401(k) Roundtable

This is part two of my conversation with Jerry Schichter, to be clear that means there was a part one which was last week. I would strongly suggest you listen to that one first to gain some perspective on Jerry and the retirement plan litigation he has been responsible for.

That said, in this episode we pick up right where we left off last time and finish off the conversation around whether Jerry feels some of the strategies employers and plan fiduciaries use to determine the reasonableness of plan fees are effective. Then we wade into some waters were Jerry uses some pretty clear and strong language to describe a few practices he sees in the market. Right or wrong, his comments will keep you on the edge of your seat. I also give Jerry a chance to address some of his critics, tell us whether he plans to ride off into the sunset in the near future and share a key concept in closing that should provide some comfort to employers. I hope you enjoyed part one, I think this one is even better.

Guest Bio

Jerry Schlichter, Founding and Managing Partner of Schlichter, Bogard & Denton, pioneered Employee Retirement Income Security Act (ERISA) excessive fee litigation and has represented employees and retirees in 20 401(k) excessive fee cases.

In recent rankings of the most influential people in the 401(k) industry by 401kwire.com, Schlichter has repeatedly ranked in the top 5. This is in recognition of his accomplishments with numerous nationwide class actions brought on behalf of employees and retirees in large, corporate 401(k) plans, alleging excessive fees and conflicts of interest that reduce employees' and retirees' retirement assets.

In 2006, after a year and nine months of investigation into the industry, he and his firm filed his first in a series of cases on behalf of employees and retirees. At that time, no case had ever been brought alleging excessive fees in a 401(k) plan, despite the 401(k) having become America's de facto retirement system, and there being over 500,000 plans in America. In addition, the Department of Labor had never brought a case for excessive fees in a 401(k) plan.

Since that time his firm has reached precedent setting settlements in over a dozen cases, on behalf of 401(k) plan employees and retirees representing over 1.5 million workers and retirees. These settlements have not only included monetary recoveries for the workers and retirees, but each has also included provisions going forward to reform the plans and to ensure that fees will be reasonable in the future.

Schlichter and his firm have been referred to by federal judges as "preeminent "in the field of 401(k) fee litigation; as demonstrating "extraordinary skill and determination"; as making "a significant, national contribution," having "educated plan administrators, the Department of Labor, the courts" about fees and fiduciary obligations; and he has been referred to by federal judges as a "private attorney general," causing fees to come down in the entire 401(k) industry.

He has also been referred to as the "Lone Ranger" of 401(k) plans in the NY Times, and the term "Schlichterized" has been used to describe being sued by his firm.

401(k) Fridays Podcast Overview

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your workplace retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over 100 prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!

This episode marks a few milestones on the 401(k) Fridays Podcast, it's the 100th episode, the first episode of 2018 and features part 1 of 2 of my conversation with Jerry Schlichter. For some of our listeners Jerry requires no introduction. If you are not familiar, Jerry and his firm Schlichter Bogard & Denton have been the driving force behind many of the headline grabbing 401(k) lawsuits over the past decade.

As you will hear, his firm has successfully garnered multi-million dollar settlements, argued a 401(k) case in front of the US Supreme Court and has recently filed several more lawsuits against some very prominent universities. In part 1 of our conversation we discuss the origins of 401(k) litigation against employers, the "bet the farm" decision he made with his firm, why they turn down certain cases, why some cases succeed and others don't, an important beacon for plan fiduciaries to follow and much more.

What clearly comes through is that Jerry has a tremendous passion for retirement plan participants, he is very knowledgable about how retirement plans work and has strong opinions on what employers should and should not do if they don't want to run into him or his firm in the future!

Guest Bio

Jerry Schlichter, Founding and Managing Partner of Schlichter, Bogard & Denton, pioneered Employee Retirement Income Security Act (ERISA) excessive fee litigation and has represented employees and retirees in 20 401(k) excessive fee cases.

In recent rankings of the most influential people in the 401(k) industry by 401kwire.com, Schlichter has repeatedly ranked in the top 5. This is in recognition of his accomplishments with numerous nationwide class actions brought on behalf of employees and retirees in large, corporate 401(k) plans, alleging excessive fees and conflicts of interest that reduce employees' and retirees' retirement assets.

In 2006, after a year and nine months of investigation into the industry, he and his firm filed his first in a series of cases on behalf of employees and retirees. At that time, no case had ever been brought alleging excessive fees in a 401(k) plan, despite the 401(k) having become America's de facto retirement system, and there being over 500,000 plans in America. In addition, the Department of Labor had never brought a case for excessive fees in a 401(k) plan.

Since that time his firm has reached precedent setting settlements in over a dozen cases, on behalf of 401(k) plan employees and retirees representing over 1.5 million workers and retirees. These settlements have not only included monetary recoveries for the workers and retirees, but each has also included provisions going forward to reform the plans and to ensure that fees will be reasonable in the future.

Schlichter and his firm have been referred to by federal judges as "preeminent "in the field of 401(k) fee litigation; as demonstrating "extraordinary skill and determination"; as making "a significant, national contribution," having "educated plan administrators, the Department of Labor, the courts" about fees and fiduciary obligations; and he has been referred to by federal judges as a "private attorney general," causing fees to come down in the entire 401(k) industry.

He has also been referred to as the "Lone Ranger" of 401(k) plans in the NY Times, and the term "Schlichterized" has been used to describe being sued by his firm.

401(k) Fridays Podcast Overview

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your workplace retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over 100 prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!

No interview with a retirement industry expert today. This episode shares my top ten highlights and themes from nearly 100 conversations on the podcast!

Be sure to check out our first two episodes of 2018 which are my two part conversation with Jerry Schlichter, the plaintiffs attorney driving much of the 401(k) and other retirement plan litigation against employers! Part 1 will be posted on Friday, January 5th and Part 2 on Friday, January 12th.

Don't forget that if you have been enjoying the podcast please mention it to a friend, share on social media or leave a review on iTunes or your favorite podcast app. All of that goes a long way to helping grow our audience, attract high quality guests and keep sharing high quality timely content.

401(k) Fridays Podcast Overview

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your workplace retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over ninety prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!

Every now and then its a little fun to go off the beaten path of 401(k) plan topics and explore something related, but different. In the past, we have done that with international retirement benefits, the importance of company culture and on this episode we delve into health benefits programs. For this episode, our last full episode of 2017, my guest Ed Fensholt, an ERISA Attorney and Senior Vice President and Director of Compliance Services with Lockton Benefits Group keeps things interesting and entertaining as we explore his list of the five important heath plan trends for 2018.

What really jumped out to me was that so much of what we talked about had direct parallels or overlapped many of the retirement plan topics we have explored on the podcast. I'm not going to steal any of Ed's thunder and give away his list, but what I will tell you is don't miss the last point.

Guest Bio

Ed Fensholt is a Senior Vice President and Director of the Compliance Services national practice at Lockon. Our team of attorneys supplies our clients and the Lockton associates who serve them with a broad range of compliance-related support for employee benefits issues arising under ERISA, HIPAA, COBRA, the Internal Revenue Code and other select federal and state statutes and regulations, including the Affordable Care Act. Employers face significant challenges under the health reform legislation and its regulatory coattails. Our practice helps clients understand the impact to their benefits programs and get ahead of significant changes and requirements. Our work in this regard includes detailed analysis, alerts, blog postings, webcasts, seminars and a wide variety of ACA-related tools, checklists, grids, etc. Ed is a frequent lecturer inside and outside the organization and a published author on employee benefits matters.

401(k) Fridays Podcast Overview

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your workplace retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over ninety prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!

If you are curious, concerned or confused about what's going on with interest rates and how it might impact the bond/fixed income market or some of the investments in you 401(k) investment menu, I have great news for you! My conversation with Brett Wander, the Chief Investment Officer for Fixed Income at Charles Schwab and Jake Gilliam, a senior Mutli-Asset Class Strategist also with Charles Schwab clears a lot of things up! Brett shares some great economic insights and Jake does an excellent job tying those concepts to how they might impact various investment strategies.

If you're thinking, this is going to be really confusing or it might be over your head, stop right there because as usual, we take what can be a complex or maybe what some would call a boring topic and break it down into easy to understand pieces with some great ideas and questions you can bring back to your next investment committee meeting.

Be sure to listen for some key observations about the overall direction of interest rates, how that may or may not impact your fixed income options, some key questions to ask about the bond exposures in your target date fund and what a yield trap is and how plan fiduciaries could unknowingly already be in one! I will have to say, despite this being a little bit of a longer episode there isn't anything i would remove and i have already listened to this several times and have come away with new insights each time.

Guest Bios

Brett Wander is Senior Vice President and Chief Investment Officer of Fixed Income for Charles Schwab Investment Management, Inc. (CSIM). He is responsible for all aspects of the firm's fixed income and money market portfolios, leading a team of more than 20 investment professionals.

With more than 25 years of investment management experience, Mr. Wander has been intimately involved in the design, development and oversight of a wide range of active, indexed and alternative fixed income strategies. His expertise spans a wide range of global and domestic markets and sectors. Prior to joining CSIM in June 2011, Mr. Wander was senior managing director at State Street Global Advisors, where he managed and directed the firm's $30 billion active fixed-income enterprise. He also held senior fixed-income leadership positions at Loomis Sayles, State Street Research and Payden & Rygel. In those roles, he designed investment processes, developed risk management methodologies, managed investment teams, and consistently generated strong investment performance track records.

Jake Gilliam is a Senior Multi-Asset Class Portfolio Strategist for Charles Schwab & Co., Inc. supporting Charles Schwab Investment Management Inc.'s (CSIM) Asset Allocation and Sub-Advisor Oversight Committees. He contributes to strategic decisions for all multi-asset class portfolios as well as several single asset-class portfolios within CSIM and for the Schwab Bank Collective Trust Funds. He works closely with the Chief Investment Officers, Portfolio Managers, Research, and Sub-Advisor Oversight teams on a frequent basis. Mr. Gilliam also represents CSIM's multi-asset class strategies to the institutional marketplace, clients, and the media.

Previously, he was the day-to-day Senior Portfolio Manager for Schwab Bank's Collective Trust Funds and Head of Sub-Advisor oversight for CSIM. Additionally, Mr. Gilliam served as interim Head of Asset Allocation and Portfolio Manager for CSIM's Multi-Asset Class funds. Mr. Gilliam also developed the Schwab Corporate and Retirement Services Institutional Investment Analyst team and oversaw the due diligence process for maintaining the Schwab Focus List™. Earlier in his career, he also worked as a sell-side Equity Research Associate covering the food retail and restaurant industries.

401(k) Fridays Podcast Overview

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your workplace retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over ninety prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!

When you take a new job or start with a new company, generally there is a job description, clear roles & responsibilities, a training program or on boarding process to help you get your feet underneath you in your new role. However, when employers create a retirement plan committee many of the people they tap to be members, and thus plan fiduciaries, have never been a fiduciary to a workplace retirement plan and aren't really sure what that means and receive no training. If this sounds at all familiar, my guest today, Don Trone, is the Co-founder & CEO of 3Ethos should be a breath of fresh air!

Over his career he has trained over 10,000 fiduciaries, has been called the "Father of Fiduciaries" and has testified before the U.S. Senate on fiduciary issues, and much more. During our conversation, Don shares his experience, good and bad, on what he has learned over the years to help retirement plan fiduciaries embrace their roles & responsibilities in a way that empowers them to make better decisions, protect themselves form liability and have a positive impact of their retirement plan and participants. As an aside, its not every day that you hear fiduciary and goat rodeo used in the same sentence, that was a new one on me, but it made sense!

Guest Bio

Don Trone is the CEO and co-founder of 3ethos. Don was the founding CEO of fi360 and the AIF and AIFA designation; founder and President of the Foundation for Fiduciary Studies; and the first person to direct the Institute for Leadership at the U.S. Coast Guard Academy.

Over the past three decades, Don has trained more than 10,000 financial advisors and trustees on the subject of procedural prudence. In 2015 he was named by Investment Advisor magazine as the "Father of Fiduciary" and one of the 35 most influential people in the financial services industry.

In 2003, he was appointed by the U.S. Secretary of Labor to represent the investment counseling industry on the ERISA Advisory Council, and in 2007 he testified before the U.S. Senate Finance Committee on the fiduciary issues associated with the management of retirement plans.

He is the author or co-author of twelve books on the subject of fiduciary responsibility, portfolio management, and leadership.

Don is a graduate of the U.S. Coast Guard Academy and is the president of his class. He served for ten years on active duty, most notably as a long-range search and rescue helicopter pilot. He has a Master's from The American College and has completed post-graduate studies in theology from the Pittsburgh Theological Seminary and Trinity Episcopal Seminary.

401(k) Fridays Podcast Overview

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your workplace retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over ninety prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!

Financial Wellness, while a very hot topic, is not yet mainstream. One reason could be there has not been a clear value proposition for the employer to invest the time and/or the money to roll it out. Today, my conversation with Lynn Pettus, the National Leader for Ernst & Young's Employee Financial Services Practice sheds some light on that topic. Our conversation begins with exploring what financial wellness is or isn't, how employers are measuring the impact of financial stress in the workplace and what can be done to help employees. Also, Lynn talks about her biggest competition (its not who you think it is), discusses the value of speaking to peers who have embraced financial wellness and ways you can either dip your toe in the water and just offer gold stars to engaged employees or go "all in" with a fully integrated health, financial and emotional wellness strategy.

Lynn references and shared some of the work Ernst & Young has done on financial wellness which we have posted on the website at www.401kfridays.com/pettus if you want to check it out. While you're there, don't forget to subscribe to our email list so you don't miss any valuable updates on new episodes and other valuable information!

Guest Bio

Lynn Pettus is a tax partner located in Charlotte, North Carolina. She serves as the National Director for the Employee Financial Services practice and relationship partner for the Southeast and Southwest areas. Her time is concentrated on serving large private and public sector employers in the strategic development of financial education and counseling programs focused on employee benefit plans. Ms. Pettus also helps coordinate Human Capital resources, firm-wide, to assist in serving area clients in the most efficient and effective manner possible.

Ms. Pettus has spoken at The Conference Board's Pensions & Retirement Conferences and has presented at The Wharton School, Boettner Center for Pensions and Retirement Research. She is co-author of articles for Benefits Quarterly, the Society for Human Resource Management and the Pension Research Council. Ms. Pettus has spoken in numerous other forums and has been quoted in the general media (e.g., New York Times, Wall Street Journal), and trade publications (e.g., Employee Benefit News, Employee Benefit Advisor, National Health & Underwriter), as well as other media.

As a graduate of Converse College in South Carolina, Ms. Pettus holds a bachelor's degree in accounting. She is a Certified Public Accountant, Personal Financial Specialist (AICPA Designation), Certified Investment Management Analyst, and Registered Investment Advisor. Additionally, she is a member of the American Institute of Certified Public Accountants, the North Carolina Association of Certified Public Accountants, the Investment Management Consultants Association, and the National Association of Securities Dealers (Series 65 Examination).

Ms. Pettus actively supports women's initiatives through her involvement with Ernst & Young's Inclusiveness Advisory Council, National Tax Inclusiveness Steering Committee, Professional Women's Network and through her community work with the Junior League of Charlotte. She has served on the boards of local charitable organizations including Carolina Voices and the Carolina Raptor Center. Ms. Pettus has also acted as Ernst & Young's coordinator for the Arts & Science Council Fund Drive and supports the United Way.

401(k) Fridays Podcast Overview

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your workplace retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over ninety prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!

Nine years into a bull market, that generally gets people talking about bubbles. Today, I am excited to have Rob Arnott, Chairman of Research Affiliates join me for a second round on the podcast! Why have him back you might ask, well Rob and his firm manage nearly $200 Billion dollars and over the years have made some bold statements, pioneered several unconventional strategies and challenged conventional wisdom to search for solutions that add value for investors.

As you will hear, Rob is not shy to share his thoughts on the current state of the financial markets, address a bubble he sees developing in the market and provide some different perspectives, sometimes very different on some popular investment trends. If you are listening and think this one might not be for you, I would encourage you to give Rob a chance before moving on. In addition to his unconventional thinking, I love that he can take some complex topics in the market and make them easy to understand, regardless of your level of investment or financial acumen.

Guest Bio

Mr. Arnott is the founder and chairman of Research Affiliates, a subadvisor to PIMCO. In 2002, he established Research Affiliates as a research-intensive asset management firm that focuses on innovative asset allocation and alternative indexation products. He previously served as chairman of First Quadrant, as president of TSA Capital Management (now part of Analytic Investors), and as vice president at The Boston Company. He also was global equity strategist at Salomon Brothers. He has published more than 100 articles in journals such as the Journal of Portfolio Management, the Harvard Business Review and the Financial Analysts Journal, where he also served as editor in chief from 2002 through 2006. He graduated summa cum laude from the University of California, Santa Barbara, in 1977 in economics, applied mathematics and computer science.

401(k) Fridays Podcast Overview

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your workplace retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over eighty five prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!

The idea of changing workplace retirement plan recordkeepers, or going through a "conversion" in retirement plan lingo, can be a daunting and stressful proposition if you are not familiar with the process. If it has been a little while since you changed recordkeepers or if you just never had the pleasure, my conversation today with Tom Dennis, Director and Head of Defined Contribution Implementation Services for John Hancock should be helpful.

We tackle head on some of the most common concerns and misperceptions such as the need to make a change on January 1st, how long blackout periods last, what happens to your employees' money during a conversion and much more! We will also leave you with several strategies to help you take the mystery and stress out of the process so that your upcoming or next record keeping change can dare I say, be as close to seamless as possible!

Guest Bio

Tom Dennis is Director, Defined Contribution Implementation for John Hancock Retirement Plan Services (JHRPS), a position he held with New York Life Retirement Plan Services, which merged with JHRPS in April 2015. In this role, he is responsible for the oversight, guidance, and support of a team of Project Managers implementing plans onto JHRPS's mid and large market recordkeeping platform.

With 28 years in the retirement industry, Tom provides overall accountability for the successful implementation of new defined contribution qualified and non-qualified plans, and corporate action activity. Prior to joining the JHRPS, he most recently worked as Associate Managing Director of Retirement Research for LIMRA Secure Retirement Institute. Prior to LIMRA, Tom spent 11 years at Fidelity Investments leading large market Implementation and Client Service teams.

Tom received a B.A. in Economics from the University of Connecticut, and an M.B.A. from the University of Hartford.

Outside of work, he enjoys golf, and is the former President of the Tolland (CT) Soccer Club.

401(k) Fridays Podcast Overview

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your workplace retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over eighty five prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!

While I've been in the retirement plan business for over twenty years now, one thing I had never found was an easy to read book that an employer or someone new to the business could pick up and finish in one or two sittings and get their arms around where our retirement plan system has been, where it is today and some ideas on where it is headed in the future. My guest today Bob Reynolds, the President and CEO of both Putnam Investment and Great-West Financial must have shared my frustration and taken it upon himself to fill the void! During our conversation, we explore mostly his thoughts on how our retirement system is doing today and some recommendations for employers he highlights in his new book, From Here to Security: How Workplace Retirement Plans Can Keep America's Promise. As you will hear, while our system is not perfect it is a strong and healthy but needs the ongoing leadership of employers to improve retirement plan coverage within the workforce and to help employees who already have access to retirement plans advance farther down the path towards a successfully replacing their income in retirement. I won't steal Bob's thunder, but don't you worry, we leave you with plenty of great ideas and strategies you can bring to your next retirement plan committee meeting.

Guest Bio

Robert L. Reynolds is President and Chief Executive Officer of both Putnam Investments and Great-West Financial, which is one of the nation's top providers of retirement savings products and services through its Empower Retirement division.

Long respected as an industry statesman, Mr. Reynolds has been a driving force of innovation and progress in institutional and retail financial services. Prior to joining Putnam in 2008, Mr. Reynolds was Vice Chairman and Chief Operating Officer of Fidelity Investments.

Mr. Reynolds' accomplishments have earned multiple industry honors over time. He was named Fund Leader of the Year at the Mutual Fund Industry Awards in 2010 for the strategic improvements he initiated at Putnam. The following year, Putnam, under the leadership of Mr. Reynolds, was honored as Retirement Leader of the Year for initiatives and innovative solutions in the workplace savings arena. Mr. Reynolds has also received a Lifetime Achievement Award from PLANSPONSOR magazine for popularizing employer sponsored 401(k) plans.

Mr. Reynolds currently serves on several not-for-profit boards, including those of West Virginia University Foundation, Concord Museum, Dana-Farber Cancer Institute, and the U.S. Ski and Snowboard Association Foundation. He is Chairman of the Boston Advisory Board of the American Ireland Fund, a member of the Massachusetts General Hospital President's Council, and a member of the Chief Executives Club of Boston and the Council on Competitiveness.

Mr. Reynolds earned a B.S. in Business Administration, Finance, from West Virginia University, where he also received an Honorary Doctorate in Business Administration and a Distinguished Alumni Award. In addition, Mr. Reynolds is a recipient of the Boston College President's Medal of Excellence and the Manhattan College De La Salle Medal. He lives in Concord, Massachusetts.

401(k) Fridays Podcast Overview

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your workplace retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over eighty five prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!