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Season 4, Episode 8: Forfeitures, Managed Accounts and a "New" Fiduciary Rule Challenge
In this episode, Nevin & Fred discuss new lawsuits regarding fiduciary breaches on the use of plan
forfeitures, a managed account default – and the Labor Department’s new fiduciary rule.
In late May a motion to dismiss the suit in one of the half-dozen (and counting) suits challenging the use of plan
forfeitures to reduce employer contributions was itself dismissed, with a federal judge deciding that the plaintiffs had made a plausible case to proceed.
Also in late May, participant-plaintiff Debra Hanigan claimed that the plan fiduciaries of the $5.1 billion Bechtel Trust and Thrift Plan “breached their fiduciary duty of
prudence to Plaintiff and other Plan participants, causing tens of millions of dollars of harm to Plaintiff and Class Member’s retirement accounts” – by defaulting participant investments into a managed account option that she claimed was nothing more than an expensive target-date fund.
And then in late April, the Labor Department’s new Retirement Security Rule (generally referred to as the
fiduciary rule) got its first challenge in Federal Court. Claiming that the rule was “contrary to law and arbitrary and capricious,” the suit seeks “preliminary and permanent injunctive relief to prevent the DOL from attempting to enforce these unlawful rules and regulations.”
Whew!
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By Nevin Adams
4.9
1717 ratings
In this episode, Nevin & Fred discuss new lawsuits regarding fiduciary breaches on the use of plan
forfeitures, a managed account default – and the Labor Department’s new fiduciary rule.
In late May a motion to dismiss the suit in one of the half-dozen (and counting) suits challenging the use of plan
forfeitures to reduce employer contributions was itself dismissed, with a federal judge deciding that the plaintiffs had made a plausible case to proceed.
Also in late May, participant-plaintiff Debra Hanigan claimed that the plan fiduciaries of the $5.1 billion Bechtel Trust and Thrift Plan “breached their fiduciary duty of
prudence to Plaintiff and other Plan participants, causing tens of millions of dollars of harm to Plaintiff and Class Member’s retirement accounts” – by defaulting participant investments into a managed account option that she claimed was nothing more than an expensive target-date fund.
And then in late April, the Labor Department’s new Retirement Security Rule (generally referred to as the
fiduciary rule) got its first challenge in Federal Court. Claiming that the rule was “contrary to law and arbitrary and capricious,” the suit seeks “preliminary and permanent injunctive relief to prevent the DOL from attempting to enforce these unlawful rules and regulations.”
Whew!
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