Fiduciary and ERISA Consulting

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. […]

Interim Final Rule Requires Disclosure of Information by Service Providers to Retirement Plans

On July 15, 2010, the Department of Labor (“DOL”) took a significant step in finalizing a regulation meant to provide retirement plan fiduciaries with the information they need to determine the reasonableness of compensation paid to service providers and to assess how those services are affected by potential conflicts of interest. The interim final rule […]

Supreme Court Rules on Awarding Attorney’s Fees in ERISA Cases, and on the Deferential Standard of Review

In its second significant ERISA decision in as many months, the U.S. Supreme Court ruled in May that a court may award an ERISA litigant attorney’s fees even if it does not actually “prevail” in its case. Earlier, in an April decision, the Court reaffirmed the vitality of the deferential standard of review that ERISA […]

DOL Issues Final Regulation Creating Optional 7-Business Day Safe Harbor Period For Small Plans

On January 14, 2010, the Department of Labor (“DOL”) published a final regulation (29 CFR 2510.3–102) (“Regulation”) which creates an optional safe harbor period for small plans for the timely deposit of participant contributions. During this period, amounts that an employer has received from employees or withheld from wages for contributions to contributory group welfare […]

Electronic Delivery of Plan Information

E-mail and internal or external web sites are the communication tools of choice for many (if not most) Plan Sponsors and Plan Administrators. When electronically delivering documents or when setting up a web site, it’s easy to overlook the following: Disclaimers When a third party sets up a web site for plan participants, the web […]

Plan Sponsor and Service Providers Victorious in Seventh Circuit Ruling on 401(k) Plan Fee Lawsuit

Issuing a much anticipated opinion, the U.S. Court of Appeals for the Seventh Circuit held that a 401(k) plan sponsor, a mutual fund investment advisor and an affiliated trustee were not subject to suit for providing investment options with allegedly excessive and unreasonable fees and failing to disclose revenue-sharing arrangements between the mutual fund investment […]

Department of Labor Issues Proposed Regulations and Class Exemption Regarding Investment Advice

On August 22, 2008, the Department of Labor (“DOL”) issued proposed regulations and a proposed class exemption which implement the statutory prohibited transaction exemption for the provision of investment advice under the amendments made by the Pension Protection Act of 2006 (“PPA”) to the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Internal […]

DOL Issues Proposed Regulations on Disclosure to Plan Participants of Fees and Investment Alternatives

Amid a background of 401(k) fee litigation brought by plan participants, and Congressional fee disclosure proposals, the Employee Benefits Security Administration of the Department of Labor (“DOL”) has released proposed regulations under ERISA section 404(a) (“proposed regulations”) that would require enhanced disclosure by plan fiduciaries of information concerning investment alternatives and fees to participants in […]

MetLife v. Glenn: The Supreme Court Clarifies the Standard of Review for Decisions by Conflicted Plan Administrators

The U.S. Supreme Court’s recent ruling in Metropolitan Life Insurance v. Glenn (“MetLife”) attempted to answer two questions concerning ERISA benefits litigation, both of which have been a source of disagreement among the circuit courts of appeals: Does an entity that both funds benefits and decides claims operate under a conflict of interest? If such […]

The Department of Labor Amends and Supplements Qualified Default Investment Alternative Regulation

In April, plan fiduciaries received further guidance from the Department of Labor (the “Department”) regarding the administration of Qualified Default Investment Alternatives (“QDIAs”) — investments made by plan fiduciaries on behalf of participants or beneficiaries in individual account plans who fail to direct the investment of assets. The Department’s Field Assistance Bulletin No. 2008–03 (“FAB”), […]

DOL Issues Proposed Regulations Requiring Disclosure of Service Provider Fees and Conflicts of Interest

On December 13, 2007, the Department of Labor (“DOL”) issued proposed regulations under Section 408(b)(2) of the Employee Retirement Income Security Act of 1974 (“ERISA”) that would require plan service providers to provide more comprehensive written disclosure to the plan fiduciary who has authority on behalf of the plan to enter into an arrangement with […]

DOL Issues Final Regulation on Qualified Default Investment Alternatives

The Department of Labor has issued the long awaited final regulation implementing the provisions of the Pension Protection Act of 2006 (“PPA”) relating to a qualified default investment alternative (“QDIA”) in individual account plans, such as 401(k) plans. The final regulation shields fiduciaries of individual account plans from some of the liability associated with investing […]

New Developments Regarding ‘Investment Advice Arrangements’ under the Pension Protection Act

Before enactment of the Pension Protection Act of 2006 (PPA), a dichotomy of sorts had emerged regarding the provision of investment information to participants in an ERISA-governed plan. Plan fiduciaries were fairly comfortable that offering “investment education” to participants was both commendable and relatively risk-free for the plan fiduciaries. In contrast, the provision of “investment […]

DOL Issues Proposed Regulations on Default Investments

On September 27, 2006, the Department of Labor (“DOL”) issued proposed regulations implementing provisions of the recently enacted Pension Protection Act of 2006 (“PPA”) relating to default investment of plan assets in individual account plans (e.g., Internal Revenue Code section 401(k) plans). The proposed rules shield fiduciaries of individual account plans from liability for automatic […]

The Pension Protection Act and Fiduciary Aspects of Automatic Enrollment in 401(k) Plans

The recently enacted Pension Protection Act of 2006 (the “PPA”) makes some of the most sweeping revisions to employee benefits law since the enactment of ERISA. Many provisions of the PPA have delayed effective dates, and we will be reporting on various aspects of the new law in upcoming issues of Benefits Report. The PPA […]

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