While the Fifth U.S. Circuit Court of Appeals has vacated the DOL fiduciary rule expansion, one attorney warns the rule is still technically in effect, at the very least until the court issues a “mandate” opening a limited period during which the Department of Labor can choose to contest the decision; he also questions whether the circuit courts are in fact split on the matter, as some are suggesting.
Some ERISA attorneys argue the Fifth Circuit decision last week to vacate entirely the DOL’s fiduciary rule expansion makes a Supreme Court decision on the matter inevitable; others are less sure that a decisive SCOTUS decision could be forthcoming, instead expecting the SEC to take the lead; still others admit they have little idea how the regulatory picture will shake out, recommending patience and ongoing compliance.
The latest decision out of the Fifth U.S. Circuit Court of Appeals throws a dramatic new element of confusion into the epic regulatory saga that has been the rollout of the Department of Labor fiduciary rule.
The bank also agreed to continue funding matching contributions to its 401(k) plan in the form of cash or cash equivalents for a period of time.
The appellee, Market Synergy Group, argued unsuccessfully that its representatives would never be able to make the Best Interest Contract Exemption, a key mechanism underlying the new DOL fiduciary rule, workable.
The firm says it does not have additional information to share at this juncture beyond what has been noted in a 2017 year-end SEC filing; in that newly emerged document, Wells Fargo Advisors says it has begun an internal investigation into “whether there have been inappropriate referrals or recommendations” made by its advisors, including with respect to rollovers for 401(k) plan participants.
While the investing rules controlling the Connecticut public pension fund are different from those governing corporate retirement plans, the argumentation as to why gun manufacturer divestment may be the right thing to do offers some food for thought for anyone charged with the fiduciary management of retirement plan assets.
The number of Employee Retirement Income Security Act lawsuits winning class certification in 2017 far outstripped the number of suits within which class action status was denied; attorneys with Seyfarth Shaw offer detailed analysis of all the ongoing cases.
Northrop was found not to be a fiduciary with respect to certain acts alleged against it; however, it did not escape the failure to monitor fiduciaries complaint.
The 7th U.S. Circuit Court of Appeals quoted a Supreme Court decision which said “the principle underlying the statutes—which have been adopted by nearly every State—is well established in the law and has a long historical pedigree predating ERISA.”
“While appropriate for some participants, heavy reliance on equities is almost certainly not suitable for as many 401(k) participants as the allocation of the largest TDF managers suggests,” P-Solve argues. “TDFs are built mainly for favorable economic and market environments.”
The sizable ERISA suit’s third amended compliant explicitly names as a defendant one of the advisory firms supporting NYU’s retirement plans.
The DOL has entered into a settlement agreement with U.S. Fiduciary Services and three of its subsidiaries that provides for payment of more than $7 million to 42 retirement plans.
Relying on standards set forth by the Supreme Court in Fifth Third Bank v. Dudenhoeffer, an appellate court affirmed a district court’s dismissal of the case.
Nearly $700 million was in recoveries from enforcement actions.
The complaint calls out the use of United of Omaha-branded mutual funds and target-date funds, as well as a guaranteed fund managed by United of Omaha.
In the case, the high court is asked whether an Employee Retirement Income Security Act (ERISA) claimant is barred from alleging a claim for breach of fiduciary duty under ERISA section 502(a)(3) whenever that claimant also has the opportunity to allege a claim for benefits under ERISA section 502(a)(1)(B).
Franklin Templeton's lawyers argued that while a Supreme Court ruling allowed the plaintiff to pursue an individual claim, he signed a waiver to not pursue class action lawsuits upon his severance of employment.