relevant part as follows: a fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and (A) for the exclusive purpose of: (i) providing benefits to participants and their beneficiaries; and (ii) defraying the reasonable expenses of administering the plan; (B) with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. Stated more simply, these duties are: (i) the duty of loyalty to the participants and beneficiaries; (ii) the exclusive purpose requirement; and (iii) the prudent man rule. ERISA does not spell out how the fiduciaries must fulfill these duties; however, through advisory opinions and regulations, the Department of Labor (DOL) explains these duties in more detail. While the current guidance most often addresses the issue of investments, the concepts are fundamental to a prudent process and, therefore, accurately describe the process a fiduciary must engage in to make decisions about the design and operation of the plan apart from investment the analysis of investments and whether changes need to be made in these areas. In Advisory Opinions 97-15A and 9716A, the DOL makes it clear that the plan fiduciary has a legal obligation to reach informed decisions. The DOL describes the investment duties of fiduciaries as follows: With regard to an investment or investment course of action taken by a fiduciary of an employee benefit plan pursuant to his investment duties, the requirements of section 404(a)(1)(B) of the Act are satisfied if the fiduciary (A) has given appropriate consideration to those facts and circumstances that the fiduciary knows or should know are relevant to the particular investment 5

8 or investment course of action involved, including the role the investment or investment course of action plays in that portion of the plan s investment portfolio with respect to which the fiduciary has investment duties; and (B) has acted accordingly. 3 [Emphasis added] This Regulation succinctly describes a number of requirements: First, while not explicitly stated in the Regulation, it is implicit and fundamental that the fiduciary must have the information (the facts and circumstances ) that bears on the decision being made. This requirement is clearly subsumed in the second requirement, below. Second, the fiduciary must know the information that is relevant to the decision. Thus, it is not sufficient to gather quantities of data; the data must be the information needed to make a prudent and informed proper decision. And it is not sufficient for the fiduciary to rely only on what he or she knows; rather, the fiduciary must consider the information he or she should know is relevant to the decision. Third, the fiduciary must give the information appropriate consideration. In other words, the fiduciary must weigh the information appropriately. 4 In describing the selection of an annuity provider for a plan, the DOL expanded on the scope of analysis required of the fiduciaries. While the focus is on annuity providers, the Regulation is nonetheless illustrative of the type of diligence in which the fiduciaries must apply in selecting and monitoring investments and plan services: In addition, the fiduciary obligation of prudence requires, at a minimum that plan fiduciaries conduct an objective, thorough and analytical search for the purpose of identifying and selecting providers from which to purchase annuities. The message of the Regulation and other guidance is clear. Fiduciaries must be diligent in gathering relevant data and analyzing it thoroughly and objectively for the purpose of making informed decisions that are in the best interest of the plan, its participants and beneficiaries. And, again, this is true regardless of whether the issue is investments, or plan design and operation The Duty to Investigate Courts have emphasized that the fiduciaries must conduct a thorough investigation and make decisions based on the information they have gathered. As the court explained in Riley v. Murdock, Courts have articulated two ways in which to measure a fiduciary s use of prudence in carrying out their duties. The 6

9 first is whether the fiduciary employed the appropriate methods to diligently investigate the transaction and the second is whether the decision ultimately made was reasonable based on the information resulting from the investigation. 5 Courts have made it clear that results, including but not limited to investment results, are not the key to measuring fiduciary conduct, but rather the thoroughness of the examination of relevant information. As one court explained: ERISA 404(a)(1)(B) requires only that [fiduciaries] vigorously and independently investigate the wisdom of a contemplated investment; it matters not that the investment succeeds or fails, as long as the investigation is intensive and scrupulous and... discharged with the greatest degree of care that could be expected under all the circumstances by reasonable beneficiaries and participants of the plan. 6 Thus, ERISA requires fiduciaries to use a prudent process in assessing plan design and operations, and managing its assets. To meet this requirement, they are must thoroughly investigate the issues under consideration to obtain relevant information, and then base their decisions on the information obtained. Duty to Use Outside Sources Fiduciaries are not expected to be experts. They may rely on the assistance of others in performing the investigation and data gathering referred to in the prior section. While the issue of reliance on third parties for assistance often comes up in the context of the use of experts and the cases and other guidance in that area may be useful by analogy to reliance on the assistance of non-experts the DOL has specifically addressed the question of whether a fiduciary may rely on information provided by others who are not fiduciaries in discharging their fiduciary responsibilities. The DOL states: A plan fiduciary may rely on information, data, statistics or analyses furnished by persons performing ministerial functions for the plan, provided that he has exercised prudence in the selection and retention of such persons. The plan fiduciary will be deemed to have acted prudently in such selection and retention if, in the exercise of ordinary care in such situation, he has no reason to doubt the competence, integrity or responsibility of such persons. 7 The DOL recognizes in this Regulation that fiduciaries will often need to rely on others to gather data and provide them with analyses of that data. So long as the fiduciary has no reason to doubt that the provider is competent, the fiduciary is deemed to have fulfilled its responsibility in selecting and relying on the provider. 7

10 Duty to Prudently Monitor When hiring a service provider, a fiduciary is responsible for making a prudent evaluation of the provider and the reasonableness of the fees being charged for the service to be performed. In addition, the fiduciary is responsible for prudently monitoring the activities and reviewing the performance of the provider. With respect to the duty to monitor, generally, DOL Interpretive Bulletin 96-1(e) states as follows: Selection and Monitoring of Educators and Advisors. As with any designation of a service provider to a plan, the designation of a person(s) to provide investment education services or investment advice to plan participants and beneficiaries is an exercise of discretionary authority or control with respect to management of the plan; therefore, persons making the designation must act prudently and solely in the interest of plan participants and beneficiaries, both in making the designation(s) and in continuing such designation(s). Thus, a fiduciary s responsibilities do not end with respect to decisions about providers, investment, and other plan activities. Fiduciaries must also prudently monitor and evaluate the service provider, investments and other plan activities. The "Duty" of Service Providers to Provide Plan Fiduciaries with Information As discussed more fully, below, under the heading FBi s Service Assists Fiduciaries in Meeting Their Obligation to Obtain a Broad Range of Information From Plan Providers and Elsewhere," the proposed regulations under ERISA 408(b)(2) provide that "fiduciaries are not limited by the disclosures required" under those regulations. That is, fiduciaries are not limited to seeking information about compensation and fees. Rather, fiduciaries can and should ask plan service providers for any information they (the fiduciaries) need to carry out their obligations under ERISA. This includes the information needed to properly evaluate the plan s investments and operations (i.e., design, services and service provider performance). This fiduciary requirement to ask for all necessary information should be kept in mind in analyzing the requirements under ERISA 408(b)(2), which exempts certain arrangements from ERISA s prohibited transaction rules. ERISA 408(b)(2) provides that it is a prohibited transaction for a service provider (as a party-in-interest) to among other things enter into an arrangement with a plan that is unreasonable. The guidance under ERISA 408(b)(2) explains, in summary, that a contract is unreasonable if the fees, services and conflicts of interest are not adequately disclosed, so that a plan fiduciary can determine whether they are reasonable in light of the value of the services being provided. 8

11 Ultimately, courts of law will determine how to apply the prohibition against unreasonable arrangements to the duties of service providers to disclose information to fiduciaries. At least one plausible interpretation of ERISA 408(b)(2) is that a plan's service providers must provide the plan fiduciaries with any information they reasonably need to fulfill their fiduciary duties under ERISA. That line of reasoning would go on to say that, if the service providers are uncooperative in this regard, the arrangement they have with the plan is unreasonable and, as such, constitutes a prohibited transaction under ERISA. Again, this issue is unclear at this time and will ultimately be decided by the courts. However, what is clear is that service providers to plans would be well advised to take the prudent approach in this instance and, thus, endeavor to provide plan fiduciaries with the information they have that is responsive to the fiduciary s reasonable request. If the service provider were to do otherwise, it may not only constitute a prohibited transaction, but it may also constitute a breach of an express or implied contract with the plan and/or plan sponsor. How is FBi s Service Uniquely Structured to Assist Plan Fiduciaries in Satisfying Their Fiduciary Responsibilities? In conducting searches for providers of investments and services, and assessing the reasonableness of plan fees and expenses, fiduciaries have an obligation to know the products and services that are available in the market place. The fiduciaries then need to determine which providers will meet the specific needs of the plan at the most appropriate cost. In undertaking this effort, fiduciaries may rely on third parties to assist them, so long as the third parties are independent, unbiased and competent. FBi is an independent organization that focuses on fees, success measures, support and services for defined contribution plans. The company provides plan sponsors with benchmarking reports that support fiduciary and best practices assessments, as well as information for use in communications with plan participants. FBi s benchmarking reports enable defined contribution plan fiduciaries to obtain data enabling them to assess how their plan compares in multiple respects to universe of similar plans, referred to as the Benchmark Group. The purpose of this information is to assist fiduciaries in fulfilling their obligation to assess their plan s investments, services and costs, and to make changes as necessary in the best interests of the plan, the participants and their beneficiaries. FBi s Service Assists Fiduciaries In Meeting Their Obligation to Obtain a Broad Range of Information From Plan Providers and Elsewhere FBi s benchmarking reports are structured to assist fiduciaries in meeting their obligations to take into account all relevant plan data and information. The data takes into account investments and fees, as well as data that permits value comparisons of (i) plan complexity; (ii) outsourcing of administration and communication services; (iii) fiduciary oversight and best practices relative to plan design and administration; (iv) the differences in business volumes and timing; (v) participant success in terms of both 9

12 participation and adequacy of retirement benefits; (vi) satisfaction with the plan s services team for plan sponsors and participants; and much more. The importance of having a broad range of information is emphasized in the DOL s guidance under ERISA 408(b)(2), pertaining to reasonable contracts or arrangements. In the preamble to the regulation, the DOL is careful to point out that a full and proper analysis of compensation and fees (the subject being addressed in the proposed regulation) is not enough. Rather, it is fundamental to the fiduciary s ability to meets its obligations that it have all the information necessary to enable it to make informed decisions about a plan. Specifically, the preamble states in relevant part as follows: Section 404(a) of ERISA requires that the responsible plan fiduciary engage in an objective process designed to elicit information necessary to assess not only the reasonableness of the compensation or fees to be paid for services, but also the qualifications of the service provider and the quality of the services that will be provided. Although the steps taken by a responsible plan fiduciary may vary depending on the facts and circumstances, solicitation of bids among service providers is a means by which the responsible plan fiduciary can obtain information relevant to the decisionmaking process. A responsible plan fiduciary should not consider any one factor, including the fees or compensation to be paid to the service provider, to the exclusion of other factors. Further, a fiduciary need not necessarily select the lowest-cost service provider, so long as the compensation or fees paid to the service provider are determined to be reasonable in light of the particular facts and circumstances. Further, plan fiduciaries are not limited by the disclosures required in this proposal. Plan fiduciaries may ask service providers for any additional information that they feel is necessary to their decision. For example, a responsible plan fiduciary may have questions for a service provider concerning the specific personnel that will be assigned to manage or perform services under the contract or arrangement. Finally, although this proposal looks to disclosures made at the time a service contract or arrangement is entered into or renewed, responsible plan fiduciaries must continue to monitor service arrangements and the performance of service providers. Receipt of the disclosures described in this proposed regulation at the onset of a service 10

13 relationship will not relieve plan fiduciaries of this ongoing obligation. 8 [Emphasis added.] The DOL s guidance in the ERISA 408(b)(2) regulation reminds plan fiduciaries that they are responsible for gathering all of the information necessary to enable them to meet their legal responsibilities, that is, to ensure that they prudently operate the plan for the exclusive benefit of the participants and their beneficiaries. This necessarily means plan fiduciaries are required to obtain from plan providers and elsewhere the broad range of information contemplated by FBi s service. Then, to give context and meaning to that information, it needs to be measured against a meaningful standard or benchmark. And, this is precisely the information FBi s benchmarking reports provide to fiduciaries. FBI s Service Assists Fiduciaries In Meeting Their Obligation to Assess Utilization of Plan Services, Plan Needs and Participant Needs FBi s benchmarking reports are structured to assist a fiduciary in meeting not only the general obligation to monitor the performance of service providers, but also the utilization of services. That is, the extent to which the services are being used effectively by plan sponsors and participants, and whether they are reasonably designed and operated to meet the goals of the plan. This utilization of services aspect of the duty to monitor is highlight by the DOL in Field Assistance Bulletin No It states, in relevant part, as follows: In monitoring investment advisers, we anticipate that fiduciaries will periodically review, among other things, the extent to which there have been any changes in the information that served as the basis for the initial selection of the investment adviser, including whether the adviser continues to meet applicable federal and state securities law requirements, and whether the advice being furnished to participants and beneficiaries was based upon generally accepted investment theories. Fiduciaries also should take into account whether the investment advice provider is complying with the contractual provisions of the engagement; utilization of the investment advice services by the participants in relation to the cost of the services to the plan; and participant comments and complaints about the quality of the furnished advice. With regard to comments and complaints, we note that to the extent that a complaint or complaints raise questions concerning the quality of advice being provided to participants, a fiduciary may have to review the specific advice at issue with the investment adviser. [Emphasis added.] Thus, the duty to monitor specifically includes the duty to assess the utilization of services. That is, the extent to which plan services including advice are being used, and whether those services are working from both a plan participant perspective. 11

14 On a related issue, the courts have embraced the position that fiduciaries must assess the needs of a plan in making decisions regarding plan investments: Failure to investigate the needs of a plan or to ascertain the particular requirements or restrictions of a plan, and failure to invest in accordance with the best interest of plan participants constitutes a breach of fiduciary duties imposed by ERISA. 9 (Emphasis added.) In addition, the needs of a plan participant must be considered: At the very least, [fiduciaries] have an obligation to (i) determine the needs of a fund s participants, (ii) review the services provided and fees charged by a number of different providers and (iii) select the provider whose service level, quality and fees best matches the fund s needs and financial situation. 10 (Emphasis added.) Indeed, it has been held that an investment manager has a duty to inquire of the particular needs of the plan vis-à-vis its participants. 11 The requirement to evaluate the utilization of services and plan and participant needs necessarily means plan fiduciaries are required to obtain, from plan providers and elsewhere, information that takes into account plan sponsor and participant use and satisfaction with services, and participant success measures. Then, to give context and meaning to that information, it needs to be measured against an appropriate standard. That is, a fiduciary needs to know whether the plan s services are average, better than most or worse than most, the extent to which plan and participant needs are being met, and whether the costs are reasonable based on those considerations. The information FBi s benchmarking reports provides to plan fiduciaries enables them to perform that analysis and reach an informed decision. FBi s Service Assists Fiduciaries in Satisfying Their Obligations Under The Prudent Man Rule Under the subsection entitled Fiduciary Responsibility, above, we explain that a fiduciary must perform its duties:... with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.... [Emphasis added.] The emphasized language is particularly important. This is due to the fact that, in recent years, significant investment and service options have come on the market. And, at the same time, more information about all aspects of plan operations has become available to fiduciaries. Thus, in our observation, the expectations of fiduciaries are changing under 12

15 the circumstances [now] prevailing, because they have more information available to them, which they are legally obligated to consider in carrying out their fiduciary responsibilities. This means fiduciaries need to gather this additional information and carefully evaluate it, such that the decisions they make are informed and well reasoned. FBi s benchmarking reports contain the information and data fiduciaries must consider to meet the prudent man rule, and it is presented in a manner that facilitates the process of making informed and reasoned decisions under this standard. Based on our understanding of ERISA s fiduciary provisions for participantdirected plans, and our review of the services provided by FBi, we have concluded that those services provide substantial support in the performance of those duties, including specifically the prudent man rule, the exclusive purpose rule and the duty of loyalty. CONCLUSION FBi s Benchmarking Reports provide material assistance to fiduciaries in gathering the substantial amount of data necessary to analyze and monitor a defined contribution plan s investments, services and providers, and in developing measurements or benchmarks for evaluating that data. The services cover all major aspects of plan operation, including investments, services, participation, deferral rates, and fees and expenses. All decisions regarding a plan remain those of the fiduciaries, but by utilizing the FBi benchmarking service fiduciaries will be able to provide substantial evidence of having gathered and evaluated the information required for a prudent process, and for an informed and reasoned decision. 13

16 ENDNOTES 1 SommersDrug Stores Co. Employee Profit Sharing Trust v. Corrigan, 793 F.2d 1456, 1468 (5th Cir. 1986); Donovan v. Bierwirth, 680 F.2d 263, 272 n. 8 (2d Cir.), cert. denied, 459 U.S. 1069, 103 S.Ct. 488, 34 L.Ed.2d 631 (1982). 2 Under ERISA, a fiduciary is defined as a person who exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets,...renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of such plan, or has any authority or responsibility to do so, or...has any discretionary authority or discretionary responsibility in the administration of such plan. ERISA Section 3(21)(A). Typically, the fiduciaries consist of the members of the plan committee and any officers of the plan sponsor who are responsible for or who actually make the decisions in a provider search. 3 DOL Regulation Section a-1(b)(1). 4 While beyond the scope of this White Paper, the Regulation provides some explanation of appropriate consideration, indicating that it includes but is not limited to determining whether a particular investment or investment course of action is reasonably designed, as a part of the portfolio, to further the purposes of the plan, taking into consideration the risk of loss and the opportunity for gain, and considering the composition of the portfolio with regard to diversification, the liquidity and current return of the portfolio relative to anticipated cash flow requirements and the projected return relative to the funding objectives of the plan. DOL Regulation Section a-1(b)(2). 5 Riley v. Murdock, 890 F.Supp. 444, 458 (E.D.N.C. 1995) (citation omitted). 6 Donovan v. Walton, 609 F.Supp. 1221, 1238 (D.C.Fla ) (citations and footnote omitted). 7 DOL Regulation Section , Q&A FR Preamble to DOL Regulation Section b-2, Section B-1.(g) 9 GIW Industries, Inc. v. Trevor, Stewart, Burton & Jacobsen, Inc., 10 EBC 2290, 2301 (S.D.Ga 1989). 10 Liss v. Smith, supra, 991 F.Supp. at 300; see also, Whitfield v. Tomasso, 682 F.Supp.1287, 1304 (E.D.N.Y. 1988): In providing benefits, in order to fulfill their fiduciary duties, the [fiduciaries] should have considered the needs of the participants and an appropriate level of benefits, and then should have solicited multiple proposals and completely evaluated the proposals before entering into an agreement. 11 Lanka v. O Higgins, 810 F.Supp. 379, 388 (N.D.N.Y. 1992) 14

EACUBO 2011 Pittsburgh Workshop

EACUBO 2011 Pittsburgh Workshop EACUBO 2011 Pittsburgh Workshop ERISA Fiduciary Responsibilities for 403(b) Plans: Keys to Implementation June 17, 2011 Presented by: Ed Wodarczyk, Esq. Rhoades & Wodarczyk, LLC 330 Grant Street; Suite

More information

Understanding the Structure and Risk in a Co-Fiduciary Advisor Relationship

Understanding the Structure and Risk in a Co-Fiduciary Advisor Relationship Understanding the Structure and Risk in a Co-Fiduciary Advisor Relationship A White Paper by Chris Rowey and Darren Stewart Benefit Funding Services Group 2040 Main Street, Suite 150 Irvine, CA 92614 Introduction

More information

RETIREMENT INSIGHTS. Understanding your fiduciary role. A plan sponsor fiduciary guide

RETIREMENT INSIGHTS. Understanding your fiduciary role. A plan sponsor fiduciary guide RETIREMENT INSIGHTS Understanding your fiduciary role A plan sponsor fiduciary guide ABOUT Perhaps no one topic in the employee benefits arena has drawn more attention and scrutiny over the last several

More information

The Prudence Standard: Affiliated Products and Services

The Prudence Standard: Affiliated Products and Services The Prudence Standard: Affiliated Products and Services A WHITE PAPER by C. Frederick Reish, Esq Bruce L. Ashton, Esq. Summer Conley, Esq. June 2011 1800 Century Park East Suite 1400 Los Angeles, CA 90067-1517

More information

ERISA Fiduciary Responsibilities A Primer for Plan Sponsors

ERISA Fiduciary Responsibilities A Primer for Plan Sponsors ERISA Fiduciary Responsibilities A Primer for Plan Sponsors Abigail B. Pancoast Senior Counsel, Lincoln Financial Group The information contained in this article is intended to provide general information,

More information

Understanding fiduciary responsibilities

Understanding fiduciary responsibilities INSIGHTS SERIES Perspectives and viewpoints on investing in today s market Understanding fiduciary responsibilities A guide for retirement plan sponsors Offering a retirement savings opportunity in the

More information

Models of Advisor Fiduciary Responsibility: What Advisors Need to Know

Models of Advisor Fiduciary Responsibility: What Advisors Need to Know Models of Advisor Fiduciary Responsibility: What Advisors Need to Know Ashish Shrestha Regional Director This information is provided for registered investment advisors and institutional investors and

More information

ERISA FIDUCIARY RESPONSIBILITY: FIDUCIARY RELIANCE ON REGISTERED INVESTMENT ADVISORS

ERISA FIDUCIARY RESPONSIBILITY: FIDUCIARY RELIANCE ON REGISTERED INVESTMENT ADVISORS ERISA FIDUCIARY RESPONSIBILITY: FIDUCIARY RELIANCE ON REGISTERED INVESTMENT ADVISORS WHITE PAPER Gary J. Caine, FSA REGIONAL DIRECTOR INTRODUCTION Plan sponsors have become more concerned about the investments

More information

New Regulations Under ERISA Refine and Develop Fiduciary Duties Regarding the Investment of Plan Assets

New Regulations Under ERISA Refine and Develop Fiduciary Duties Regarding the Investment of Plan Assets New Regulations Under ERISA Refine and Develop Fiduciary Duties Regarding the Investment of Plan Assets Maine Employee Benefits Council December 4, 2008 Eric D. Altholz Verrill Dana, LLP Background There

More information

Clearing Up the Confusion Over a Retirement Plan Advisor s Fiduciary Status

Clearing Up the Confusion Over a Retirement Plan Advisor s Fiduciary Status Clearing Up the Confusion Over a Retirement Plan Advisor s Fiduciary Status Chuck Rolph, J.D. Director, Advanced Consulting Group Nationwide Financial Introduction This paper is directed to financial advisors

More information

Service Provider Fee Disclosure Rules Now Final: Next Steps for Retirement Plan Fiduciaries. March 2012

Service Provider Fee Disclosure Rules Now Final: Next Steps for Retirement Plan Fiduciaries. March 2012 Service Provider Fee Disclosure Rules Now Final: Next Steps for Retirement Plan Fiduciaries March 2012 Table of Contents Service Provider Fee Disclosure Final Rules 2 Background 2 Significant Clarifications

More information

Understanding Your Fiduciary Role

Understanding Your Fiduciary Role Understanding Your Fiduciary Role Legal Aspects of Fiduciary Duties Under ERISA for Tax-Exempt Plan Sponsors Mark A. Daniele, Esq. McCarter & English, LLP January 26, 2012 I. ERISA ERISA imposes various

More information

Fees, Expenses and Revenue Sharing: Regulation, Litigation, Legislation and Best Practices

Fees, Expenses and Revenue Sharing: Regulation, Litigation, Legislation and Best Practices Fees, Expenses and Revenue Sharing: Regulation, Litigation, Legislation and Best Practices presented by FREDRED REISH, ESQ ESQ. REISH & REICHER May 6, 2010 Plan Expenses and Compensation The trend is towards

More information

Sponsored by ishares. Prepared by The Wagner Law Group. Fiduciary Status. Understanding the Different Roles and Status of 401(k) Fiduciaries

Sponsored by ishares. Prepared by The Wagner Law Group. Fiduciary Status. Understanding the Different Roles and Status of 401(k) Fiduciaries 401(k) Fiduciary Toolkit Sponsored by ishares Prepared by The Wagner Law Group Fiduciary Status Understanding the Different Roles and Status of 401(k) Fiduciaries IMPORTANT INFORMATION The Wagner Law Group

More information

Form ADV Part 2A Brochure March 30, 2015

Form ADV Part 2A Brochure March 30, 2015 Item 1 Cover Page Form ADV Part 2A Brochure March 30, 2015 OneAmerica Securities, Inc. 433 North Capital Avenue Indianapolis, Indiana, 46204 Telephone: 877-285-3863, option 6# Website: www.oneamerica.com

More information

RETIREMENT PLAN FIDUCIARY GUIDE

RETIREMENT PLAN FIDUCIARY GUIDE RETIREMENT PLAN FIDUCIARY GUIDE CONGRATULATIONS You re sponsoring a valuable retirement plan for your employees, and BB&T is delighted to assist you in that effort. Employees will appreciate this important

More information

A NEW FIDUCIARY RULE FOR THE INVESTMENT ADVICE PLAYBOOK

A NEW FIDUCIARY RULE FOR THE INVESTMENT ADVICE PLAYBOOK PlanAdvisorTools.com A NEW FIDUCIARY RULE FOR THE INVESTMENT ADVICE PLAYBOOK How the DOL s Fiduciary Rule Has Fundamentally Changed Investment Advice for IRAs By Fred Reish - Partner, Drinker Biddle &

More information

FIDUCIARY CONSIDERATIONS IN OFFERING A BROKERAGE WINDOW

FIDUCIARY CONSIDERATIONS IN OFFERING A BROKERAGE WINDOW FIDUCIARY CONSIDERATIONS IN OFFERING A BROKERAGE WINDOW by Fred Reish and Bruce Ashton Compliments of TD Ameritrade Content provided by: C. Frederick Reish, Partner at Drinker Biddle & Reath, LLP and Bruce

More information

Fiduciary Liability. Liability Case Studies & Strategies for 401(k) Plan Fiduciaries. 401(k) FIDUCIARY TOOLKIT. Prepared by The Wagner Law Group

Fiduciary Liability. Liability Case Studies & Strategies for 401(k) Plan Fiduciaries. 401(k) FIDUCIARY TOOLKIT. Prepared by The Wagner Law Group 401(k) FIDUCIARY TOOLKIT Sponsored by ishares Prepared by The Wagner Law Group Fiduciary Liability Liability Case Studies & Strategies for 401(k) Plan Fiduciaries IMPORTANT INFORMATION The Wagner Law Group

More information

How To Manage The Risks Of An Erisa Fiduciary

How To Manage The Risks Of An Erisa Fiduciary Mitigating fiduciary liability for defined contribution plan investment decisions Vanguard commentary June 2013 Executive summary. In recent years, several high-profile class-action lawsuits have alleged

More information

The Benefits of Mandatory Distributions

The Benefits of Mandatory Distributions The Benefits of Mandatory Distributions A WHITE PAPER BY FRED REISH AND BRUCE ASHTON C. Frederick Reish (310) 203-4047 Fred.Reish@dbr.com www.drinkerbiddle.com/freish Bruce L. Ashton (310) 203-4048 Bruce.Ashton@dbr.com

More information

Prudent Investing and ERISA: Fees and the Fiduciary Duty of Care

Prudent Investing and ERISA: Fees and the Fiduciary Duty of Care y Prudent Investing and ERISA: Fees and the Fiduciary Duty of Care by Melanie L. Fein Fein Law Office Washington, DC MAY 2015 1 June 2, 2015 Prudent Investing and ERISA: Fees and the Fiduciary Duty of

More information

Understanding Fiduciary Responsibility in 401(k) Plans

Understanding Fiduciary Responsibility in 401(k) Plans RESOURCE EDGE TM Understanding Fiduciary Responsibility in 401(k) Plans A Guide for Financial Professionals INVESTMENT INSIGHTS PRACTICE BUILDING SOLUTIONS RETIREMENT RESOURCES The following information

More information

FIDUCIARY LIABILITY INSURANCE, BONDING, AND SERVICE AGREEMENTS FOR SPONSORS

FIDUCIARY LIABILITY INSURANCE, BONDING, AND SERVICE AGREEMENTS FOR SPONSORS FIDUCIARY LIABILITY INSURANCE, BONDING, AND SERVICE AGREEMENTS FOR SPONSORS 2007 by: Marcia S. Wagner, Esq. The Wagner Law Group A Professional Corporation 99 Summer Street, 13 th Floor Boston, MA 02110

More information

WHAT IT MEANS TO BE AN INVESTMENT FIDUCIARY

WHAT IT MEANS TO BE AN INVESTMENT FIDUCIARY WHAT IT MEANS TO BE AN INVESTMENT FIDUCIARY Two Buckhead Plaza, Suite 600 3050 Peachtree Road NW Atlanta, GA 30305 2013 A division of Raymond James & Associates, Inc., member New York Stock Exchange/ SIPC

More information

401(k) Plan Administration: Fiduciary Responsibility and The Impact of Changes to Your Plan

401(k) Plan Administration: Fiduciary Responsibility and The Impact of Changes to Your Plan 401(k) Plan Administration: Fiduciary Responsibility and The Impact of Changes to Your Plan Presented by: Kirsten L. Vignec Shareholder Hill Ward Henderson Introduction Our discussion today focuses on

More information

Fiduciary Risk Management for Plan Sponsors and Advisers

Fiduciary Risk Management for Plan Sponsors and Advisers june 2012 perspectives Fiduciary Risk Management for Plan Sponsors and Advisers The recent recession and market volatility have changed the playing field for investors and for the financial institutions

More information

Legal Obligations of Employers for 401(k) Plans

Legal Obligations of Employers for 401(k) Plans Legal Obligations of Employers for 401(k) Plans 1. Background A. After extensive investigation of 401(k) retirement plans throughout the country, the Department of Labor (DOL) has determined the following:

More information

Fee disclosure Q&A: Answering plan sponsor questions about Department of Labor regulations

Fee disclosure Q&A: Answering plan sponsor questions about Department of Labor regulations Fee disclosure Q&A: Answering plan sponsor questions about Department of Labor regulations Spring 2012 U.S. Department of Labor (DOL) regulations outlining obligations of plan sponsors and service providers

More information

Determining reasonableness of retirement plan fees

Determining reasonableness of retirement plan fees Determining reasonableness of retirement plan fees Vanguard commentary September 2011 Fees paid for retirement plan investments and services have always been an important consideration for ERISA fiduciaries.

More information

Using ERISA Accounts to Help Manage Fee-Related Fiduciary Responsibilities

Using ERISA Accounts to Help Manage Fee-Related Fiduciary Responsibilities Defined Contribution Plans Fiduciary Focus Series Using ERISA Accounts to Help Manage Fee-Related Fiduciary Responsibilities Contents 1 Employer Fee Responsibilities 2 Revenue Sharing 3 DOL s View of ERISA

More information

Plan Administrator Guide

Plan Administrator Guide Plan Administrator Guide Your qualified retirement plan combines current employer tax savings with retirement security for participants. Congress specifically provided for this favorable treatment in the

More information

FIDUCIARY INSIGHTS & UPDATES

FIDUCIARY INSIGHTS & UPDATES FIDUCIARY INSIGHTS & UPDATES Did You Know? There are two types of advice services that can be offered in retirement plans: conflicted and nonconflicted. Conflicted advice means that the provider of advice

More information

Executive Summary Definition of the Term Fiduciary U.S. Department of Labor Conflict of Interest Rule 1. April 15, 2016

Executive Summary Definition of the Term Fiduciary U.S. Department of Labor Conflict of Interest Rule 1. April 15, 2016 Executive Summary Definition of the Term Fiduciary U.S. Department of Labor Conflict of Interest Rule 1 April 15, 2016 I. Introduction. Background. The U.S. Department of Labor (the Department or DOL )

More information

I. Introduction. II. Methods of Pension De-Risking

I. Introduction. II. Methods of Pension De-Risking TESTIMONY OF ROBERT S. NEWMAN Covington & Burling LLP ERISA Advisory Council United States Department of Labor Hearing on PRIVATE SECTOR PENSION DE-RISKING AND PARTICIPANT PROTECTIONS June 5, 2013 I. Introduction

More information

Value of an Independent ERISA Fiduciary Advisor

Value of an Independent ERISA Fiduciary Advisor What s the ROI of an Independent ERISA Fiduciary Expert? There are at least six key benefits that employers and their employees may receive with their retirement plans after hiring a skilled and experienced

More information

NAIFA Fact Sheet: DOL Expands Fiduciary Definition

NAIFA Fact Sheet: DOL Expands Fiduciary Definition NAIFA Fact Sheet: DOL Expands Fiduciary Definition The Department of Labor (DOL) has released its long anticipated Proposed Regulation to Address Conflicts of Interest, and is accepting public comments

More information

The Basics of Fiduciary Responsibility under ERISA

The Basics of Fiduciary Responsibility under ERISA The Basics of Fiduciary Responsibility under ERISA Prepared by Elizabeth A. LaCombe, Esq. I Who Is A Fiduciary Under the Employee Retirement Income Security Act of 1974 (ERISA)? Any person or entity who:

More information

The Expanding Legal Requirements for Rollover IRAs

The Expanding Legal Requirements for Rollover IRAs The Expanding Legal Requirements for Rollover IRAs By Fred Reish Partner, Drinker Biddle & Reath LLP PlanAdvisorTools.com Provided compliments of RidgeWorth Investments The Expanding Legal Requirements

More information

PROFIT SHARING PLANS. for Small Businesses

PROFIT SHARING PLANS. for Small Businesses PROFIT SHARING PLANS for Small Businesses 1 Profit Sharing Plans for Small Businesses is a joint project of the U.S. Department of Labor s Employee Benefits Security Administration (EBSA) and the Internal

More information

FIDUCIARY INSIGHTS & UPDATES

FIDUCIARY INSIGHTS & UPDATES FIDUCIARY INSIGHTS & UPDATES Did You Know? Fiduciaries have important responsibilities and are subject to high standards of conduct because they act on behalf of participants in a retirement plan and their

More information

401 (k) plan administration

401 (k) plan administration 401 (k) plan administration how plan sponsors can reduce legal risk May 9, 2005 Evan Miller emiller@hhlaw.com Brian L. Shiker blshiker@hhlaw.com Hogan & Hartson LLP 555 Thirteenth Street, NW Washington,

More information

Exercising Fiduciary Authority and Control Over the Investment Menu in 403(b) Plans Subject to ERISA

Exercising Fiduciary Authority and Control Over the Investment Menu in 403(b) Plans Subject to ERISA Reproduced with permission from Tax Management Compensation Planning Journal, 38 CPJ 299, 11/05/2010. Copyright 2010 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com Exercising

More information

For Institutional Use Only Not for Use with Retail Investors RETIREMENT FIDUCIARY FOCUS

For Institutional Use Only Not for Use with Retail Investors RETIREMENT FIDUCIARY FOCUS AN ADVISOR S GUIDE TO UNDERSTANDING FIDUCIARY RESPONSIBILITIES IN A 401(k) PLAN For Institutional Use Only Not for Use with Retail Investors RETIREMENT FIDUCIARY FOCUS TABLE OF CONTENTS 1 Introduction

More information

FIDUCIARY AND INVESTMENT RESPONSIBILITIES

FIDUCIARY AND INVESTMENT RESPONSIBILITIES FIDUCIARY AND INVESTMENT RESPONSIBILITIES Purpose (See R. S. 11:261) The legislature recognizes that the fiscal integrity of various governments of and within this state and the financial security of employees

More information

Considerations in the Use of Self-Directed Brokerage Accounts in Participant-Directed 401(k) Plans

Considerations in the Use of Self-Directed Brokerage Accounts in Participant-Directed 401(k) Plans Considerations in the Use of Self-Directed Brokerage Accounts in Participant-Directed 401(k) Plans Chuck Rolph, J.D. Director, Advanced Consulting Group Nationwide Financial Background Today's typical

More information

ERISA AND THE RESPONSIBILITIES OF A PLAN SPONSOR: THE NEED FOR AN EXPERIENCED INTERMEDIARY

ERISA AND THE RESPONSIBILITIES OF A PLAN SPONSOR: THE NEED FOR AN EXPERIENCED INTERMEDIARY ERISA AND THE RESPONSIBILITIES OF A PLAN SPONSOR: THE NEED FOR AN EXPERIENCED INTERMEDIARY The following addresses the potential benefits of retaining a financial intermediary for retirement plans, specifically

More information

Prepared by The Wagner Law Group

Prepared by The Wagner Law Group 401(k) FIDUCIARY TOOLKIT Sponsored by ishares Prepared by The Wagner Law Group Rollover Assets Navigating ERISA Restrictions on Cross-Selling to 401(k) Plan Participants IMPORTANT INFORMATION The Wagner

More information

Your role as a fiduciary

Your role as a fiduciary Institutional Retirement and Trust Your role as a fiduciary Table of contents Who is a fiduciary? 1 Have I identified all my fiduciaries? 4 Can I outsource my fiduciary role? 4 What are my basic fiduciary

More information

A Guide to Understanding Fiduciary Responsibility in 401(k) Plans

A Guide to Understanding Fiduciary Responsibility in 401(k) Plans From Our Resource Edge Series A Guide to Understanding Fiduciary Responsibility in 401(k) Plans The following information is intended to be a general educational guide on the subject of fiduciary responsibility

More information

FIDUCIARY BEST PRACTICES:

FIDUCIARY BEST PRACTICES: FIDUCIARY BEST PRACTICES: Taking a prudent approach to plan management A White Paper Prepared by Transamerica Retirement Solutions Contents Taking a prudent approach to plan management 2 Appointment of

More information

MARK D. MENSACK, LLC. INDEPENDENT FIDUCIARYCONSULTING

MARK D. MENSACK, LLC. INDEPENDENT FIDUCIARYCONSULTING MARK D. MENSACK, LLC. INDEPENDENT FIDUCIARYCONSULTING Introduction to Fiduciary Responsibility Fiduciary Responsibility: Why is it Hot?? Ever since the Enron and WorldCom debacles, Fiduciary Responsibility

More information

What it Means to be an ERISA Fiduciary: A Comparison to the Securities Laws

What it Means to be an ERISA Fiduciary: A Comparison to the Securities Laws What it Means to be an ERISA Fiduciary: A Comparison to the Securities Laws By David C. Kaleda Most federally registered broker-dealers ( BDs ) and federally registered investment advisers ( RIAs ) are

More information

FIDUCIARY RESPONSIBILITY OF RETIREMENT BOARD MEMBERS AND STAFF. Derek Moitoso Compliance Counsel PERAC September 2015

FIDUCIARY RESPONSIBILITY OF RETIREMENT BOARD MEMBERS AND STAFF. Derek Moitoso Compliance Counsel PERAC September 2015 FIDUCIARY RESPONSIBILITY OF RETIREMENT BOARD MEMBERS AND STAFF Derek Moitoso Compliance Counsel PERAC September 2015 2 840 CMR 1.01 A board member shall discharge all of his/her duties solely in the interest

More information

401k Regulation and the New Fiduciary Responsibility of Sponsors

401k Regulation and the New Fiduciary Responsibility of Sponsors T. Rowe Price 401(k) Fees and Fiduciary Responsibility What Plan Sponsors Need to Know Retirement Insights Executive Summary In recent years, market events have made many 401(k) participants more sensitive

More information

ADV Part 2A Firm Brochure

ADV Part 2A Firm Brochure ADV Part 2A Firm Brochure Alpha Asset Consulting LLC 191 University Boulevard #334 Denver, Colorado 80206 Phone: 303.321.3837 Fax: 303.484.6887 Email: info@alpha-llc.com Website: www.alpha-llc.com Brochure

More information

Mitigating Fiduciary Liability for Investment Evaluation & Selection In A Profit Sharing/401(k) Plan

Mitigating Fiduciary Liability for Investment Evaluation & Selection In A Profit Sharing/401(k) Plan Mitigating Fiduciary Liability for Investment Evaluation & Selection In A Profit Sharing/401(k) Plan Fiduciary Insight, LLC 5555 DTC Parkway, Suite D-2004 Greenwood Village, CO 80111 Telephone: 303.xxx.xxxx

More information

401(k) INVESTMENTS: Satisfying ERISA s Fiduciary Rules

401(k) INVESTMENTS: Satisfying ERISA s Fiduciary Rules 401(k) INVESTMENTS: Satisfying ERISA s Fiduciary Rules Any person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries by

More information

Meeting Your Fiduciary Responsibilities

Meeting Your Fiduciary Responsibilities Meeting Your Fiduciary Responsibilities To view this and other EBSA publications, visit the agency s Web site at: www.dol.gov/ebsa. To order publications, contact us electronically at: www.askebsa.dol.gov.

More information

Retirement Plan Investment Monitoring and Best Practices for Plan Sponsors

Retirement Plan Investment Monitoring and Best Practices for Plan Sponsors Retirement Plan Investment Monitoring and Best Practices for Plan Sponsors Tyrone Golatt Senior Regional Vice President Geoff Finkel Associate Account Executive 1 This material is not intended to give

More information

Fiduciary Guide. Helping to protect your plan. MetLife Resources

Fiduciary Guide. Helping to protect your plan. MetLife Resources Fiduciary Guide Helping to protect your plan. MetLife Resources Table of Contents Introduction..........................................................................1 MetLife s Commitment.................................................................

More information

The Department of Labor ( DOL ) recently issued proposed regulations

The Department of Labor ( DOL ) recently issued proposed regulations Proposed Labor Regulations Would Require Greater Disclosures of Fees, Compensation, and Conflicts of Interest for Employee Benefit Plan Services Providers PETER M. VARNEY AND PATRICK C. DICARLO The authors

More information

Fiduciary toolkit for financial professionals

Fiduciary toolkit for financial professionals Fiduciary toolkit for financial professionals For financial advisor use only. Not for distribution to retail investors. Vanguard is your partner to help guide you and your clients in addressing fiduciary

More information

Choosing a 401k plan Advisor?

Choosing a 401k plan Advisor? Choosing a 401k plan Advisor? Why is choosing a 401k service provider and/or a 401k plan Advisor a major decision? Because unlike most day to day work-related decisions these are fiduciary decisions. A

More information

Employee Benefits & Investment Management Update

Employee Benefits & Investment Management Update Employee Benefits & Investment Management Update Department of Labor Revises Investment Advice Definition May 2015 On April 14, 2015, the Department of Labor (Department) released a long-awaited proposed

More information

Fee transparency and best practices for plan sponsors

Fee transparency and best practices for plan sponsors Fee transparency and best practices for plan sponsors Prepared by The Wagner Law Group What s inside 2 Executive summary 3 Introduction 4 Underlying reasons for complexity of 401(k) plan fees 6 Potential

More information

Why Advisors Will Benefit and Add Value Using a 3(38) Investment Fiduciary

Why Advisors Will Benefit and Add Value Using a 3(38) Investment Fiduciary Why Advisors Will Benefit and Add Value Using a 3(38) Investment Fiduciary Defining the roles between a 3(38) Investment Fiduciary and a Plan Advisor offering non fiduciary services. Protecting both the

More information

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case :-cv-0 Document Filed 0/0/ Page of 0 0 JANET M. HEROLD Regional Solicitor IAN H. ELIASOPH (CSBN Counsel for ERISA GRACE A. KIM, Trial Attorney (CSBN Office of the Solicitor United States Department

More information

A Fiduciary s s Duty to Monitor Service Providers and Procedural Obligations

A Fiduciary s s Duty to Monitor Service Providers and Procedural Obligations A Fiduciary s s Duty to Monitor Service Providers and Procedural Obligations THE 31 st ANNUAL ESOP ASSOCIATION CONFERENCE May 13-14, 2008 Washington, D.C. Stephen D. Smith, Partner Krieg DeVault LLP 317.636.4341

More information

Fiduciary Responsibility

Fiduciary Responsibility FIDUCIARY RESPONSIBILITY OF RETIREMENT BOARD MEMBERS AND STAFF Barbara Phillips, General Counsel Derek Moitoso, Associate General Counsel PERAC 2010 Spring MACRS Conference Fiduciary Responsibility What

More information

Client Update Final DOL Fiduciary Rules Simplify Some Mechanics, but Retain Core Principles... and Flaws

Client Update Final DOL Fiduciary Rules Simplify Some Mechanics, but Retain Core Principles... and Flaws 1 Client Update Final DOL Fiduciary Rules Simplify Some Mechanics, but Retain Core Principles... and Flaws NEW YORK Lawrence K. Cagney lkcagney@debevoise.com Jonathan F. Lewis jflewis@debevoise.com Lee

More information

Understanding Retirement Plan Fees and Expenses

Understanding Retirement Plan Fees and Expenses Understanding Retirement Plan Fees and Expenses To view this and other EBSA publications, visit the agency s Web site at: www.dol.gov/ebsa. To order publications, contact us electronically at: www.askebsa.dol.gov.

More information

ERISA Procedural Prudence: The Appropriate Standard for Selecting an Annuity Provider

ERISA Procedural Prudence: The Appropriate Standard for Selecting an Annuity Provider ERISA Procedural Prudence: The Appropriate Standard for Selecting an Annuity Provider B y J o s e p h B. B e l l e r s e n, J r. a n d A l f r e d A. T u r c o Selecting an annuity provider begins with

More information

Service Provider Fee Disclosure

Service Provider Fee Disclosure Service Provider Fee Disclosure ERISA 408(b)(2) Regulations WILLAMETTE UNIVERSITY WILLAMETTE UNIVERSITY DEFINED CONTRIBUTION RETIREMENT PLAN VALIC Annuity Contracts The Employee Retirement Income Security

More information

SAMPLE INSURANCE BROKER COMPENSATION DISCLOSURE

SAMPLE INSURANCE BROKER COMPENSATION DISCLOSURE SAMPLE INSURANCE BROKER COMPENSATION DISCLOSURE (For Use by Insurance Brokers in Providing Disclosures To Retirement Plan Clients of Indirect Compensation Expected To Be Received From John Hancock Life

More information

SAMPLE REGISTERED INVESTMENT ADVISER COMPENSATION DISCLOSURE

SAMPLE REGISTERED INVESTMENT ADVISER COMPENSATION DISCLOSURE SAMPLE REGISTERED INVESTMENT ADVISER COMPENSATION DISCLOSURE (For Use by Registered Investment Advisers in Providing Disclosures of Compensation To Retirement Plan Clients Whose Plans are Funded by Group

More information

Retirement Plan Business Development - Proposal and Preparation

Retirement Plan Business Development - Proposal and Preparation Retirement Plan Business Development Guide Prospecting ideas and talking points Brochure is limited to use with partners working with Standard Retirement Services and StanCorp Equities, subsidiaries of

More information

Avoiding Fiduciary Liability In Real Estate Investments Made By Pension Plans

Avoiding Fiduciary Liability In Real Estate Investments Made By Pension Plans Avoiding Fiduciary Liability In Real Estate Investments Made By Pension Plans Stanley L. Iezman Stanley Iezman is Chairman of the Board and Chief Executive Officer of American Realty Advisors and is responsible

More information

401(k) Fiduciary Briefing

401(k) Fiduciary Briefing 401(k) Fiduciary Briefing 7 Steps to Help Plan Sponsors Mitigate Risk Presented by: John A. Frisch, CPA/PFS, CFP, AIF, PPC TM President, & Managing Partner, Qualified Plans Common 401(k) Plan Objectives

More information

ERISA Retirement Plans: Fiduciary Compliance and Risk Management for Investment Fund Selection and Fee Disclosures

ERISA Retirement Plans: Fiduciary Compliance and Risk Management for Investment Fund Selection and Fee Disclosures Presenting a live 90-minute webinar with interactive Q&A ERISA Retirement Plans: Fiduciary Compliance and Risk Management for Investment Fund Selection and Fee Disclosures Discharging Fiduciary Duties

More information

On Your Team. Toward Your Goal. UNIFI Companies Retirement Plans

On Your Team. Toward Your Goal. UNIFI Companies Retirement Plans FIDUCIARY investment safeguard SM On Your Team. Toward Your Goal. UNIFI Companies Retirement Plans RP 1351 8/08 FIDUCIARY INVESTMENT SAFEGUARd SM Let us help. Fiduciary Investment Safeguard is our warranty

More information

Company Stock Issues. Potential Litigation Issues and Best Practices when Hiring an Independent Fiduciary

Company Stock Issues. Potential Litigation Issues and Best Practices when Hiring an Independent Fiduciary Company Stock Issues Potential Litigation Issues and Best Practices when Hiring an Independent Fiduciary ERISA Provisions ERISA requires fiduciaries to: Act solely in the interest of plan participants

More information

Managing fiduciary responsibility for plan sponsors

Managing fiduciary responsibility for plan sponsors Managing fiduciary responsibility for plan sponsors Invesco PlanForward Foundations SM Putting fiduciary responsibility in action Contents 1 Defining fiduciary responsibility 4 Maximizing fiduciary protection

More information

A GUIDE TO RETIREMENT PLAN FEES & EXPENSES

A GUIDE TO RETIREMENT PLAN FEES & EXPENSES A GUIDE TO RETIREMENT PLAN FEES & EXPENSES WHITE PAPER DECEMBER 2013 Brian A. Montanez, AIF, CPC PRINCIPAL, MULTNOMAH GROUP Ronald J. Triche, Esq., APM* ASSISTANT GENERAL COUNSEL & DIRECTOR OF GOVERNMENT

More information

Fiduciary Duties and Responsibilities

Fiduciary Duties and Responsibilities Be a Prudent Fiduciary How to Select, Monitor and Assure That Your Providers Properly Exercise their Responsibilities and Assume Appropriate ERISA and Contractual Liability John H. McKendry, Jr. WHO IS

More information

Fiduciary Investment Guide

Fiduciary Investment Guide Fiduciary Investment Guide Helping to make it easier to understand fiduciary responsibilities. For employer use only. Not to be used with the public. Voya Financial is here to help you understand and navigate

More information

National Association of Government Defined Contribution Administrators, Inc. Plan Governance

National Association of Government Defined Contribution Administrators, Inc. Plan Governance Plan Governance 1 TABLE OF CONTENTS OVERVIEW... 1 PLAN Governance... 1 Oversight Options... 2 Fiduciary Responsibility... 3 Plan Documents... 4 Recommended Optional Documents: Bylaws, Policy Manuals, Investment

More information

February 2, 2011. Definition of the term Fiduciary under the Employee Retirement Income Security Act of 1974, as amended, Proposed Rule

February 2, 2011. Definition of the term Fiduciary under the Employee Retirement Income Security Act of 1974, as amended, Proposed Rule February 2, 2011 Office of Regulations and Interpretations Employee Benefits Security Administration Attn: Definition of Fiduciary Proposed Rule Room N-5655 U.S. Department of Labor 200 Constitution Avenue,

More information

Summary of DOL Regulatory Package Redefining Fiduciary Advice and Proposing or Amending Prohibited Transaction Class Exemptions

Summary of DOL Regulatory Package Redefining Fiduciary Advice and Proposing or Amending Prohibited Transaction Class Exemptions Summary of DOL Regulatory Package Redefining Fiduciary Advice and Proposing or Amending Prohibited Transaction Class Exemptions On April 20, the Department of Labor ( DOL ) proposed a package of regulations

More information

Retirement Plan RFPs. John H. McKendry, Jr. & Heidi A. Lyon. Warner Norcross & Judd LLP 2011

Retirement Plan RFPs. John H. McKendry, Jr. & Heidi A. Lyon. Warner Norcross & Judd LLP 2011 Retirement Plan RFPs John H. McKendry, Jr. & Heidi A. Lyon Warner Norcross & Judd LLP 2011 OVERVIEW Legal Background Methods for Selecting Providers RFP Process 22 Steps and Considerations Provider Models

More information

Fiduciary best practices:

Fiduciary best practices: Smart Paper Fiduciary best practices: Taking a prudent approach to plan management Contents Appointment of a fiduciary committee... 2 Additional considerations... 2 Written committee charter... 2 Periodic

More information

Responsibilities of Qualified Plan Fiduciaries and Staying Out of Trouble: Prohibited Transactions

Responsibilities of Qualified Plan Fiduciaries and Staying Out of Trouble: Prohibited Transactions chapter 9 and Staying Out of Trouble: Prohibited Transactions 2014 by Richard A. Naegele (Updated: 10/17/2014) chapter 9 and Staying Out of Trouble: Prohibited Transactions Table of Contents Part I:...

More information

Sweeping New DOL Proposal on Fiduciary Investment Advice

Sweeping New DOL Proposal on Fiduciary Investment Advice Sweeping New DOL Proposal on Fiduciary Investment Advice Edward E. Bintz, Edward A. Frueh, and Douglas S. Pelley April 2015 The long-anticipated proposed fiduciary regulation was released by the Department

More information

DOL s Fiduciary Rule & Related Exemptions

DOL s Fiduciary Rule & Related Exemptions DOL s Fiduciary Rule & Related Exemptions Presentation to ACLI Forum 500 Leadership Retreat May 2, 2016 Thomas Roberts The Landscape Fiduciary Status Investment advice for a fee or discretionary authority

More information

Fiduciary Responsibilities Under The ERISA Retirement Plan

Fiduciary Responsibilities Under The ERISA Retirement Plan Top 10 ERISA Fiduciary Duty Exposures And What To Do About Them Understand your fiduciary duties under ERISA and take steps now to protect yourself from future liability Mark E. Bokert 23 This chapter

More information

Not FDIC Insured May Lose Value Not Bank Guaranteed RETIREMENT FIDUCIARY FOCUS

Not FDIC Insured May Lose Value Not Bank Guaranteed RETIREMENT FIDUCIARY FOCUS USING ERISA ACCOUNTS TO HELP MANAGE FEE- RELATED FIDUCIARY RESPONSIBILITIES Not FDIC Insured May Lose Value Not Bank Guaranteed RETIREMENT FIDUCIARY FOCUS TABLE OF CONTENTS 1 Employer Fee Responsibilities

More information

FAQ: Independent Advisor Model

FAQ: Independent Advisor Model FAQ: Independent Advisor Model 1. What is an Independent Advisor Model? TIAA-CREF offers a platform for independent registered investment advisors that allows a plan sponsor to offer their employees the

More information

PTE 84-24 and Pension Plan Transactions Involving Insurance Agents or Brokers, Pension Consultants or Mutual Fund Principal Underwriters

PTE 84-24 and Pension Plan Transactions Involving Insurance Agents or Brokers, Pension Consultants or Mutual Fund Principal Underwriters PTE 84-24 and Pension Plan Transactions Involving Insurance Agents or Brokers, Pension Consultants or Mutual Fund Principal Underwriters If an insurance agent or broker, pension consultant or mutual fund

More information

IMPORTANT QUESTIONS YOU SHOULD ASK ABOUT

IMPORTANT QUESTIONS YOU SHOULD ASK ABOUT IMPORTANT QUESTIONS YOU SHOULD ASK ABOUT JAMES KIRBY ACCOUNTANCY CORPORATION JAMES KIRBY ACCOUNTANCY CORPORATION Registered Investment advisor 2601 Saturn Street, Suite 106 Brea, CA 92821 6702 (714) 203

More information

Meeting Your Fiduciary Responsibilities

Meeting Your Fiduciary Responsibilities The following information comes directly from a brochure prepared by The Department of Labor to help plan sponsors understand their fiduciary responsibilities. We are making this brochure available through

More information