My RIA Lawyer’s Post

What are the Major Differences Between DOL’s Proposed and Final ERISA Investment Advice Regulations? The team at Hall Benefits Law, LLC suggests the U.S. Department of Labor’s (DOL) final regulations broaden the definition of fiduciary under the Employee Retirement Income Security Act (ERISA) to include more investment advisors. They've done a terrific job of reducing the eight hundred pages of final regulations, which consist of a final rule and three sets of amendments to ERISA prohibited transaction exemptions. #fiduciary #fiduciaryduty #erisa #plansponsors

Excellent summary of ERISA litigation risk for plan advisors. Towards the end, Fred Reish comments that "Litigation against retirement plan advisors is probably here to stay. Indeed, it may pick up in the months ahead." At the risk of sounding like Chicken Little, in my estimation, in the years ahead, the new Lifetime Income Solutions that are developing have the potential of replacing fees and expenses as the fuel which propels future ERISA litigation. Proper execution of fiduciary decision making can seriously reduce the risks and expense of any potential litigation.

❗GREAT NEWS for plan sponsors and their service providers❗ Late Friday, the IRS announced an administrative transition period in IRS Notice 2023-62 for the new Roth catch up requirement. Check out this quick video to learn important information including: ➡ Catch up contributions will continue (even though there was a technical error in the drafting of SECURE 2.0) ➡ The change for catch up contributions changing to Roth for individuals that earn more than $145,000 in the prior year will be delayed until 2026. Great relief for plans sponsors and their service providers to ensure a compliant transition. Be on the lookout for more guidance related to SECURE 2.0 from the IRS and other agencies. Endeavor Retirement! Sean Cooper, J.D., AIF® Adrian Ramirez, CIMA® Chris Simmers Steven Rowe Endeavor Law

An article written by Jacklyn Wille in Bloomberg Law focusing on 401(k) fund benchmarks notes that judges have reviewed “…more than 250 proposed class actions filed by retirement plan participants since 2020…”, and that “…differences have emerged in how carefully they scrutinize the comparisons made between a specific plan’s fees and investments and the alternatives held up as better options.” Referencing recent lawsuits and the need for a uniform, national pleading standard, our Daniel Aronowitz, President of Encore Fiduciary, is quoted as saying, “There needs to be one national pleading standard and then plan sponsors can know what they’re doing.“ Daniel goes on to discuss that the current pleading standard is a “crapshoot” that fails to properly weed out the many illegitimate cases that are filed.    👉 You can read the full article here: https://lnkd.in/g_AYqCSe   #EncoreFiduciary #excessfeelitigation

https://lnkd.in/e2cAD3_e Kudos to Investment News. This story captures the desperation of industry fiduciary opponents. Such opponents brand the rationale for fiduciary advice and putting the interest of retirement savers first as an 'ideological campaign to ban commissions'. This branding is nonsense, of course, and only seeks to stop the DOL fiduciary rule so the industry anti-fiduciary sales practices can continue unabated. We discuss their own implicit anti-fiduciary campaign in our DOL comment letter here. https://lnkd.in/eRu2EUP2

This installment of our quarterly Fiduciary Update recaps recent litigation, legislation, and regulatory changes related to retirement plan sponsors and their fiduciary responsibilities. #fiduciaryupdate #fiduciary #retirementplans

{Do you have foreign clients with Unites States subsidiaries?} If so, you should review the subsidiary benefit plans. For employer-sponsored retirement plans, there are specific rules that make it very difficult for a foreign entity/parent company to act as the trustee of a subsidiary company’s plan in the United States. In essence, a qualified trust under Section 401(a) must be created or organized in the United States and maintained as a domestic trust in the United States. Under the rules, there is a two-prong test that evaluates foreign v. domestic trust issues. If your clients have foreign parent entities with United States subsidiaries, you should assess related trustee issues to make sure the plan complies with applicable law. [email protected] #subsidiary #corporatelaw #trustee #401kplans #domestictrust #foreigntrust #employeebenefits #foreigncorporations

Returning to a post from April, is there a risk in promoting a certain set of investments to retirement plan participants and failing to provide "open architecture"? Simply: yes. And GE has just agreed to a historic $61 million settlement relative to its former business unit GE Asset Management, which offered investments for the massive GE 401k plan. Here's some key language from the petition: "Defendants have breached their fiduciary duties and engaged in prohibited transactions and unlawful self-dealing in violation of ERISA and to the detriment of Plaintiffs." The lessons here are not exclusive to Fortune 50 companies nor limited to asset managers providing their own investments to employees. If you're involved in retirement plan oversight, you should be able to quickly answer two questions: 1) does our Plan offer participants a wide array of investments from diverse asset managers; and 2) who is ultimately obligated to select, monitor, and replace our Plan's investments? Despite more than 15 years of class action litigation, many retirement plans are still not managed to the appropriate standard. And while this settlement will generate headlines and reward the lawyers, many 401k savers will see no effect. #401kLitigation #OpenArchitecture #Fiduciary #FiduciaryFriday #FF041423 #FF101323