Category: Uncategorized


The Duty of Prudence and the Net Cost of Investments

Posted on June 22, 2015, by Fred Reish in DOL Activity, fiduciary, Plan Sponsors, prudent, Uncategorized. Comments Off on The Duty of Prudence and the Net Cost of Investments

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Fiduciary Challenges for Evaluating Plan Fees: Investment Expenses and Revenue Sharing

Posted on June 2, 2015, by Fred Reish in fiduciary, Uncategorized. Comments Off on Fiduciary Challenges for Evaluating Plan Fees: Investment Expenses and Revenue Sharing

The allocation of revenue sharing in 401(k) plans is a fiduciary decision. We explored that issue in detail in a recent white paper. We also looked at the concept of lowest “net” expense ratios. We concluded that there were fiduciary risk management benefits to “equalizing” revenue sharing (that is, returning it to the participants whose investments generated it) and for using the lowest net expense ratio for investments (i.e., the lowest net expense ratio after offsetting revenue sharing). A copy of that white paper is here.


Did you know…?

Posted on January 8, 2015, by Fred Reish in DOL Activity, fiduciary, Uncategorized. Comments Off on Did you know…?

Little has been written about how a plan fiduciary should prudently select insurance companies and guaranteed retirement income for participants. There’s a DOL “safe harbor” regulation, but it doesn’t give fiduciaries a checklist for compliance. To address this, Lincoln Financial hired us to work with an insurance consultant to develop a set of criteria that fiduciaries or their advisors can use to make those decisions. Bruce Ashton and I have written an article about the checklist that can be found here:  Did you know…About the Fiduciary Requirements for Selecting a Lifetime Income Provider?  The article has links to the white paper and the checklist.


Selection and Monitoring of Target Date Funds

Posted on October 7, 2013, by Fred Reish in Plan Sponsors, Uncategorized. Comments Off on Selection and Monitoring of Target Date Funds

As I review investment policy statements for participant-directed plans, I see a number of common deficiencies. This email is about one of those—the selection and monitoring of target date funds (“TDFs”).

In my experience, most IPS’ say little or nothing about the criteria to be applied to TDFs. For example, an IPS might be completely silent on the issue or may simply say that they will be selected and monitored. But, in neither case is there a robust set of criteria. That is problematic.

One reason is that TDFs are capturing an increasingly large percentage of 401(k) assets. As more plans automatically enroll, that percentage will continue to grow. I can imagine a day, in the not-so-distant future, where over half of the assets in 401(k) plans will be in TDFs. That leads to the unfortunate conclusion that, based on the current … Read More »


Limiting the 401(k) Finder’s Fee

Posted on June 21, 2013, by Fred Reish in Uncategorized. Comments Off on Limiting the 401(k) Finder’s Fee

Fred Reish was quoted in a New York Times article on June 21. The article, titled, “Limiting the 401(k) Finder’s Fee” takes a look into the fees behind employee’s 401(k)’s as they begin to replace pensions.

A series of lawsuits are making their way through the courts, which have raised questions about whether employees are being overcharged for their accounts. The lawsuits and new federal rules have helped bring fees down to a more reasonable level. While some employers have begun to adopt arrangements with less fees that more clearly separates what they are paying for, fees that workers pay can still vary widely and be hard to recognize or understand.

“It’s unfortunate that it took litigation to focus attention on costs, but it has,” said Fred.

The link to the article can be found on the Drinker Biddle website, here.


GAO Report on IRA Rollovers

Posted on April 29, 2013, by Fred Reish in Uncategorized. Comments Off on GAO Report on IRA Rollovers

Periodically I will be posting information or materials from external resources, such as government agencies, that I think will be useful. This is the first of those posts. These materials will be linked on the blog to the “External Resources” page of the blog.

The GAO just issued a report on IRA rollovers. The title is: “401(k) PLANS: Labor and IRS Could Improve the Rollover Process for Participants.” You can find a copy of the 71-page report here.

While the GAO Report recommends a number of changes to improve the rollover process and experience for participants, it is remarkable for the comments that it makes about the IRA rollover services of some providers. For example, at one point, it states: “Plan participants are often subject to biased information and aggressive marketing of IRAs when seeking assistance and information regarding what to do … Read More »


Featured Member in The University of Arizona Newsletter

Posted on April 25, 2013, by Fred Reish in Uncategorized. Comments Off on Featured Member in The University of Arizona Newsletter

Fred Reish was profiled in the April 24, 2013 alumni newsletter of The University of Arizona James E. Rogers College of Law.  To see the full feature, click here.


Plans With Only Brokerage Accounts

Posted on January 23, 2013, by Fred Reish in 404a-5, DOL Activity, fiduciary, Uncategorized. Comments Off on Plans With Only Brokerage Accounts

On July 30, the DOL reissued its Field Assistant Bulletin (FAB) concerning participant disclosures. The FAB was reissued because of the controversy about the DOL’s position on individual brokerage accounts.

The new FAB deletes the old, and controversial, Q&A 30 and replaces it with a new Q&A 39.

While some of the controversial provisions were removed, some remain. For example, the DOL states:

“…in the case of a 401(k) or other individual account plan covered under the regulation, a plan fiduciary’s failure to designate investment alternatives, for example, to avoid investment disclosures under the regulation, raising questions under ERISA section 404(a)’s general statutory fiduciary duties of prudence and loyalty.”


New Disclosure Rules

Posted on December 19, 2011, by Fred Reish in 408(b)(2), Plan Sponsors, Service Providers, Uncategorized. Comments Off on New Disclosure Rules

All of the service provider disclosures must be made by April 1, 2012. Once the disclosures are made, the focus will shift from service providers to plan sponsors. That is, after plan sponsors receive the disclosed information, they must prudently review and analyze it. In other words, they must engage in a prudent process to evaluate the services and compensation. That will inevitably lead to a benchmarking of service provider compensation.

My partner, Bruce Ashton, and I have written a detailed Alert on that subject for our firm, Drinker Biddle & Reath, LLP. A copy of that Alert can be accessed through the Drinker Biddle & Reath LLP website, at:

http://www.drinkerbiddle.com/resources/publications/2011/service-provider-disclosures-the-impact-on-plan-sponsors?Section=Publications.

Please copy and paste the link into your browser to access the publication.




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