Newsletter for May 26, 2015
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In This Issue
Supreme Court's Tibble v. Edison Coverage
Supreme Court: Fiduciaries Have Ongoing Duty to Monitor Investments
Summary: Plan fiduciaries for 401k plans have a continuing duty -- separate from the duty to exercise prudence in selecting investments -- to monitor and remove imprudent investments, the U.S. Supreme Court held on May 18, 2015. The decision may increase litigation and stresses the importance of procedural prudence in administering a plan.
Source: Shrm.org
Tibble v. Edison: Actions Retirement Plan Fiduciaries Should Take
Summary: While many fiduciaries already actively monitor plan investment performance, the Supreme Court's decision is a reminder that plan fiduciaries may also be called upon to prove that they have done so. The Court's decision offers little guidance on what proof would be required, but article suggests several actions plan fiduciaries should take to help defend against any litigation and reduce the risk of liability.
Source: Quarles.com
What's Really Important About the Supreme Court's Tibble Decision
Summary: The U.S. Supreme Court released its long-awaited decision in Tibble v. Edison, holding that participants are not prevented from challenging a plan fiduciary's imprudent 401k investment choices if the investment was selected more than six years ago. Author discusses what the decision means for plan committees.
Source: Pensionsbenefitslaw.com
How Revenue Sharing May Be the Real Victims of SCOTUS's Tibble v. Edison Ruling
Summary: Plan fiduciaries need to understand the amounts of payments that are being made from funds they select, who's paying them and who is receiving them. Some believe the unanimous decision just handed down by the Supreme Court in Tibble v. Edison could impact mutual fund selection by delivering a broadside to two mainstays of advisory cash flow: 12(b)-1 fees and revenue sharing.
Source: Riabiz.com
It's Unanimous: The Fiduciary Duty to Monitor Has Teeth
Summary: The Supreme Court held in Tibble v. Edison that ERISA fiduciaries have a "continuing duty" to monitor investment options, and that plan participants have six years from the date of an alleged violation of that duty to file a lawsuit against the plan's fiduciaries. This ruling significantly undercuts the utility of a statute of limitations defense that had been successfully deployed by plan fiduciaries in previous cases, and creates fertile ground for more litigation.
Source: Benefitsinbrief.com
Supreme Court Decision Opens Door to More 401k Lawsuits
Summary: The Supreme Court issued a decision in Tibble v. Edison that could have far-reaching implications for how long a retirement plan participant has to sue an employer for breach of fiduciary duty in a 401k plan. Experts think the ruling is likely to result in additional litigation.
Source: Benefitnews.com
General Items
Tax Credit for Small Business Retirement Plan
Summary: When small business employers are deciding whether to establish a retirement plan, one hurdle they face is the expense involved with implementing the plan and educating the employees. But, there is a tax credit available to small business employers, which can be used to offset a portion of those expenses.
Source: Consultrms.com
Fiduciary and Plan Governance Material
Who Is Responsible for Service Provider Mistakes?
Summary: This case reflects the real world in that the plan sponsor is almost always the Plan Administrator with ultimate responsibility for plan operations. It follows that plan sponsors, as fiduciaries, could be saddled with liability for the conduct of non-fiduciary plan service providers.
Source: Retirementplanblog.com
How Will the DOL's Proposed Fiduciary Rule Change Affect the Plan Sponsor?
Summary: In order to understand how the DOL's proposed redefinition of the term fiduciary under ERISA will affect you as a plan sponsor, you must first understand the relationship you have with the current plan service providers. The reason it is important is the higher standard of care of prudence this causes them to be held to along with the limiting of liability for the plan sponsor or their retirement plan committee.
Source: Pension-Consultants.com
Best Practices for 401k Fees
Summary: Here are 10 steps designed to assist employer-fiduciaries in meeting their fee-related responsibilities, reducing the risk of fiduciary liability and increasing the value of the employer's 401k plan to participants.
Source: Poynerspruill.com
Items of Special Interest to Service Providers
DOL's Proposed Fiduciary Definition Would Bring Many Service Providers Into Scope
Summary: This white paper examines the reproposed changes to the definition of an "invest. advice fiduciary" for purposes of ERISA standards of fiduciary conduct and the prohibited transaction rules under ERISA and section 4975 of the Internal Revenue Code. It also covers the DOL's six proposed "carve-outs" from fiduciary status.
Source: Morganlewis.com
Two-headed Nightmare: The Robos and the DOL
Summary: The robo-advice threat and the DOL conflict-of-interest threat are two parts of the same threat to traditional distribution. Both aim to make the distribution of financial products and services less expensive, more objective and more transparent, i.e., more consumer-friendly. Of the two, you should be more worried about the digital threat.
Source: Linkedin.com
Forget Fiduciary: Real Battle Coming Over Harmonization
Summary: MarketCounsel's chief says the DOL fiduciary plan is an end run around the SEC, but the real battle is the ongoing push to harmonize BD and RIA rules.
Source: Thinkadvisor.com
Target-Date Funds
Considering and Evaluating Target-Date Glide Paths
Summary: The majority of U.S. workers will look to their DC plan to replace 30% or more of their pre-retirement income. The likelihood of achieving this goal should be the measure by which plan fiduciaries select and evaluate QDIAs. The Objective-Aligned Glide Path has the potential to improve the probability of a participant having the real retirement income they need.
Source: Pimco.com
Compliance and Regulatory Related
Qualified Retirement Plan Check-Up -- Affiliated Service Groups
Summary: This article reviews the affiliated service group rules as the rules pertain to the various qualification requirements applicable to retirement plans.
Source: Benefitslawinsider.com
Tips for Preparing for Your Employee Benefit Plan Audit
Summary: How do you tackle an employee benefit plan audit? Here are some planning tips that will make the process easier and more efficient.
Source: Dgccpa.com
Marketplace News
401k Sales Champion Online Workshop Updated
TRAK-Online for Mobile Devices Introduced
SageView Adds Consultant to Northeast Practice
Ubiquity Retirement Adds Sales Strategist John Farmakis
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