02.03.2021 03.16 CST
Plaintiffs’ must use truly comparable benchmarks in claiming imprudent fiduciary decisions.
A recent court case provides some potentially valuable guidance into ways plan fiduciaries can approach fiduciary litigation. Most importantly, the case could force plaintiffs to focus on truly comparable situations in alleging that a plan’s actions were imprudent--this would limit plaintiffs’ ability to use, as benchmarks of prudent behavior, general industry data or different categories of investments (such as comparing index funds to actively managed funds).
08.05.2018 07.03 CDT
The latest court decision invalidating the DOL’s proposed rewrite of the fiduciary rules adds more uncertainty for plan fiduciaries. How do fiduciaries get past the “noise” of conflicting courts and regulators and go about the business of protect plan interests?
Nature Abhors a Vacuum – and So Should Fiduciaries
Conflicting court opinions, dueling regulators and uncertain direction from the executive branch are making it harder for plan fiduciaries to do their jobs.
The U.S. Court of Appeals for the Fifth Circuit decision to invalidate the DOL’s new fiduciary rule is the latest in a string of confusing (and often conflicting) messages to plan fiduciaries. However, fiduciary duties under ERISA are grounded in some core principles that have not changed. The legal confusion surrounding certain fiduciary issues cannot obstruct fiduciaries’ execution of those duties.
07.02.2018 07.00 CST
A new chapter may be opening in the ongoing saga of litigation against plan fiduciaries. A new target in this sage - plan vendors’ use of participant confidential financial to facilitate the cross-sales of non-plan financial products.
Plaintiffs in the lawsuit against the NYU retirement plans have filed an amended complaint. This new complaint challenges the use, by the plans’ recordkeeper, of participant confidential financial data and the recordkeeper’s cross-selling of non-plan financial products to plan participants.
15.10.2017 10.06 CDT
Lawsuits challenging the fiduciary practices of major colleges and universities have survived motions to dismiss. And so, the legal battles over plan costs will continue.
Higher Ed Fiduciary Lawsuits: A Scorecard and Some Observations
Over the past few months, decisions have been issued in six of these cases (the suits against MIT, The University of Pennsylvania, Johns Hopkins, NYU, Duke and Emory). Here are some comments on this first round of decisions.
The first round of court decisions has been issued in the fiduciary challenges to major colleges and universities. Overall, the courts have been allowed the core allegations - that the schools breached their fiduciary duties by allowing the plans to pay excessive fees – to continue. These decisions increase the likelihood that other schools will be subject to copycat fiduciary litigation.
22.09.2017 10.04 CDT
: It is for plan administration to diverge from plan documents. It is also risky.
Two recent cases (Acosta v. Macy’s, Inc. and Erwood v. Life Ins. Company of North America) serve as reminders of how easy it is for plan administrative practices to diverge from plan documents. The cases also illustrate the risks of allowing this to happen.