Cohen & Buckmann Insights

Latest from Cohen & Buckmann Insights

Can ERISA plan participants be denied their day in court? Title 1 of ERISA allows participants to sue fiduciaries who breach their fiduciary duties. The permissible venues, the statutes of limitations for claims and available remedies to apply in “civil actions” are set out. However, courts have increasingly held that plan sponsors may impose contractual restrictions of the exercise of those ERISA rights. The Supreme Court has held that plans may contractually shorten the period…
One of the novel claims in 401(k) and 403(b) plan litigation has been that vendors violate ERISA when they use participant data to cross sell other products and services to plan participants.  These can include products such as annuities, life insurance, brokerage accounts and wealth management services. A closely watched case was filed in Texas against Shell Oil Company and a number of Fidelity entities-all referred to as Fidelity here- alleging that Fidelity, the plan’s…
In the spring 2021 issue of 401k Specialist magazine, Carol Buckmann explains why outsourcing investment responsibilities to an investment manager or outsourced chief investment officer is trending. The interview stemmed from Carol’s popular blog posts on fiduciary responsibilities, where she has advised, “fiduciaries who take a ‘do-it-yourself’ approach face huge potential exposure from underperforming investments and excessive plan fees.” In this article Carol is quoted about why some plan sponsors still refuse outside help and…
Surveys show that the overwhelming majority of 401(k) plans offer target date funds as part of their investment lineup. Usually, target date funds are the plan’s designated qualified default investment alternative, or QDIA, which means that large numbers of participants who don’t make their own investment decisions are invested in these funds.  Yet despite their popularity, target date funds in different fund families vary greatly in management styles, fees and the proportion of equity, fixed…
One of the most important responsibilities of plan fiduciaries is hiring the right service providers. These providers must do competent-hopefully, superior- work for a fee that is reasonable in relation to the services provided. The best way to fulfill this responsibility is by doing an RFP (Request for Proposals). Engaging in RFPs can help fiduciaries demonstrate that they haven’t hired inappropriate or overly expensive plan providers if their choices are challenged. In contrast to considering…
ERISA fee litigation seems out of control. In fact, the number of lawsuits filed in 2020 was double the number filed in 2018. While some of the fiduciaries who were sued didn’t take their fiduciary responsibilities seriously, many others who tried to do a good job were caught in the sights of aggressive class action attorneys. There have been fewer decisions on the merits than you might expect in these cases, relative to the number…
This is the time of year when we see lots of articles on hot plan trends for 2021 and what benefits innovations plan sponsors are adopting. This is all well and good, but the beginning of the new year is also a good time for fiduciaries to review basic plan policies and operations to see how they can be improved. The better these are, the greater the chances your plan will survive an audit with…
The SECURE Act put in place important steps to close the retirement savings gap. These included many provisions encouraging plan adoption and retirement income accumulation. Building on the framework of the SECURE Act, Representatives Richard Neal and Kevin Brady have introduced the Securing a Strong Retirement Act of 2020, already being referred to as SECURE Act 2.0. SECURE Act 2.0 contains changes that would further encourage plan adoption and retirement savings, as well as solutions…