Nevin's Data "Points"

 When the Labor Department issued last month what it called “new guidance” that it further described as “the first time the department’s Employee Benefits Security Administration has issued cybersecurity guidance”—well, I, for one, was expecting… guidance.  However, rather than an advisory opinion, information letter or even a field assistance bulletin, it turned out instead to be three documents outlining what were termed “ best practices  for maintaining cybersecurity.” The issue of cybersecurity has, of course, loomed large in recent months, reportedly emerging as a focus in Labor Department audits  and as a point of contention [i]  in participant lawsuits. In fact, even the preamble to the final e-delivery regulations  stated a year ago that “…the Department expects that many plan administrators, or their service or investment providers, already have secure systems in place to protect covered individuals’ personal information.”  ...

Recent DOL guidance on missing participants seems to fall short of what plan fiduciaries want/need—but may offer fiduciaries some key insights to avoid future problems. On Jan. 12, 2021, the Department of Labor (DOL) released a triple dose of guidance  related to helping retirement plan fiduciaries meet their obligations under the Employee Retirement Income Security Act (ERISA) to distribute retirement benefits to missing participants. Arguably the guidance, while welcome, is less than plan sponsors might have wished (and previously asked ) for—and it concerns an issue that most plan sponsors of my acquaintance continue to insist isn’t one, though the Labor Department is clearly of a different mind. In fact, in the first of the three pieces of guidance, the Employee Benefit Security Administration (EBSA) cautions: “The first step in addressing any problem often is knowing that there is one.” [i] The “issue,” of course, is fulfilling the fiduciary obligation to ...

Whether or not you’re in the habit of making New Year’s resolutions, this is a time of year when reassessments seem appropriate, and perhaps in no area as much as that of retirement plan administration. Many find themselves in the role of plan sponsor (or plan committee) with no background, limited training, and far more responsibility than they may appreciate at the outset. For those of you who find yourself starting the year with new plan sponsor clients, or new members of the plan committee, or perhaps even incumbents who could benefit from some New Year’s resolutions, here’s five things every plan sponsor should know: How much your 401(k) plan costs. Okay, fees are just one of several factors plan sponsors need to consider, but when the fees for services are paid out of plan assets, there is an obligation to understand the fees and expenses charged. This is important because you are expected to ensure that the fees paid and services rendered to the plan are reasonable. It’s h...

The Nov. 7 issue of The   New York Times included a story about “ Finding, and Battling, Hidden Costs of 401(k) Plans .” The story focused primarily on the plight of Ronald Tussey, the named plaintiff in Tussey v. ABB, Inc. , one of the so-called “excess fee” revenue sharing cases. Tussey, now 70, claims that he was told that his retirement plan was “free,” even though, according to the Times article, “middlemen 1 were deducting expenses from his savings.” The story also notes that Tussey “never thought that his retirement plan might be flawed,” and that “he trusted his company so much he kept his money in his 401(k) long after he left.” Over the years, I have been astounded at the allegations of fiduciary misconduct in these revenue-sharing cases. Each has its own flavor, of course, but for the most part they have struck me not so much as the outcomes of bad acts, per se, but rather steps that should have been taken in keeping with their fiduciary duty to ensure that t...