18.05.2018 09.49 CDT
Financial firms have both the opportunity and the financial motivation to move customers from employer-sponsored plans to individual products, such as retail managed accounts and annuities. An investigation of Wells Fargo bank may disclose whether the bank succumbed to the temptation.
Wells Fargo bank is reportedly under investigation for practices in the bank’s retirement plan division. The investigation apparently focuses on practices that may have been intended to move clients from employer-sponsored plans into more expensive individual retirement accounts when they leave their jobs. If these reports are accurate it may help shine a light on industry practices that contribute to plan “leakage.”
19.03.2018 04.01 CDT
A new court decision could give the Administration an opportunity to completely withdraw the regulations expanding ERISA’s definition of fiduciary and limit the ability to expand the scope of ERISA’s fiduciary protections in the future.
Court of Appeals Strikes Down Fiduciary Rule
The U.S. Court of Appeals for the Fifth Circuit has issued an opinion striking down the DOL’s new fiduciary rule. The decision will add more (unwelcome) uncertainty.
On March 15 the U.S. Court of Appeals for the Fifth Circuit struck down the DOL’s new fiduciary rule. The decision, in very sweeping terms, concluded that the DOL did not have the regulatory authority to expand the previous definition of “fiduciary” contained in 1975 regulations. The breadth of the Court’s ruling, if upheld, makes it virtually impossible for the DOL to somehow modify the fiduciary proposal or to issue new fiduciary rules.
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.
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.