Posts Categorized: Fiduciary Issues

DOL Finalizes New Rule to Address Conflicts of Interest in Retirement Advice

in Fiduciary Issues, Retirement Plans

On April 6, 2016, the Department of Labor released the final version of the new fiduciary rule. The new rule followed a long and extended comment period for the 2015 proposed rule, with much lobbying on both sides. The final rule is substantially revised from the proposed rule which was issued in 2015. The Department also released a chart which highlights changes from the proposed rule to the final rule.

Harris v. Amgen

in Court Cases, Fiduciary Issues, Qualified Plans

On January 25, 2016, the United States Supreme Court issued an opinion in Harris v. Amgen that will impact the pleading standard for stock drop litigation. The plaintiffs in Harris are former employees of Amgen Inc. who participated in their employer’s qualified ESOPs. When the value of Amgen stock fell significantly from 2005 to 2007, participants sued, claiming that Amgen violated their fiduciary duty of care under ERISA by continuing to offer the Amgen common stock fund as an investment option in the plans, when they knew (or should have known) that the stock was being sold to participants at… Continue Reading

Department of Labor Liberalizes Rules for Socially Responsible Investments

in Fiduciary Issues

On October 22, 2015, the Department of Labor (DOL) issued new guidance on socially responsible investments or economically targeted investments (ETIs), which are investments chosen, at least in part, for reasons other than their expected investment return to the plan. While ETIs are not defined by ERISA, they are commonly understood to cover a broad array of arrangements, such as union plans investing only in unionized companies or funds that invest only in “green” or “sustainable” investments. ETIs have long been controversial because they may be viewed as inconsistent with ERISA fiduciary standards. ERISA requires plan fiduciaries to act solely… Continue Reading

Plan Sponsor Forced to Restore Plan Benefits Due to Intentionally Misleading Communications to Employees

in Fiduciary Issues, Qualified Plans, Retirement Plans

On September 29, 2015, the U.S. District Court for the Southern District of New York issued a decision that emphasizes the importance of accurate communications to employees regarding changes in qualified retirement plan benefits. In Osberg v. Foot Locker, Inc., the plaintiffs in the class action consisted of nearly 16,000 participants in a defined benefit pension plan sponsored by Foot Locker. Prior to 1996, Foot Locker sponsored a traditional defined benefit pension plan in which benefits were defined as an annual life annuity commencing at age 65. Like most traditional defined benefit pension plans, the plan also provided early retirement… Continue Reading