Nevin & Fred: Recent Episodes
Nevin Adams
Irreverent, but relevant. Nevin Adams and Fred Reish offer listeners their perspectives on all things retirement.
In this episode, Nevin & Fred discuss new lawsuits regarding fiduciary breaches on the use of planforfeitures, a managed account default – and the Labor Department’s new fiduciary rule.
In late May a motion to dismiss the suit in one of the half-dozen (and counting) suits challenging the use of planforfeitures to reduce employer contributions was itself dismissed, with a federal judge deciding that the plaintiffs had made a plausible case to proceed.
Also in late May, participant-plaintiff Debra Hanigan claimed that the plan fiduciaries of the $5.1 billion Bechtel Trust and Thrift Plan “breached their fiduciary duty ofprudence to Plaintiff and other Plan participants, causing tens of millions of dollars of harm to Plaintiff and Class Member’s retirement accounts” – by defaulting participant investments into a managed account option that she claimed was nothing more than an expensive target-date fund.
And then in late April, the Labor Department’s new Retirement Security Rule (generally referred to as thefiduciary rule) got its first challenge in Federal Court. Claiming that the rule was “contrary to law and arbitrary and capricious,” the suit seeks “preliminary and permanent injunctive relief to prevent the DOL from attempting to enforce these unlawful rules and regulations.”
Whew!
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, theprolific 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.
As well as:The importance of fiduciary training; The meaning of “meaningful benchmarks.
Not to mention some predilections and predictions about the pending popularity and proclivities of pooled employer (PEPs).
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-intuitiveargument, supposing that if we had started with a PEP architecture—one in whichmost 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 Associationof 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 – andfederal court rulings – provide some timely reminders about the importance of aprudent process and following the plan document.
In this podcast episode,Nevin (Adams) & Fred (Reish) discuss the background, issues, andimplications behind:
(1) Suits regardingreallocation of forfeitures - offsetting employer contributions:
401(k)Forfeiture Fiduciary Breach Suit Now Targets Tetra Tech | National Associationof Plan Advisors (napa-net.org)
(2) The importance of following the plan document:
DOL Successfully Sues Employer for Misuseof Forfeitures | National Association of Plan Advisors (napa-net.org)
(3) Fiduciary defendants prevail in two separate (and verydifferent) cases because they had prudent, documented processes in place>
Prudent ProcessPrevails (Again) in Proprietary Fund Suit | National Association of PlanAdvisors (napa-net.org)
Breaking News: flexPATHPrevails in Suit Brought by Schlichter | National Association of Plan Advisors(napa-net.org)
(4) Participant suitchallenging ESG “bias” of investment manager proxy voting clears motion todismiss
American AirlinesPilot’s 401(k) ESG Suit Clears Motion to Dismiss | National Association of PlanAdvisors (napa-net.org)
UPDATE: American Airlines Moves(Quickly) for Summary Judgment in ESG 401(k) Suit | National Association ofPlan 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 thathad 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 whatthey should include to be more than “just an expensive target-date fund.”
Late last year a Pasadena, California, law firm launched aseries of suits alleging that the use of forfeitures to offset employer contributions was a fiduciary breach. Nevin (Adams) and Fred (Reish) look at the issue(s) this raises.
“If this is the law, then that would be news to Congressand the regulatory agencies, which have declared for decades that forfeitures can be used in this manner,” says a recent motion to dismiss a lawsuit alleging a fiduciary breach in offsetting employer contributions with forfeitures.
The motion to dismiss speaks to charges made in a suitfiled against Intuit, less than two weeks after filing an identical action against the Thermo Fisher Scientific Inc. 401(k)Retirement Plan. This suit, filed in the Northern District of California, acknowledges that “the Plan provides that forfeited nonvested accounts may be used to pay Plan administrative expenses or reduce future Company matching contributions.” Its language mirrors almost exactly three other such suits filedin either the Northern or Southern districts in California, including Clorox, Qualcomm and HP, all of which operated with plan documents that permitted—but did not require—that offset.
On October 31, the Biden Administration rolled out its long-anticipated update to the fiduciary rule. While it’s got a new name (the Retirement Security Rule), it builds on and extends the Labor Department’s reach by both focusing on the needs and perceptions of the retirement investor and eliminating the “regular basis” aspect of the so-called five-part test that has long been an integral component of what was considered to define an ERISA fiduciary.
In the latest episode Nevin (Adams) and Fred (Reish) consider the historical framework of the ERISA fiduciary definition, how the proposed rule would alter that, and what obstacles lie between that proposal and its ultimate adoption.
EXCLUSIVE Interview on the DOL’s Retirement Security Rule with EBSA’s Tim Hauser https://www.napa-net.org/news-info/daily-news/exclusive-interview-dol%E2%80%99s-retirement-security-rule-ebsa%E2%80%99s-tim-hauser
Breaking: Biden Administration Previews Fiduciary Rule Rollout https://www.napa-net.org/news-info/daily-news/breaking-biden-administration-previews-fiduciary-rule-rollout
Fred Reish’s blog posts on different aspects of the DOL proposal: https://fredreish.com/category/fiduciary/
Links to the proposed guidance, as well as the proposed PTE amendments are below:
Proposed Retirement Security Rule
Proposed Amendment to PTE 2020–02
Proposed Amendment to PTE 84–24
Proposed Amendment to PTEs 75–1, 77–4, 80–83, 83–1, and 86–128
At the 2023 NAPA/NTSA ERISA 403(b) conference, Nevin & Fred took the podcast LIVE to focus on the differences in SECURE 2.0 for 403(b) and 401(k) plans—with a special guest. And then the focus turned to litigation. Since late 2016, nearly two dozen excessive fee lawsuits have been filed against major universities, raising many of the issues that had previously been raised regarding major 401(k) plans – but with some unique twists as well. That’s right, we closed out the 2023 NAPA/NTSA ERISA 403(b) conference with a live session joined by the inimitable Kelly Famiglietta and discussed:
Yale Prevails - and a first-ever jury trial - but at what cost? https://www.napa-net.org/news-info/daily-news/yale-prevails-403b-excessive-fee-suit
Northwestern University – and the implications for a “plausible” case https://www.napa-net.org/news-info/daily-news/northwestern-excessive-fee-defendants-win-some-lose-some
Fred’s favorite case (NYU v. Sacerote) – and why. https://www.napa-net.org/news-info/daily-news/expert-opinions
At the 2023 NAPA/NTSA ERISA 403(b) conference, Nevin & Fred took the podcast LIVE to focus on the differences in SECURE 2.0 for 403(b) and 401(k) plans – with a special guest.
Late one recent Friday afternoon, the Department of Labordropped off a package that would redefine fiduciary investment advice under the Employee Retirement Income Security Act (ERISA). In this episode Nevin (Adams) and Fred(Reish) explore the possibilities – the history and potential future – of this initiative.
Known officially as “Conflict of Interest in InvestmentAdvice,” according to a post on the Office of Management and Budget’s website, “this rulemaking would amend the regulatory definition of the term fiduciary...to more appropriately define when persons who render investment advice for a fee to employee benefit plans and IRAs are fiduciaries within the meaning of section 3(21) of ERISA and section 4975(e)(3) of the Internal Revenue Code."
As part of that, it purports to consider advisor practices,plan sponsor and participant expectations, and IRA owners who receive investment advice. It would also consider “developments in the investment marketplace,” including compensation structures that could expose advisors toconflicts of interest – and evaluate available prohibited transaction class exemptions and propose amendments or new exemptions.
Attempts to update the regulation – given foundation by theEmployee Retirement Income Security Act of 1974 (a.k.a. ERISA) and structure by regulations issued in 1975 (from which the 5-part test came) – are not new. No fewer than four attempts to do so have been made in the past decade across three Administrations.
In this episode, Nevin & Fred look at those developments – both where we’ve been (and why), what’s changed (and hasn’t), and what the future for this latest iteration and its potential import might be.
Episode Resources:
Breaking News: New Fiduciary Rule Sent to OMB by Departmentof Labor https://www.napa-net.org/news-info/daily-news/breaking-news-new-fiduciary-rule-sent-omb-department-labor
Court Rolls Back Rollover Rule in 401(k) Fiduciary FAQ Fight https://www.napa-net.org/news-info/daily-news/court-rolls-back-rollover-rule-401k-fiduciary-faq-fightRollovers, Regular Basis Focus of DOL Guidance https://www.napa-net.org/news-info/daily-news/rollovers-regular-basis-focus-dol-guidanceDOL Confirms Investment Advice PTE https://www.napa-net.org/news-info/daily-news/dol-confirms-investment-advice-pteDOL Unwraps New Fiduciary Standard as a PTE https://www.napa-net.org/news-info/daily-news/dol-unwraps-new-fiduciary-standard-pte
Summer may be winding down, but there’s been a LOT going on in the retirement world. In this episode, Nevin (Adams) and Fred (Reish) run down the hot topics, and the implications behind these trends.
We’re talking about:
Breathing room from the IRS on mandatory Roth for higher income catch-up contributions https://www.napa-net.org/news-info/daily-news/breaking-news-irs-grants-two-year-delay-roth-catch-requirements A favorable court ruling for the Labor Department on its compliance assistance release regarding cryptocurrency investments in defined contribution plans. https://www.napa-net.org/news-info/daily-news/401k-crypto-case-crumbles-federal-court American Airlines pilot suit says he was invested in funds influenced by ESG bias. https://www.napa-net.org/news-info/daily-news/breaking-news-irs-grants-two-year-delay-roth-catch-requirements
Labor Department drops off new fiduciary rule at OMB for evaluation. https://www.napa-net.org/news-info/daily-news/breaking-news-new-fiduciary-rule-sent-omb-department-labor
Amidst a highly politicized environment, retirement planlitigation focused on the inclusion of ESG (environmental, social & governance) factors – or the lack thereof. Nevin (Adams) and Fred (Reish) examine the issue(s) and implications.
While the Biden Administration’s final rule on ESGinvestments (more properly “prudence and loyalty in selecting plan investments”) seems to have landed pretty much where the Trump Administration’s final rule on ESG investments did (save for the reliance on the term “pecuniary”), the issue remains polarizing (almost as though people hadn’t actually read the final regulation), triggering a number of suits involving retirement plans – most recently one brought by an American Airlines pilot-participant regarding investment options in that plan’s 401(k). However, American Airlines has moved to dismiss that suit – on interesting grounds. Come check it out!
There’s an old practice getting some new attention these days – “reenrollment." In this episode, Nevin and Fred take a look at the trend and its implications.
Let’s face it, just because circumstances weren’t right for joining the plan a year ago doesn’t mean they should be overlooked forever. Said another way, if at first you don’t “succeed” in enrolling them in the plan, this presents another opportunity to do so. The increase in participation rates proves the success.
It’s been a hot summer here – and there’s been so much going on lately that our brief recap wound up being a podcast episode unto itself. In this episode Nevin (Adams) and Fred (Reish) discuss:
- The jury trial outcome of the Yale University 403(b) excessive fee suit
- New litigation – and legislation – regarding fiduciary issues with regard to healthcare
- Latest updates on the BlackRock LifePath TDF suits where fiduciaries were accused of "chasing" low fees.
According to Cerulli’s “U.S. Managed Accounts 2022: The Future of Personalized Portfolios,” assets in managed-accounts programs grew nearly 24% in 2021, reaching a high of $10.7 trillion. In this episode Nevin (Adams) & Fred (Reish) take a look at the trends, the issues, and the considerations underlying managed accounts. Certainly these structures have proliferated in recent years, doubtless driven in no small part by the development/adoption of these solutions by advisory firms, though many advisors continue to see these as little more than “expensive target-date funds.”
There’s little argument that retirement income solutions are a need – but no real consensus that providing it is, or should be, a plan sponsor’s responsibility. Nevin & Fred discuss what's (still) standing in the way...
On April 3, the Nevin & Fred podcast went on the road to San Diego for a live appearance in front of a standing room only crowd at the NAPA 401(k) Summit.
On April 3, the Nevin & Fred podcast went on the road to San Diego for a live appearance in front of a standing room only crowd at the NAPA 401(k) Summit.
On April 3, the Nevin & Fred podcast went on the road to San Diego for a live appearance in front of a standing room only crowd at the NAPA 401(k) Summit.
There are few things more disruptive to the peace or clarity of a 401(k) plan than a switch in recordkeepers. But—whether for good or ill—a change in recordkeepers is one of those “choices” that plan fiduciaries are expected under ERISA to evaluate as a prudent expert. In this episode, Nevin & Fred cover the key factors.
Over the past several months –following the United States Supreme Court’s decision in Hughes v. Northwestern University – a number of cases, notably the Oshkosh case—and those of CommonSpirit and TriHealth—have brought with them what appears to be a higher standard of “plausibility” in asserting claims that can get past the standard motion to dismiss.
In this episode Nevin & Fred take a look at the new litigation landscape for ERISA plans, as well as providing updates on a series of suits involving the BlackRock LifePath target-date funds, as well as a surprising decision regarding rollovers and the fiduciary rule – and a flurry of legislation regarding the Labor Department’s Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights” – a.k.a. the so-called ”ESG rule.”
Oshkosh Lays Down a New StandardGosh! Oshkosh Wins Dismissal of Excessive Fee Suit https://www.napa-net.org/news-info/daily-news/gosh-oshkosh-wins-dismissal-excessive-fee-suit
BlackRock TDFsAnother BlackRock TDF Suit Dismissed https://www.napa-net.org/news-info/daily-news/another-blackrock-tdf-suit-dismissed
Rollover Rule(s)Court Rolls Back Rollover Rule in 401(k) Fiduciary FAQ Fight https://www.napa-net.org/news-info/daily-news/court-rolls-back-rollover-rule-401k-fiduciary-faq-fight
ESGExcerpts from ARA CEO Brian Graff’s interview with EBSA’s Tim Hauser. https://www.napa-net.org/search/site/hauser
Participants Challenge ESG Rule in Different Venue https://www.napa-net.org/news-info/daily-news/participants-challenge-esg-rule-different-venue
The SECURE 2.0 Act of 2022 was signed into law in the waning days of 2022. But there are some things that need fixing – and some things you may have overlooked. Nevin (Adams) and Fred (Reish) highlight five key areas calling for attention.
The short list of things covered in this episode:
- Deleted legislative text that could undermine catch-up contributions
- A typo(?) that could impact required minimum distribution (RMD) timing.
- Required vesting on employee elected Roth treatment of employer contributions
- Mandatory automatic enrollment on new plans – but not till 2025 – and with (potentially) rolling effective dates after that
Episode Resources
The What’s and When’s of SECURE 2.0 https://www.napa-net.org/news-info/daily-news/what%E2%80%99s-and-when%E2%80%99s-secure-20
Key SECURE 2.0 Act Provisions and Effective Dates https://www.napa-net.org/news-info/key-secure-20-act-provisions-and-effective-dates
Major SECURE 2.0 Error Puts Catch-Ups in Jeopardy https://www.napa-net.org/news-info/daily-news/major-secure-20-error-puts-catch-ups-jeopardy-ara%E2%80%99s-graff
In the waning days of 2022, President Biden signed into law legislation that had moved through the House and the Senate on a strong bipartisan basis that greatly expands retirement savings opportunities for working Americans.
In this episode Nevin (Adams) & Fred (Reish) unpack some of the major provisions, and their implications for retirement.
Episode Resources
SECURE 2.0 Resource Page
As a top priority of the American Retirement Association, the SECURE 2.0 Act of 2022 was signed into law by President Biden on Dec. 29, 2022. The legislation, which was included in Division T of the Consolidated Appropriations Act, 2023 (H.R. 2617), builds on the foundation laid by the 2019 Setting Every Community Up for Retirement Enhancement (SECURE) Act to further improve upon the success of the private employer-based retirement system by making it easier for businesses to offer retirement plans and for individuals to save for retirement. https://www.napa-net.org/secure-20
The 10 Highest Impact Provisions of the SECURE 2.0 Act
There are 92 provisions in the new SECURE 2.0 Act—and by at least one assessment, they are “almost universally good, with ‘good’ being defined as ‘helpful to the cause of promoting retirement security.’” Group Plan Systems’ Pete Swisher and Cherisha Chapman rank the Top 10 Impact Provisions—and Top 5 new burdens. https://www.napa-net.org/news-info/daily-news/10-highest-impact-provisions-secure-20-act
It’s Official: SECURE 2.0 Enacted into Law
Capping off months of anticipation and hard work, the SECURE 2.0 Act of 2022 is now law, thanks to President Biden signing the legislation Dec. 29 after it was flown down to him while on vacation in St. Croix, U.S. Virgin Islands. https://www.napa-net.org/news-info/daily-news/it%E2%80%99s-official-secure-20-enacted-law
The U.S. Department of Labor has unveiled its much-anticipated final ESG rule that it says will allow “plan fiduciaries to consider climate change and other environmental, social and governance factors when they select retirement investments and exercise shareholder rights, such as proxy voting.” The operative word for plan fiduciaries is MAY, not must consider ESG factors—a concern that had arisen in the wake of the proposed regulation previously issued.
Episode Resources
Fiduciaries May, But Not Must Consider ESG: DOL: https://www.napa-net.org/news-info/daily-news/breaking-news-fiduciaries-may-not-must-consider-esg-dol
Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights
It’s Official: Final ESG Reg Published in the Federal Register: https://www.napa-net.org/news-info/daily-news/it%E2%80%99s-official-final-esg-reg-published-federal-register
A recent flurry of lawsuits has "targeted" holders of the BlackRock LifePath target-date funds and their decision(s) to select, and hold, on their investment menu. Ironically, the plan fiduciaries have been charged with "chasing low fees" with a disregard for the funds' performance - which the plaintiffs say was tracked against an inappropriate benchmark. In this episode, Nevin & Fred look at the issues raised by - and the issues involved in - this new round of ERISA litigation.
Episode Resources
Home Depot Hammers Back Excessive Fee Suit https://www.napa-net.org/news-info/daily-news/home-depot-hammers-back-excessive-fee-suit
ARA Joins Amicus Brief Rebuffing BlackRock TDF Suit https://www.napa-net.org/news-info/daily-news/ara-joins-amicus-brief-rebuffing-blackrock-tdf-suit
‘Damned’ (Even) If You Do https://www.napa-net.org/news-info/daily-news/damned-even-if-you-do
Shah Miller Targets (Yet) Another 401(k) with BlackRock TDF https://www.napa-net.org/news-info/daily-news/shah-miller-targets-yet-another-401k-blackrock-tdf
There’s an old saying that when you assume… well, that applies double (and then some) to ERISA plan fiduciaries. In this episode, Nevin (Adams) and Fred (Reish) discuss five – with reminders about how to avoid winding up in trouble.
Episode Resources
https://www.napa-net.org/news-info/daily-news/5-dangerous-fiduciary-assumptions
https://www.napa-net.org/news-info/daily-news/5-things-your-plan-committee-members-need-know
https://www.napa-net.org/news-info/daily-news/5-plan-committee-missteps
With the written best interest documentation requirement now in place (as of July 1), and with some evidence that some advisors might not have focused on that deadline (or a series of others that took effect in February), in this episode Nevin (Adams) & Fred (Reish) look at some new ways to “fix” non-compliance issues.
Episode Resources
Best Interest Standard of Care for Advisors #93: Correction of Failures to Satisfy PTE 2020-02 https://fredreish.com/best-interest-standard-of-care-for-advisors-93/
IRS Pilots Pre-examination Retirement Plan Compliance Program https://www.asppa-net.org/news/irs-pilots-pre-examination-retirement-plan-compliance-program
Morningstar Urges DOL to Revisit TDF Guidance https://www.napa-net.org/news-info/daily-news/morningstar-urges-dol-revisit-tdf-guidance
There’s a lot going on in Washington – big movements in the Senate and in the House – and bipartisan. So, what’s in those bills? Nevin (Adams) and Fred (Reish) take a look.
Episode Resources
The Path(s) of Least Resistance https://www.napa-net.org/news-info/daily-news/paths-least-resistance
Bipartisan Bill Backs Auto-Portability https://www.napa-net.org/news-info/daily-news/bipartisan-bill-backs-auto-portability
It’s Unanimous! EARN Passed by Senate Committee 28-0 https://www.napa-net.org/news-info/daily-news/its-unanimous-earn-passed-senate-committee-28-0
Senate HELP Committee Approves RISE & SHINE Act https://www.napa-net.org/news-info/daily-news/senate-help-committee-approves-rise-shine-act
House Advances SECURE 2.0 in Nearly Unanimous Vote https://www.napa-net.org/news-info/daily-news/house-advances-secure-20-nearly-unanimous-vote
The Labor Department’s expanded definition of fiduciary advice is described in the preamble to PTE 2020-02. The PTE then provides relief for conflicted non-discretionary recommendations (for example, rollover recommendations), IF its conditions are satisfied.
In this episode Nevin & Fred discuss the new parameters, how they’re applied, the conditions that might (and might not) be sufficient to warrant rolling money out of a qualified plan and into an IRA – and the “new” requirement that the justification as to why that move is in the interests of the plan participant – and be in writing, effective July 1.
Episode Resources
Best Interest Standard of Care for Advisors #92: Consideration of Costs in the Evaluation of Rollovers: https://fredreish.com/best-interest-standard-of-care-for-advisors-92/
Best Interest Standard of Care for Advisors #89: Rollovers and the Information That Is Needed About the Participant: https://fredreish.com/best-interest-standard-of-care-for-advisors-89/
Best Interest Standard of Care for Advisors #84: Compliance with PTE 2020-02: Special Issues: Monitoring: https://fredreish.com/best-interest-standard-of-care-for-advisors-84/
DOL Official Sheds Light on Rollover Recommendations: https://www.napa-net.org/news-info/daily-news/dol-official-sheds-light-rollover-recommendations
Rollovers, Regular Basis Focus of DOL Guidance: https://www.napa-net.org/news-info/daily-news/rollovers-regular-basis-focus-dol-guidance
DOL Delays Enforcement of Fiduciary Investment Advice Exemption: https://www.napa-net.org/news-info/daily-news/dol-delays-enforcement-fiduciary-investment-advice-exemption-0
When it comes to workplace retirement plans, there are three kinds of people: people who are ERISA fiduciaries and know it, people who aren’t ERISA fiduciaries and know it, and people who are ERISA fiduciaries and don’t know it.
If you’re in the first or last category — well, in this episode Nevin & Fred discuss seven things that every ERISA plan fiduciary should know.
Episode Resources
https://www.napa-net.org/news-info/daily-news/7-things-every-erisa-fiduciary-should-know
In Part 2 of their “live” podcast from the NAPA 401(k) Summit, Nevin & Fred discuss ESG (and “material risk and return factors”), tie-breakers, designated investment alternatives, “extreme caution” & cryptocurrency within self-directed brokerage accounts (and beyond) – and Fred’s favorite ERISA case…
Episode Resources
DOL Issues Big Caution on Crypto https://www.napa-net.org/news-info/daily-news/dol-issues-big-caution-crypto
A Thumb on the Scale(s)? https://www.napa-net.org/news-info/daily-news/thumb-scales
Cold Water Thrown on Need for New Brokerage Window Guidance https://www.napa-net.org/news-info/daily-news/%E2%80%8Bcold-water-thrown-need-new-brokerage-window-guidance
Fred’s favorite case: https://www.napa-net.org/news-info/daily-news/nyu-excessive-fee-suit-gets-failing-grade
Fred’s fiduciary training powerpoint slides about Fred’s favorite case: https://img1.wsimg.com/blobby/go/f197dd2b-b8f0-4392-acf5-dfc33e2bd3c2/Fred%20Fiduciary%20Training.pdf
Nevin’s column about Fred’s favorite case: Expert Opinions https://www.napa-net.org/news-info/daily-news/expert-opinions
Nevin & Fred take their podcasting on the road for a Live session at the 2022 NAPA 401(k) Summit!
Episode Resources
SCOTUS Gives Excessive Fee Suit Plaintiffs Another Shot: https://www.napa-net.org/news-info/daily-news/scotus-gives-excessive-fee-suit-plaintiffs-another-shot
Hughes v. Northwestern University et al., case number 19-1401, in the Supreme Court of the United States: https://www.napa-net.org/sites/napa-net.org/files/19-1401_m6io.pdf
SCOTUS Ponders Excessive Fee Case: https://www.napa-net.org/news-info/daily-news/scotus-ponders-excessive-fee-case
Nevin's Column that was cited by the DOL: https://plansponsorinstitute.blogspot.com/2009/02/winning-ways.html
Nevin's Column about being cited by the DOL (because, why not?): https://plansponsorinstitute.blogspot.com/2009/04/second-opinion.html
Fred's article in PLANSPONSOR (edited by Nevin) cited by the Schlichter Bogard & Denton-backed plaintiffs in the original Hughes case (page 23): https://www.napa-net.org/sites/napa-net.org/files/uploads/Divane-v.-Northwestern.pdf
A hot topic of conversation of late has been crypto currency – and just as it seemed to be making some inroads on some 401(k) platforms, the Labor Department jumped in with something called a Compliance Assistance Release that should certainly give pause to plan fiduciaries. That follows a bit of a clarification on a stance it issued on the appropriateness of private equity in defined contribution plans in 2020 which, in turn follows a new proposal on ESG, and some commentary on self-directed brokerage accounts (SDBAs).
All that means that there is the potential for a bit of “flux” with regard to some non-traditional DC plan investments. In this episode Nevin & Fred bat around the issues, the alternatives, and the potential consequences for plan fiduciaries!
DOL Issues Big Caution on Crypto https://www.napa-net.org/news-info/daily-news/dol-issues-big-caution-crypto
DOL Gives Green Light to Private Equity in TDFs https://www.napa-net.org/news-info/daily-news/dol-gives-green-light-private-equity-tdfs
DOL Clarifies Guidance on Private Equity in 401(k) Plans https://www.napa-net.org/news-info/daily-news/dol-clarifies-guidance-private-equity-401k-plans
Is There a Case for Alts in DC Plans? https://www.napa-net.org/news-info/daily-news/there-case-alts-dc-plans
In their first episode of 2022, Nevin & Fred look at a new Supreme Court ruling likely to make it harder—perhaps much harder—to dismiss excessive fee lawsuits, the U.S. Supreme Court has remanded for further consideration a lower court decision that the law firm of Schlichter Bogard & Denton had argued had a “chilling effect” on excessive fee litigation.
What happens next? Check it out...
Episode Resources
SCOTUS Gives Excessive Fee Suit Plaintiffs Another Shot: https://www.napa-net.org/news-info/daily-news/scotus-gives-excessive-fee-suit-plaintiffs-another-shot
Hughes v. Northwestern University et al., case number 19-1401, in the Supreme Court of the United States: https://www.napa-net.org/sites/napa-net.org/files/19-1401_m6io.pdf
SCOTUS Ponders Excessive Fee Case: https://www.napa-net.org/news-info/daily-news/scotus-ponders-excessive-fee-case
Summary of oral arguments: https://www.napa-net.org/sites/napa-net.org/files/scotus%20arguments%20summary.pdf
Transcript of oral arguments: https://www.napa-net.org/sites/napa-net.org/files/SCOTUS%20arguments.pdf
In this episode, the dynamic duo of Nevin & Fred take a look (ahead) at the prospects for the fiduciary rule (3.0), ESG, PEPs, Retirement Income (and income projections), industry consolidation & legislative outlook for 2022.
Episode Resources
Fred’s Fiduciary Rule blog: https://fredreish.com/
DOL Delays Enforcement of Fiduciary Investment Advice Exemption: https://www.napa-net.org/news-info/daily-news/dol-delays-enforcement-fiduciary-investment-advice-exemption-0
DOL Proposal Would Reverse Trump ESG, Proxy Voting Rules: https://www.napa-net.org/news-info/daily-news/dol-proposal-would-reverse-trump-esg-proxy-voting-rules
Resource Page on MEPs, PEPs, ad PPPs: https://www.napa-net.org/news-info/daily-news/resource-page-meps-peps-and-ppps-launches
Are We Ready for Retirement Income?: https://www.napa-net.org/news-info/daily-news/are-we-ready-retirement-income
Environmental, social and governance (ESG)-focused investing is of increasing interest to investors, plan sponsors and…regulators. In this episode, Nevin & Fred focus on where things stand, what’s changed (and what hasn’t), and what plan fiduciaries/plan advisors should consider doing…now.
Episode Resources
Three ‘Scary’ Things That Give Plan Sponsors Chills: https://www.napa-net.org/news-info/daily-news/three-scary-things-give-plan-sponsors-chills
DOL Proposal Would Reverse Trump ESG, Proxy Voting Rules: https://www.napa-net.org/news-info/daily-news/dol-proposal-would-reverse-trump-esg-proxy-voting-rules
The DOL Proposal: Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights
ESG Investing Resource Page: https://www.napa-net.org/industry-intel/esg-investing
Being a plan fiduciary is a tough job—and one that, it’s probably fair to say—is underappreciated, if not undercompensated.
This week Nevin and Fred focus on five key missteps that plan committees make - and the best practices that can help keep you out of trouble.
Episode Resources
5 Plan Committee Missteps
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Your plan might be an excessive fee litigation target if...join Nevin Adams and Fred Reish for the latest installment of Nevin & Fred.
Nevin & Fred discuss the recent Aon survey on "what drives fiduciary liability", and give you their perspectives on the key takeaways.
Episode ResourcesAon: What Drives Fiduciary Liability: https://insights-north-america.aon.com/investment/aon-what-drives-fiduciary-liability-whitepaper
Your Plan Might be an Excessive Fee Litigation Target if...: https://www.napa-net.org/news-info/daily-news/your-plan-might-be-excessive-fee-litigation-target-if%E2%80%A6
Limiting Fiduciary Liability (Costs): https://www.napa-net.org/news-info/daily-news/limiting-fiduciary-liability-costs
Cybersecurity is a hot topic these days, with a new ransomware attack or data breach in the news nearly everyday. In this episode, Nevin & Fred talk about DOL's recommended best practices and the best ways to protect your retirement savings from cyber hacks.
Episode Resources:
DOL Investigation Questions: https://nevinandfred.com/
DOL Unveils Cybersecurity Guidance for Recordkeepers, Fiduciaries: https://www.napa-net.org/news-info/daily-news/dol-unveils-cybersecurity-guidance-recordkeepers-fiduciaries
DOL Reportedly Begins Cybersecurity Plan Audits: https://www.napa-net.org/news-info/daily-news/dol-reportedly-begins-cybersecurity-plan-audits
EBSA Online Security Tips: https://www.dol.gov/sites/dolgov/files/ebsa/key-topics/retirement-benefits/cybersecurity/online-security-tips.pdf
EBSA Cybersecurity Program Best Practices: https://www.dol.gov/sites/dolgov/files/ebsa/key-topics/retirement-benefits/cybersecurity/best-practices.pdf
It's been said that a committee is a group that keeps minutes and loses hours, but they are an essential element in assuring prudent retirement plan operation and administration. In this episode we cover the who, what, how and how much of retirement plan committees - with some best practices and some things to avoid thrown in for good measure.
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Episode Resources:
Retirement Plan Committees (PSCA Survey): https://www.psca.org/research/snapshot-surveys/2021/committees
NYU Excessive Fee Suit Gets Failing Grade https://www.napa-net.org/news-info/daily-news/nyu-excessive-fee-suit-gets-failing-grade
Expert Opinion: https://www.napa-net.org/news-info/daily-news/expert-opinions
Building on a wide-ranging series of retirement plan design enhancements introduced by the Setting Every Community Up For Retirement Enhancement (SECURE) Act of 2019 (hence, SECURE 2.0), Chairman of the House Ways & Means Committee Richie Neal (D-Ma) and Ranking Member Kevin Brady (R-TX) have now introduced a sequel of sorts. Dubbed "SECURE 2.0", the Securing a Strong Retirement Act of 2021 has been introduced and passed the U.S. House Ways & Means Committee, and is now headed for consideration by the full U.S. House of Representatives. Nevin Adams and Fred Reish take a look at five key provisions, their implications for retirement - and for the retirement security of millions of working Americans.
Other Resources: https://www.napa-net.org/news-info/daily-news/what%E2%80%99s-new-secure-act-20
Join Nevin Adams & Fred Reish for the inaugural episode of "Nevin & Fred: Fresh & Best Perspectives."
Technically, it’s not a “rule”—but after years of debate, hearings, comments, litigation and preparation, there are some new rules regarding investment advice—and some help for retirement plan advisors. Nevin Adams and Fred Reish take a look at the implications. And have some fun doing it.
Episode Resources:
DOL PTE 2020-02: https://www.govinfo.gov/content/pkg/FR-2020-12-18/pdf/2020-27825.pdf
The DOL’s Prohibited Transaction Exemption 2020-02 provide relief from prohibited compensation resulting from nondiscretionary fiduciary advice. And, in the preamble to the PTE, the DOL explains that it is reinterpreting the regulatory definition of fiduciary advice so that many more recommendations to plans, participants and IRA owners will be fiduciary advice.
FAQs for Fiduciary Advice Exemption: https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/new-fiduciary-advice-exemption.pdf
The DOL has issued guidance on understanding and interpreting its expansion of the definition of fiduciary advice and on the exemption from prohibited transactions resulting from nondiscretionary fiduciary advice.
DOL guidance to selecting an advisor: https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/choosing-the-right-person-to-give-you-investment-advice.pdf
The DOL has issued guidance to help IRA owners and plan participants select advisors to help with rollover decisions and IRA investing. This publication offers “Questions to Ask an Investment Advice Provider”.