Fiduciary and ERISA Consulting

PLAIN LANGUAGE OVER EQUITY: The Supreme Court Issues its Ruling in U.S. Airways, Inc. v. McCutchen

On April 16, 2013, the Supreme Court issued its opinion in U.S. Airways, Inc. v. McCutchen, — S. Ct. —-, 2013 WL 1567371 (2013), resolving a split among the circuits. We wrote about the lower court decisions in this case in our August 2012 newsletter. At issue in McCutchen was whether equitable defenses, such as […]

Seventh Circuit Finds No Fiduciary Liability for Financial Service Provider Receiving Revenue Sharing

In Leimkuehler v. American United Life Insurance Co., 713 F.3d 905 (7th Cir. 2013), the Seventh Circuit Court of Appeals addressed the receipt by a 401(k) plan’s financial service provider of “revenue sharing” payments from mutual funds. The Seventh Circuit affirmed the district court’s award of summary judgment to the defendant financial service provider, finding […]

The Perils of Offering a Company Stock Investment Alternative: A Closer Look at the Ninth Circuit’s Decision in Harris v. Amgen

The Ninth Circuit, in Harris v. Amgen, has reinstated an ERISA class action alleging that the defendants breached their fiduciary duties by offering company stock in two employer-sponsored plans. The court held that the defendants knew, or should have known, that the stock was sold at an artificially inflated price due to material omissions and […]

SHOW ME THE MONEY — The Ninth Circuit’s Decision in Bilyeu Poses Stricter Requirements for Recovering Plan Overpayments

On February 19, 2013, the U.S. Supreme Court declined to review the Ninth Circuit’s decision in Bilyeu v. Morgan Stanley Long Term Disability Plan, 683 F. 3d 1083 (2012), thereby maintaining a split among the federal circuit courts related to a plan sponsor’s reimbursement rights in an action for equitable relief under ERISA § 502(a)(3) […]

SPECIAL ALERT: Ninth Circuit Affirms Tibble v. Edison International: What Does This Decision Mean for Plan Fiduciaries?

ANGEL L. GARRETT and R. BRADFORD HUSS, March 2013 — On March 21, 2013, the Ninth Circuit issued its opinion in Tibble v. Edison International, affirming the district court’s decision in a case where participants alleged that 401(k) plan fiduciaries breached their duties of loyalty and prudence by including certain investment options in the plan, […]

SPECIAL ALERT: Court Throws Out DOL’s Challenge to Indemnification Agreement

The Department of Labor’s national enforcement initiative for employee stock ownership plans (“ESOPs”) is intended to identify and correct what the Department deems to be violations of the Employee Retirement Income Security Act (“ERISA”). As part of the initiative, the Department has been challenging the enforceability of industry-standard indemnification agreements between ESOP plan sponsors and […]

Department of Labor Issues Update to the Delinquent Filer Voluntary Compliance Program

On January 29, 2013, the Department of Labor (DOL) issued a notice announcing various changes to the Delinquent Filer Voluntary Compliance Program (DFVC Program), along with a Fact Sheet and Frequently Asked Questions. Although the DFVC Program has been periodically updated by the DOL over the last few years, the last comprehensive update was in […]

Resolutions for Effective Plan Governance

In keeping with the tradition of making a new year’s resolution, we suggest the following five resolutions that plan sponsors and fiduciaries can make in 2013 to encourage effective plan governance in the new year, and thereafter. One: Identify the plan fiduciaries. The best practices recommended in this article are only helpful if they are […]

Ninth Circuit Opines on Equitable Remedies under ERISA after the Supreme Court’s Amara Decision

The U.S. Ninth Circuit Court of Appeals has clarified two forms of equitable relief — reformation and surcharge — that may be available under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). In Skinner v. Northrop Grumman Retirement Plan B, a Ninth Circuit panel held that participants in a pension plan were […]

Department of Labor Issues FAQs on the Participant Fee Disclosure Rules

The Department of Labor (DOL) has recently issued Field Assistance Bulletin (FAB) 2012– 02, in a question and answer format, providing guidance on the participant fee disclosure rules. The FAB addresses various uncertainties in the final DOL regulations and provides needed clarification on a wide array of issues, including disclosure of general plan-related information and […]

401(k) Plan Fees in Turmoil: District Court in Tussey Finds Fiduciary Breaches but Third Circuit in Renfro Holds There Are None

There have been several recent court decisions of interest in some of the well-publicized lawsuits contesting the investment selections and the fees charged in a number of large corporate 401(k) plans. Sometimes reaching very different outcomes, these decisions concern the use of retail mutual funds in large plans, alleged breach of fiduciary duties in the […]

SPECIAL ALERT: Final Rule on 408(b)(2) has Finally Arrived

On February 3, 2012, eighteen months after announcing an interim final rule, the Department of Labor (“DOL”) published a final rule (“Final Rule”) adopting disclosure requirements for retirement plan service providers under Section 408(b)(2) of the Employee Retirement Income Security Act of 1974 (“ERISA”). The Final Rule requires “covered service providers” to disclose certain information […]

New Guidance on Electronic Delivery of Participant Disclosures

Beginning in May 2012 fiduciaries of participant-directed individual account plans, such as 401(k) plans, must provide additional disclosures to participants. We have previously written in detail about what information is required to be disclosed under Section 404(a) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and the 404(a) regulations (see our […]

DOL Issues Final Disclosure Regulation for Participant-Directed Individual Account Plans

The Department of Labor has released a final regulation (“Final Regulation”) under Section 404(a) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), requiring fiduciaries of participant-directed individual account plans to disclose certain plan and investment-related information, including fee and expense information, to participants and beneficiaries. The DOL states that the required […]

Proposed Regulation on When an Investment Advice Provider is a Fiduciary

On October 21, 2010, the U.S. Department of Labor (“DOL”) released a proposed regulation under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), to define more broadly the circumstances in which a person may be considered a “fiduciary” by reason of providing “investment advice” to an employee benefit plan or its participants. […]

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