Fiduciary and ERISA Consulting

2006 Updates to the Voluntary Fiduciary Correction Program

The Voluntary Fiduciary Correction Program (“VFC Program”), issued by the Employee Benefits Security Administration of the Department of Labor, is designed to encourage self-correction of certain violations of the Employee Retirement Income Security Act of 1974. The VFC Program was permanently adopted in 2002 and revised in 2005. In April 2006 the DOL issued further […]

DOL Provides New Guidance Regarding IRA Investments and the Prohibited Transaction Rules (ERISA Opinion Letter 2006–01A)

Amounts held under individual retirement accounts (“IRAs”) can be a substantial source of retirement income. The growth of 401(k) plans and other defined contribution plans (as opposed to traditional defined benefit pension plans) has generated additional opportunities for employees and retirees to use IRAs. A defined contribution plan may offer a lump sum form of […]

Recent Disney Decision Emphasizes that Norms for Corporate Governance Change with the Times

The recent decision by the Delaware Chancery Court in In Re the Walt Disney Co. Derivative Litigation, C.A. No. 15452 (August 9, 2005) has spurred much discussion regarding its implications for corporate governance. In this case, the plaintiffs, who were stockholders of the Walt Disney Company, alleged that the Members of the Disney Board of […]

ERISA Considerations When a Plan Invests in Hedge Funds and Private Equity Funds

Introduction When a plan fiduciary contemplates investing plan assets in any type of investment, there must always be considerations of prudence, both in the process of making the decision and in the decision to invest. For some types of investment vehicles, though, there can be additional concerns, such as the possibility of prohibited transactions or […]

DOL and SEC Issue Guidance For Plan Fiduciaries in Evaluating Investment Consultants

On June 1, 2005, the Department of Labor (“DOL”) and the Securities and Exchange Commission (“SEC”) jointly released tips to help ERISA plan fiduciaries in selecting and monitoring “pension consultants.” These recommendations were made in response to a May 16, 2005 report issued by the SEC, which raised concerns as to whether pension consultants were […]

FAB 2002–3: Handling Float Issues Between Financial Service Providers and ERISA Qualified Plans

In November 2002, the Department of Labor (“DOL”) issued Field Assistance Bulletin 2002–3 (“FAB 2002–3”) to fill a perceived gap in guidance on float, hoping that plan fiduciaries will review their plans for compliance and take steps to protect themselves from overcompensating their service providers. FAB 2002–3 provides guidance to financial service providers and plan […]

Recent Court Decision Regarding Divestment of Company Stock Has Important Implications for the Drafting of Plan Documents

A recent federal district court decision highlights the potential protection that can be provided against liability for breach of fiduciary duty under ERISA by the “settlor function” doctrine when plan investment decisions are incorporated into the terms of the plan document by amendment. Tatum v. R.J. Reynolds Tobacco Company On December 10, 2003, the U.S. […]

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