Nevin & Fred Nevin Adams

In late April the Department of Labor (DOL) released the Retirement Security Rule, generally referred to as the “fiduciary rule.”  Nevin (Adams) and Fred (Reish) take a look at what’s changed —what hasn’t—and what it all means for retirement plan advisors.

This now-final rule updates and broadens the definition of an investment advice fiduciary under the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code (IRC).  In this new podcast episode, the
prolific podcasting pair ponder:

The impact(s) to retirement plan advisors who are already ERISA fiduciaries, and compliant with PTE 2020-02,

How the five-part test has changed,

The implications of the so-called “Hire Me” exception,

What changes to the “regular basis” criteria mean to the “drive-by” plan sale to plan sponsors.

On April 7, 2024, Nevin (Adams) & Fred (Reish) took their popular podcasting platform on the road to Nashville,
Tennessee, for a live version at the NAPA 401(k) Summit—in the middle of a solar eclipse!

In the second part of an expanded session, the prolific podcasting pair pointed to some takeaways from recent litigation trends including:

The importance of fiduciary training  New Fiduciary Suits, TDF Demographics and a Prudent Process Primer |
National Association of Plan Advisors (napa-net.org)

The meaning of “meaningful benchmarks” Lack of ‘Meaningful Benchmark’ Bounces (Another) 401(k) Excessive Fee Suit | National Association of Plan Advisors (napa-net.org)

Not to mention some predilections and predictions about the pending popularity and proclivities of pooled employer plans (PEPs).  PEPs Will Match Single Employer Plan Adoption in 5 to 10 Years: Fred | National Association of Plan Advisors (napa-net.org)

On April 7, 2024, Nevin (Adams) & Fred (Reish) took their popular podcasting platform on the road to Nashville, Tennessee, for a live version at the NAPA 401(k) Summit—in the middle of a solar eclipse!

During an expanded session, the prolific podcasting pair pointed to some takeaways from recent litigation trends including:

Why it’s important to know/read your plan document
(forfeiture reallocation suits);
Why you may not need an investment policy statement (but should have an investment policy and an engaged committee);  
How participant demographics could (should?) influence your target-date fund selection.

In a recent article on NAPA-Net, Fred Reish opined that PEPs—pooled employer plans—would come to dominate new plan adoption in the next five to 10 years. In this episode, Nevin (Adams) and Fred explore that possibility.

To make his case, Fred posed a counter-intuitive
argument, supposing that if we had started with a PEP architecture—one in which
most of the liability (and decisions and administrative work) was left to others—and holding forth an opinion that if we HAD started there, would plan sponsors have ever wanted to take on that “extra” work and liability. 

Well, regardless of what you think about that premise,
the reality is that we didn’t, and that might well change the outcome—or will it? In this episode Nevin & Fred will talk about PEPs’ prospects, the possibilities, the potential problems, and more.

Some recent suits – and federal court rulings – provide some timely reminders about the importance of a prudent process and following the plan document. 

In this podcast episode, Nevin (Adams) & Fred (Reish) discuss the background, issues, and implications behind:

(1) Suits regarding reallocation of forfeitures  - offsetting employer contributions: 401(k) Forfeiture Fiduciary Breach Suit Now Targets Tetra Tech | National Association
of Plan Advisors (napa-net.org)

(2) The importance of following the plan document:  DOL Successfully Sues Employer for Misuse of Forfeitures | National Association of Plan Advisors (napa-net.org)

(3) Fiduciary defendants prevail in two separate (and very different) cases because they had prudent, documented rocesses in place: Prudent Process Prevails (Again) in Proprietary Fund Suit | National Association of Plan Advisors (napa-net.org)

Breaking News: flexPATH Prevails in Suit Brought by Schlichter | National Association of Plan Advisors (napa-net.org)

(4) Participant suit challenging ESG “bias” of investment manager proxy voting clears motion to dismiss American Airlines Pilot’s 401(k) ESG Suit Clears Motion to Dismiss | National Association of Plan Advisors (napa-net.org)

UPDATE:  American Airlines Moves (Quickly) for Summary Judgment in ESG 401(k) Suit | National Association of Plan Advisors (napa-net.org)

 































Some recent suits – and
federal court rulings – provide some timely reminders about the importance of a
prudent process and following the plan document. 

In this podcast episode,
Nevin (Adams) & Fred (Reish) discuss the background, issues, and
implications behind:

(1) Suits regarding
reallocation of forfeitures  - offsetting employer contributions:

401(k)
Forfeiture Fiduciary Breach Suit Now Targets Tetra Tech | National Association
of Plan Advisors (napa-net.org)

(2) The importance of following the plan document: 

DOL Successfully Sues Employer for Misuse
of Forfeitures | National Association of Plan Advisors (napa-net.org)

(3) Fiduciary defendants prevail in two separate (and very
different) cases because they had prudent, documented processes in place>

Prudent Process
Prevails (Again) in Proprietary Fund Suit | National Association of Plan
Advisors (napa-net.org)

Breaking News: flexPATH
Prevails in Suit Brought by Schlichter | National Association of Plan Advisors
(napa-net.org)

(4) Participant suit
challenging ESG “bias” of investment manager proxy voting clears motion to
dismiss

American Airlines
Pilot’s 401(k) ESG Suit Clears Motion to Dismiss | National Association of Plan
Advisors (napa-net.org)

UPDATE:  American Airlines Moves
(Quickly) for Summary Judgment in ESG 401(k) Suit | National Association of
Plan Advisors (napa-net.org)

 

Another of the BlackRock TDF suits comes to a conclusion, the WSJ takes a peek at managed accounts—and Nevin and Fred ponder the implications for glidepaths.

To date only one of the dozen or so suits filed against plans that
had BlackRock’s LifePath TDFS have gotten past the motion to dismiss—suits that charged plan fiduciaries with “chasing low fees” and being inattentive to poor performance. 

In this episode, Nevin & Fred discuss those outcomes, the issue of TDF glidepaths generally, and the possibilities—and complexities—with a managed account solution, and what
they should include to be more than “just an expensive target-date fund.”