Current Events

Fiduciary rule update – August 2017

August 16, 2017

In this article we briefly discuss three recent developments with respect to the Department of Labor’s controversial 2016 Fiduciary Rule: DOL’s proposed further extension of the full applicability date of the Best Interest Contract (BIC) Exemption; recently issued FAQs clarifying that, generally, a person may encourage a participant to save without triggering fiduciary status; and oral arguments in the appeal of the district court’s decision (in favor of DOL) in litigation challenging the rule. Read More

Distributed ledger technology and retirement savings infrastructure – part 1

August 14, 2017

Retirement plan sponsors are under constant pressure to reduce costs. In an era of decreasing investment returns and limited budgets, investment and administrative overhead is a target of management, policymakers, regulators and litigators. The bleeding edge of all this is the near-tsunami of 401(k) plan fee cases brought against plan fiduciaries over the last 10 years. Read More

Missing participants – part 2

July 27, 2017

“Missing participants” is becoming a target issue for regulators and policymakers. In our first article in this series we discussed DOL’s missing participant audit project and Field Assistance Bulletin 2014-01 – fiduciary obligations with respect to missing participants in terminated defined contribution plans. In this article we discuss the Pension Benefit Guaranty Corporation’s 2016 proposal to expand and modify its missing participant program. Read More

Missing participants – part 1

July 26, 2017

There are widespread reports of Department of Labor audits focusing on plan procedures with respect to “missing participants.” As we understand it, this audit/enforcement effort began in early 2016 and initially focused on large defined benefit plan procedures for missing participants in connection with the minimum distribution requirements. DOL is treating the failure to adopt and follow adequate missing participant search procedures as a fiduciary breach and (it is reported) a possible prohibited transaction. DOL is also, as we understand it, challenging certain plan policies that apply when a participant cannot be found, e.g., certain forfeiture practices. Read More

Fidelity wins stable value lawsuit

July 17, 2017

On June 19, 2017, the US District Court for Massachusetts handed down a decision for the defendant in Ellis v. Fidelity. Plaintiffs were two participants in the Barnes & Noble 401(k) plan, representing a class including all participants in defined contribution employee pension benefit plans investing in the Fidelity Group Employee Benefit Plan Managed Income Portfolio (“Portfolio”) (a stable value fund (SVF) managed by Fidelity), beginning January 1, 2010. Read More

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