Benefits & ERISA Law

What Can We Learn From a List of the Best 401(k) Plans?

Posted on March 31, 2011
Funny, this chart from Bloomberg on the top rated 401(k) plans in the country, taken from the BrightScope data. When I first discovered BrightScope's beta site and blogged on it, I was struck by the fact that if you want a good retirement, you should go to work for the Saudi Arabian oil company...

Fiduciary Definitions Change Hand in Hand with the Real World

Posted on March 22, 2011
One underlying theme of much commentary about 401(k) plans is the idea that their replacement of pensions as the primary retirement vehicle for most private sector workers was not intended, and is the walking, talking example of the law of unintended consequences...

Pozek on Werewolves

Posted on March 18, 2011
I have mentioned to people in the past that I am reasonably confident that I am the only author of legal information who has managed to link Walker Percy, denied benefit claims and ERISA in the same publication, which I did here in this post. I think that's a pretty good stupid human trick myself...

Adam and John on the Obligations of Reasonableness and the Problems with SPDs, Respectively

Posted on March 07, 2011
Well, geez, I am embarrassed by the awkward silence in this space over the past couple of weeks. I was out of the country on business for a bit, and digging out ever since. Not that I ever lost sight of the ball, though, as I kept jotting down stories and developments that I wanted to pass along in a blog post...

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Book Review of "General Liability Insurance Coverage: Key Issues in Every State"

Posted on February 16, 2011
Why do I blog? For the swag, of course. Well, no, not really, but I did just receive a review copy of Randy Maniloff and Jeffrey Stempel's new General Liability Insurance Coverage deskbook, and it is tremendous. The book bears the subtitle 'Key Issues in Every State,' and that phrase on the book's cover is a perfect example of truth in advertising...

Me, Behavioral Finance and PlanSponsor Magazine

Posted on February 08, 2011
Alert reader Tom Obara of Cassidy Retirement Group here in Massachusetts - or as I have taken to calling it during this perpetually snowy winter, East Dakota - passed along to me an article on behavioral finance in January's issue of PlanSponsor in which I am quoted on the need for plan sponsors to adequately educate and inform plan participants about investment options and the risks they pose...

Directors and Officers Coverage, Exclusions and the Magic Words "In Fact"

Posted on February 07, 2011
Here is a terrific article on the lessons about directors and officers insurance that should be taken from a series of rulings that eventually ended coverage for the Stanford Financial executives. I have said many times that because the scope of D & O insurance is so dependent on the scope of the exclusions, it is important to analyze and understand them when the policy is being acquired, and not wait until after a claim is made, when it may well be too late...

On Problems in the Sponsor/Third Party Administrator Relationship

Posted on February 04, 2011
Ouch. Here's the story of a payroll company that overpaid salary for years to an employee of its client company, because that employee was authorized to provide the payroll company with payroll information and direct it to issue payments; according to the case, she requested additional payments to herself and the payroll company made those payments...

On Spano and Certifying Classes in Defined Contribution Cases

Posted on January 31, 2011
Here is a nice article from Planadviser.com that sums up the recent opinion out of the Seventh Circuit that I discussed the other day in this post, on the propriety of certifying classes of plan participants in excessive fee cases. The article does a nice job of summing up the findings on that issue, if you don't want to read the court's fairly long, but well written analysis of the issue...

How Much Has MetLife v. Glenn Changed the World?

Posted on January 27, 2011
I have been blogging long enough that I can bore people by pontificating about how blogging was easier back in the old days. It's actually true though, to some extent, at least with regard to my blog, and that's because when I first started blogging, Paul Secunda, at the Workplace Prof blog, was still posting regularly on scholarly and legal developments concerning ERISA...

Class Actions, the Diamond Hypothetical and the Seventh Circuit

Posted on January 26, 2011
I have written before about the various implications of the Supreme Court broadening fiduciary duty claims in LaRue to allow individual participants to sue for losses only to their own accounts, rather than just for harms suffered by all participants, or in other words, by the plan as a whole; among other aspects, I have discussed its interplay with the class action rules, and the importance for the development of the law of ERISA of the Court's distinction in that case between defined benefit plans and defined contribution plans...

The Ever Evolving Risks of Fiduciaries

Posted on January 19, 2011
Well, I am not sure I could have said this better myself, although in post after post, I have spoken of the increasing litigation risk for fiduciaries, and of the need to respond by emphasizing compliance and diligence in designing and running 401(k) plans...

When Does Exhaustion of Administrative Remedies Really Require Exhaustion

Posted on January 18, 2011
Like most lawyers who represent plans or their administrators in denied benefit disputes, one of the first things I check when a participant's complaint is forwarded to me is whether the participant exhausted all review opportunities with the plan's administrator...

On Disclosure and Conflicts of Interest

Posted on January 14, 2011
In my life as a trial lawyer, I have found myself in a recurrent situation, in which a judge or an arbitrator eventually looks at me in an argument over discovery and asks if I really want the information I am after, as it could run against me. I always answer the same way, to the effect that I am comfortable with facts, believe that more information is more likely to lead to the just result in the case, that I will trust the facts to show us which way to go, and that I am more than willing to let the facts come out in the open and drive the case...

Interview in Fiduciary News

Posted on January 11, 2011
I have written before, on many occasions, about the evolving nature of fiduciary status, and in particular on the shifting regulatory landscape in this regard. Here is an interview I gave to Fiduciary News on the latest proposed Department of Labor regulatory change concerning the meaning of the word fiduciary in the ERISA context...

Drum Roll Please . . . The Top Ten Insurance Coverage Decisions of 2010

Posted on December 30, 2010
Nothing proliferates around the New Year like top ten lists; I blame David Letterman for it, and believe some academic somewhere in a popular culture department should examine the pre- and post - Letterman frequency of top ten lists in American society...

Talking About Compliance is Cheap - Taking Action On Compliance Is What Matters

Posted on December 30, 2010
I talk regularly, of course, about the importance of compliance in the operation of ERISA plans - just take a look at my immediately preceding post for instance - but that is just a fancy way of restating the old saw that an ounce of prevention (in the form of a well run plan) is worth a pound of cure...

Market Down? Then ERISA Lawsuits Must Be Up

Posted on December 23, 2010
I tell people all the time when I speak at seminars that compliance is key because in a downturn, participants will sue plans and their fiduciaries over things they just ignored when the markets just kept going up, up and up, with participants' account balances doing the same...

Looking Under the Hood at Public Pension Obligations Isn't Pretty

Posted on December 23, 2010
There is almost nothing I can add to this extremely sad story two days before Christmas, other than to point out that, for the criticism ERISA takes for preemption and its limited scope of remedies, the structure has done a pretty good job of accomplishing its true initial goal, which was to keep private pension plans from winding up like the public pension plan in Prichard Alabama...

Governmental Plans, Annuities, and the Intersection of ERISA with the Securities Laws

Posted on December 22, 2010
I have discussed in many posts the idea that the plaintiffs' class action bar has alighted on ERISA and breach of fiduciary duty claims as a preferable tactical alternative, in many cases, to proceeding under the securities laws. This approach was a particularly nice fit for stock drop cases, in which company stock held in employee benefit plans rendered ERISA, and its relatively - at least compared to the securities laws - more malleable breach of fiduciary duty doctrines, a viable approach to seeking recovery for precipitous declines in company stock prices...

Derivatives + No Transparency = Fiduciary Breach?

Posted on December 13, 2010
Can a fiduciary of a pension plan or other employee retirement account trade in derivatives without breaching his fiduciary duty? If this article from the New York Times is to be believed, then the answer is really no. If there is no transparency to fees and costs of the undertaking, than, theoretically, a fiduciary cannot truthfully say whether or not the transaction is financially appropriate in light of its costs to the plan and whether the assets of the plan are in turn being handled properly...

Misleading Summary Plan Descriptions and the Supreme Court

Posted on December 09, 2010
I have been keeping my eye out for an article on the CIGNA Corp. v. Amara case before the Supreme Court - argued a little over a week ago - that focuses more on the practical realities of the case for plan sponsors and participants, rather than on the 'inside baseball' analysis of the lawyers and their arguments, which were all the rage in the immediate aftermath of the argument before the high court...

Of Fiduciaries and Liability

Posted on November 29, 2010
I have spoken before of the Department of Labor's regulatory initiatives to target fee setting and disclosure issues, and how they are likely to expand fiduciary liability related to the expenses of 401(k) investment options. Of a piece is the Department of Labor's yet more recent regulatory initiative to expand the scope of advisors who can qualify as fiduciaries, which, if and when enacted, will by definition expand the number of fiduciaries and the potential number of parties liable for problems in a plan or its investments...

The Lesson in the Chicago Tribune ESOP Mess

Posted on November 19, 2010
Here's a great story on the latest developments in the breach of fiduciary duty lawsuit arising out of the use of the Tribune's ESOP assets as part of a complicated leveraged buy out. For some really deep background on this case, you can check out my post here from when the case commenced...

Fees, Fees and More Fees - Once Again

Posted on November 16, 2010
I wanted to say that much ink has been spilled over the Department of Labor's regulatory initiatives concerning fee disclosure, but no one really uses ink anymore, and we all just post on the internet, in either blogs or in intermediary sites that publish law firm client advisories...

Percentage Players Die Broke Too

Posted on November 04, 2010
I have always wanted to write another blog about trial tactics and litigation strategy, and call it Percentage Players Die Broke Too, after the famous line by Paul Newman in the world's finest film, The Hustler (that's the first one, mind you, not the embarrassing sequel they did with Tom Cruise many decades later)...

Does LaRue Alter the Rules for Class Actions?

Posted on October 29, 2010
As a general rule, I don't write blog posts about cases I am handling. For the most part, nothing good can come of it. I do make an exception once and awhile, but only to the extent of passing along a particular ruling, without commentary, that may be of broader relevance and interest...

Fees, Fees, and More Fees

Posted on October 26, 2010
Investment option fees are the current bête noire of 401(k) plans, but to date the government response to them has not been a direct attack on the amount of fees themselves, in the form of regulatory or legislative establishment of appropriate ranges of fees...

Depends on What You Mean By "Related"

Posted on October 18, 2010
Well, here's a story on an unpublished Ninth Circuit decision on the impact on the duty to defend of related claims provisions in claims made insurance policies. Although policies vary in the language and structure they use to accomplish it, these provisions essentially declare a claim made during a policy period to be linked to earlier events or an earlier claim if they all arise from related events, with there being no coverage if the earlier related events occurred before the policy period of the policy under which coverage is being sought...

In the More Things Change Department . . .

Posted on October 13, 2010
I mentioned in a prior post that I was speaking on a panel with David Webber of Boston University Law School. David's blog, Labor Capital, has a nice post on the financial weakness of public pension plans, and the questionable financial transactions that have led to it; you can find it here...

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