Category: fiduciary


Best Practices for Plan Sponsors #8

Posted on May 21, 2019, by Todd Anderson in best practices, fiduciary. Comments Off on Best Practices for Plan Sponsors #8

Best Practices: Lessons Learned from Litigation—the Anthem Case

I am writing two series of articles that together are called “The Bests.” One is about Best Practices for Plan Sponsors, while the other is about the Best Interest Standard of Care for Advisors. Each series is numbered separately to make it easier to identify the articles that are most relevant to you.

This is the eighth of the series about Best Practices for Plan Sponsors.

Plan sponsors should be aware of the latest trends in fiduciary litigation in order to develop practices to manage the risk of being sued and, if sued, of being liable. The recent settlement of the Anthem case is a good example of the importance of using appropriate share classes and of other practices in selecting investments and monitoring service providers. This article discusses the complaint, the settlement and risk … Read More »

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Best Practices for Plan Sponsors #7

Posted on February 12, 2019, by Fred Reish in 401(k), best practices, fiduciary, Plan Sponsors, Recordkeeper. Comments Off on Best Practices for Plan Sponsors #7

Best Practices: Plan Success by the Numbers (Part 1)

I am writing two series of articles that together are called “The Bests.” One is about Best Practices for plan sponsors, while the other is about the Best Interest Standard of Care for advisors. Each series is numbered separately to make it easier to identify the subject that is most relevant to you.

This is the seventh of the series about Best Practices for Plan Sponsors.

Most companies have budgets for their business operations . . . and then regularly compare budget-to-actual. In other words, they compare their actual expenses to the budgeted amounts to see if they are on track to accomplish their financial goals. That’s pretty standard, and there is nothing remarkable about it. But, why don’t plan sponsors and fiduciaries, for example, plan committees, use that same approach for their … Read More »

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Best Practices for Plan Sponsors #6

Posted on January 16, 2019, by Fred Reish in 401(k), best practices, DOL Activity, fiduciary, Plan Sponsors, prudent. Comments Off on Best Practices for Plan Sponsors #6

Best Practices: Why Wait Until After You are Sued?

I am writing two series of articles that together are called “The Bests.” One is about Best Practices for plan sponsors, while the other is about the Best Interest Standard of Care for advisors. Each series is numbered separately to make it easier to identify the subject that is most relevant to you.

This is the sixth of the series about Best Practices for Plan Sponsors.

I am surprised that, after all of the fiduciary litigation against 401(k) plan sponsors, many plan sponsors and their committees have not taken the basic steps to minimize the risk of being sued, or if sued, of being liable. In most of the settled cases, the plaintiffs’ class action attorneys require that certain conditions—or “best practices”—be adopted by the plan fiduciaries. And, in settlement after settlement, those … Read More »

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Best Interest Standard of Care for Advisors #7

Posted on January 10, 2019, by Fred Reish in 401(k), best interest, fiduciary, Plan Sponsors, prudent, Registered Investment Advisers. Comments Off on Best Interest Standard of Care for Advisors #7

What Does Best Interest Mean . . . In the Real World? (Part 4)

I am writing two series of articles that together are called “The Bests.” One is about Best Practices for plan sponsors, while the other is about the Best Interest Standard of Care for advisors. Each series is numbered separately to make it easier to identify the subject that is most relevant to you.

This is the seventh of the series about the Best Interest Standard of Care.

In my last three posts (Best Interest Standard of Care for Advisors #4 and #5 and #6), I discuss the Best Interest standard of care and its practical application. This article discusses a novel approach for compliance with the fiduciary standard for the selection of investments for 401(k) plans. All the more interesting, the approach was part of an opinion of the U.S. … Read More »

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Best Interest Standard of Care for Advisors #6

Posted on December 11, 2018, by Fred Reish in best interest, fiduciary, prudent, SEC. Comments Off on Best Interest Standard of Care for Advisors #6

What Does Best Interest Mean . . . In the Real World? (Part 3)

I am writing two series of articles that together are called “The Bests.” One is about Best Practices for plan sponsors, while the other is about the Best Interest Standard of Care for advisors. Each series is numbered separately to make it easier to identify the subject that is most relevant to you.

This is the sixth of the series about the Best Interest Standard of Care.

In my last two posts (Best Interest Standard of Care for Advisors #4 and #5), I discussed the definition of the Best Interest standard of care, with a particular focus on the duty to exercise care, skill, prudence and diligence in developing recommendations for investors. Those articles commented on the consistency in the Best Interest and fiduciary standards being developed by the SEC … Read More »

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Best Practices for Plan Sponsors #5

Posted on November 7, 2018, by Fred Reish in 401(k), 403(b), best practices, DOL Activity, fiduciary. Comments Off on Best Practices for Plan Sponsors #5

Fiduciary Training: The Need for Basics

I am writing two series of articles that together are called “The Bests.” One is about Best Practices for plan sponsors, while the other is about the Best Interest Standard of Care for advisors. Each series is numbered separately to make it easier to identify the subject that is most relevant to you.

This is the fifth of the series about Best Practices for Plan Sponsors.

In three earlier posts—Best Practices for Plan Sponsors #2, #3, and #4—about the Sacerdote v. New York University decision, I discussed the good and the bad of the NYU plan committee and made several suggestions about best practices for improving committee performance. This article focuses on one of those suggestions—fiduciary education for committee members.

As a starting point, there is not a legal requirement that committee members receive fiduciary training. Instead, it’s … Read More »

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Best Practices for Plan Sponsors #4

Posted on October 17, 2018, by Fred Reish in best practices, fiduciary, Plan Sponsors, prudent, Service Providers. Comments Off on Best Practices for Plan Sponsors #4

What is the Baseline for A Committee to Act in the Best Interest of its Participants? (Part 3)

I am writing two series of articles that together are called “The Bests.” One is about Best Practices for plan sponsors, while the other is about the Best Interest Standard of Care for advisors. Each series is numbered separately to make it easier to identify the subject that is most relevant to you.

This is the fourth of the series about Best Practices for Plan Sponsors.

 In my last two posts (Best Practices for Plan Sponsors #2 and Best Practices for Plan Sponsors #3), I discuss the NYU case and the “bad” and “good” behavior of committee members. I concluded my last post with the point that process matters. Of course, it was unspoken that I was referring to a good process. This article discusses … Read More »

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Best Practices for Plan Sponsors #2

Posted on October 3, 2018, by Fred Reish in 401(k), 403(b), best practices, fiduciary. Comments Off on Best Practices for Plan Sponsors #2

What is the Baseline for A Committee to Act in the Best Interest of Its Participants? (Part 1)

I am writing two series of articles that together are called “The Bests.” One is about Best Practices for plan sponsors, while the other is about the Best Interest Standard of Care for advisors. Each series is numbered separately to make it easier to identify the subject that is most relevant to you.

This is the second of the series about Best Practices for Plan Sponsors.

The recent decision in the case of Sacerdote v. New York University is a classic story of the good and bad of plan committees. Let’s start with the bad.

Five current and former committee members testified at the trial. But not all of the testimony was helpful.

In the opinion, the Court said that the testimony of one of the co-chairs “was … Read More »

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Interesting Angles on the DOL’s Fiduciary Rule #97

Posted on July 10, 2018, by Fred Reish in DOL Activity, fiduciary, prudent, Registered Investment Advisers, RIA, SEC, Uncategorized. Comments Off on Interesting Angles on the DOL’s Fiduciary Rule #97

Regulation Best Interest Recommendations by Broker-Dealers: Part 3

This is my 97th article about interesting observations concerning the Department of Labor’s (DOL) fiduciary rule and the SEC’s “best interest” proposals.

In my last two articles—Part 1 and Part 2 on this topic, I discussed the fact that proposed Reg BI and its best interest standard of care for broker-dealers did not apply to all of the recommendations made by broker-dealers. The proposed best interest standard for broker-dealers will apply only to securities transactions recommended to “retail customers.” (Reg BI defines a “retail customer” as “a person, or the legal representative of such person, who . . . uses the recommendation primarily for personal, family, or household purposes.”) I compared that to the SEC’s Interpretation for RIAs, which applies to all advice to all clients. This article gives examples of how the proposals … Read More »

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Interesting Angles on the DOL’s Fiduciary Rule #96

Posted on June 25, 2018, by Fred Reish in BICE, Broker-Dealers, DOL Activity, fiduciary, Registered Investment Advisers, SEC. Comments Off on Interesting Angles on the DOL’s Fiduciary Rule #96

Regulation Best Interest Recommendations by Broker-Dealers: Part 2

This is my 96th article about interesting observations concerning the Department of Labor’s (DOL) fiduciary rule and the SEC’s “best interest” proposals.

In my last post, I compared the proposed best interest standard of care for broker-dealers—the SEC’s Regulation Best Interest (“Reg BI”), and the SEC’s proposed Interpretation Regarding Standard of Conduct for Investment Advisers (“RIA Interpretation”). In that article, I focused on the types of recommendations that implicated the best interest standard of care. For broker-dealers, the best interest standard only applied to recommendations of securities transactions and securities strategies. However, for RIAs the best interest standard applies to all advice and recommendations.

This article focuses on the advice recipients, that is, which investors will be protected by the best interest standard of care if the advice is given by a broker-dealer or, alternatively, … Read More »

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