Compliance October 2, 2014

Supreme Court Will Hear Tibble v. Edison Case

The law firm of Schlichter, Bogard & Denton says the U.S. Supreme Court has agreed to review the closely followed 401(k) fee litigation case, Tibble v. Edison International.
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The law firm says Tibble will be the first case involving litigation on excessive 401(k) fees heard by the Supreme Court, following a recommendation from the U.S. Solicitor General’s Office urging the top court to agree to review previous district and appellate court findings in the controversial case.

The case has a complicated procedural background, but court documents show that, during the initial bench trial, a district court held that utility company Edison International had breached its duty of prudence by offering retail-class mutual funds as retirement plan investments when lower-cost institutional funds were available. But the court subsequently limited that holding to three mutual funds that had first been offered to plan participants within the six-year limitations period applied within the Employee Retirement Income Security Act (ERISA)—meaning mutual funds placed on the plan menu more than six years before the date of the ERISA-based complaint were excluded from the decision.

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Tibble and counsel appealed that decision to the 9th Circuit, but the appeals court upheld the district court’s decision to limit the settlement to the three mutual funds adopted within the ERISA limitations period. This led to the Solicitor General’s brief, in which the government’s chief appellate lawyer sided with Tibble on the argument that such claims should not be time-barred—mainly because of the plan fiduciaries’ ERISA-mandated duty to periodically review investment options.

The plaintiff’s attorney in the Tibble case, Jerome Schlichter, of Schlichter, Bogard & Denton, tells PLANADVISER that the Solicitor General’s brief also suggests a win on another pending petition for certiorari filed in one of the firm’s other cases, Tussey v. ABB Inc. The Solicitor General refers to Tussey v. ABB Inc. in the brief (page 22, in footnote 8), citing similarities between the cases related to disloyalty and imprudence claims.

Schlichter says his firm and the plaintiffs in Tibble v. Edison still contend that Edison International failed to act in the best interest of its employees by allowing excessive fees to be charged in their 401(k) plan.

“The U.S. Solicitor General supported our position that this case affects the security and integrity of the U.S. retirement system, and we hope the Supreme Court will as well,” Schlichter adds.

Deals & People October 2, 2014

Exec from The Hartford Named Voya Unit CFO

Michael A. Bell was named chief financial officer of Voya Investment Management, the asset management business of Voya Financial Inc.

 

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Bell will lead the finance team, including financial reporting, planning and analysis, for Voya Investment Management; he also will be a part of Voya Financial’s senior finance leadership team

Bell has more than 20 years of experience across public accounting and financial services. He most recently served, since 2012, as chief financial officer for Hartford Investment Management Company (HIMCO), part of The Hartford, where he led the financial organization that supports The Hartford’s general account and institutional client investments. Previously, Bell served as CFO for The Hartford’s institutional solutions group. He also was HIMCO’s chief accounting officer from 2005 to 2008 and before that, director of investment accounting policy, reporting and taxation. Prior to joining The Hartford in 2002, Bell spent 10 years with PricewaterhouseCoopers, LLP and previously was at Arthur Andersen & Co.

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Bell will report to Ewout L. Steenbergen, executive vice president and CFO of Voya Financial. He also will work closely with Jeffrey T. Becker, CEO of Voya Investment Management and become a member of Becker’s management committee.

Bell succeeds Daniel Wilcox, who will be retiring at the end of 2014 after more than 30 years with Voya and the firm’s legacy companies.

Bell holds a bachelor’s degree in accounting from the University of Rhode Island and a master’s degree in business administration from the University of Connecticut. He is a certified public accountant and holds the Chartered Financial Analyst (CFA) designation.

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