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Fiduciary Rules and Practices

A case that hinged on the determination of fiduciary status based on control of plan assets—has been decided—again—in favor of the defendants.  The original suit (Rozo v. Principal Life Ins. Co., S.D. Iowa, No. 4:14-cv-00463-JAJ-CFB, 5/12/17), was brought by plaintiff Frederick Rozo[1] on behalf... READ MORE
A federal appellate court took another look at an excessive fee case it had dismissed—and found nothing in a recent Supreme Court decision to change its mind. It was, in fact, the same appellate court (the Seventh Circuit) that had its judgement in the Hughes v. Northwestern University decision in... READ MORE
A lawsuit challenging the Labor Department’s subsequent guidance/application of the so-called fiduciary rule has some support from the American Council of Life Insurers (ACLI). As noted in the filing, the ACLI was one of the lead plaintiffs in the Fifth Circuit decision that vacated the 2016... READ MORE
A federal judge has affirmed a $1.5 million judgment against Schlichter Bogard & Denton LLP and Schneider Wallace Cottrell Konecky LLP for their role in bringing a “reckless” excessive fee suit. Back in September 2020, determining that the decision to pursue litigation was “objectively... READ MORE
Despite surveys to the contrary, a new study finds that overall interest in ESG strategies by participants is “relatively weak” and “driven by naïve diversification.” The difference may, of course, be attributed to the difference between what individuals say—and what they actually do. Unlike... READ MORE
Capozzi Adler and Miller Shah have wrested another settlement in an excessive fee suit—in record time. This time it’s the $1.2 billion Rush University Medical Center 403(b) plan—sued by four former workers just a few months ago (Jan. 21, 2022) who has agreed to settle for $2.95 million—as well as... READ MORE
Speaking July 26 at the 2022 NAPA D.C. Fly-In Forum, the Acting Assistant Secretary for the DOL’s Employee Benefits Security Administration outlined key priorities of the department, including finalizing the ESG rule, an update to the fiduciary rule, crypto and cybersecurity.  Ali Khawar, who has... READ MORE
A recent appellate court decision warrants a rethink of an excessive fee suit decision—at least that’s the argument being made by the plan fiduciaries. The suit in question was filed by a group of participant-plaintiffs in the $5.354 billion Humana Retirement Savings Plan (represented by the law... READ MORE
After nearly a year of negotiations (though that’s a pretty short turnaound by some measures), the parties in an excessive fee suit have asked for the court’s approval on a settlement agreement struck by the parties. The plan in question—more specifically the plan fiduciaries—involved are those of... READ MORE
Noting that “precedent has overtaken some of the debates in the case,” a federal appellate court has weighed in on an excessive fee case—affirming the rejection of most, but not all, of the plaintiffs’ claims.   The Case The defendants in this case are the fiduciaries of Cincinnati-based... READ MORE
Continuing their two-decade decline, the average expense ratio paid by fund investors fell again last year, Morningstar’s annual U.S. Fund Fee Study reports.    The study, which evaluates trends in the cost of U.S. open-end mutual funds and exchange-traded funds (ETFs), found that the asset-... READ MORE
A federal appellate court has backed the dismissal of an excessive fee suit, rejecting the notion that offering actively managed funds—even those with disappointing performance—by itself doesn’t support allegations of a fiduciary breach. Interestingly enough, it’s the first such appellate court... READ MORE
The fiduciaries of yet another university 403(b) plan have been targeted with litigation—and while the allegations are familiar, the plaintiff’s attorney is new. The suit—filed against both the fiduciaries (and those that appointed them) of the $1.9 billion Northeastern[1] University 403(b) plan... READ MORE
Broker-dealers and advisors doing business in the Silver State will want to pay attention to newly proposed regulations defining the state’s fiduciary standard, as well as broader changes to practices and procedures.   Efforts by Nevada regulators to implement guidance defining the state’s... READ MORE
The Labor Department is pushing back against litigation challenging specific elements of its FAQs regarding the fiduciary rule. The suit (Am. Sec. Ass’n v. U.S. Dep’t of Labor, M.D. Fla., No. 8:22-cv-00330, complaint filed 2/9/22) was one of two filed earlier this year challenging the DOL’s... READ MORE
There’s a battle brewing in Battle Creek about excessive recordkeeping and managed account fees. Bradley H. Fleming, a former accountant at Kellogg’s, has sued his former employer, the Kellogg Co., its board of directors, its ERIA finance committee and its ERISA administrative committee claiming... READ MORE
A federal judge has ruled that the comparisons put forth as proof of a fiduciary breach were not “meaningful.”  The suit was filed late last year by plaintiff-participants Malika Riley and Takeeya S. Reliford, by and through their attorneys—Carey & Danis, Edelson Lechtzin LLP, and, Capozzi... READ MORE
Retirement plans have garnered heightened scrutiny. In MarketBeat, John Iekel writes about a recent blog entry that argues that increased attention highlights the importance of fulfilling fiduciary duties and not committing a fiduciary breach. READ MORE
A multibillion-dollar 403(b) plan has been sued for the second time in a year. Now, MITRE had been sued in 2021—in a case just dismissed a few weeks back—because the named plaintiff, one Aaron Brown, was found to have invested his plan account in a single fund that belonged to the lowest-cost... READ MORE
Based on updates to the Department of Labor’s Spring 2022 regulatory agenda, it appears that stakeholders will have to wait a little longer for the agency’s revisions to the definition of fiduciary, as well as final guidance on ESG-based factors.  Fiduciary Rewrite? The latest regulatory agenda... READ MORE

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