Header graphic for print
Banking & Finance Law Report

Category Archives: ERISA

Subscribe to ERISA RSS Feed

Here we go again: Does the DOL’s request for information regarding self-directed brokerage accounts mean new fee disclosure requirements are coming soon?

Posted in ERISA

If you’re a fan of the tv show “The Simpsons,” you might remember an early episode where Homer Simpson launched a crusade against every public safety issue in the city. The result was practically every square inch of the town contained signs alerting people to every dip, pothole, and other nuisance on the roads. After watching that episode again recently (we won’t admit which one of us got sucked into the tv marathon), we were reminded of a first year torts class in law school that discussed the efficacy of public safety notices. The professor made the comment, “A wealth of information leads to a poverty of attention.”

That comment is especially fitting with respect to ERISA fee disclosures, particularly regarding defined contribution plans. Recently, the DOL requested information and comments about self-directed brokerage accounts (“SDBAs”). The DOL’s history with trying to provide guidance on SDBAs provides a great illustration of the difficulty of determining how much information is too much. On one hand, the DOL has been concerned that defined contribution plan participants will be unable to navigate the wide universe of investment options available under SDBAs unless strict procedural rules are in place. On the other hand, the plan sponsor community has tried to make clear that rank-and-file employees typically are not interested in SDBAs. Instead, more sophisticated investors request this feature, and they do not need a detailed protective regime. The DOL, to its credit, has recognized the different points of view on this issue and has …


Continue Reading →

Deadline Approaching for Retirement Plan Fee Disclosures

Posted in ERISA

The deadline is quickly approaching for written fee disclosures by covered service providers.  This creates new homework for financial institutions who are plan sponsors–in the form of enhanced fiduciary review obligations and a suggested need to review (and/or create) written service agreements.

By now folks who work in the tax-qualified retirement industry are well (and perhaps painfully) aware that the United States Department of Labor ("DOL") issued final service provider fee disclosure regulations early this year.  As the deadline for service providers to provide the required disclosures (i.e., July 1, 2012) draws close, it seems like an opportune time to consider what plan sponsors should do with all this data, and what other steps they should consider taking.  

Here is a link to an overview of the implications for plan sponsors on one of our sister PWMA blogs that focuses primarily on employee benefit plans:   http://www.employeebenefitslawreport.com/2012/06/fee-disclosures-are-almost-here-what-should-plan-sponsors-do-now/


Continue Reading →

Estoppel in ERISA: Simple Mistakes Can Lead to Costly Litigation

Posted in ERISA

Estoppel in ERISA: Simple Mistakes Can Lead to Costly Litigation

Plan administrators need to take steps to ensure that the information they provide to plan participants is accurate. Otherwise, plan participants may use this misinformation to bring an estoppel claim.

In civil litigation, defendants have long relied on equitable estoppel as an affirmative defense. The basic elements of an equitable estoppel defense are:

  • a definite misrepresentation of fact made to another person with the expectation that they will rely on it; and
  • reasonable and detrimental reliance on the misrepresentation

See, e.g., Heckler v. Community Health Servs. of Crawford County. The rationale behind this defense is that a party who unfairly misrepresents facts should not then be permitted to benefit by means of such misrepresentation.…


Continue Reading →

The Fiduciary Exception to the Attorney-Client Privilege — “Document Everything” is a Best Practice, Except When It Isn’t

Posted in ERISA

The following was recently posted by our colleague Seth Hanft on our sister blog Employee Benefits Law Report . It provides a reminder to in-house counsel addressing employee benefit claims that their communications with their benefits personnel regarding employee benefits claims may not be protected by the attorney-client privilege, an issue frequently encountered by in-house counsel at financial institutions.

Keep in mind that both counsel and benefits managers often wear fiduciary and non-fiduciary hats when addressing benefits plans issues and it is not always clear which hat they are wearing when. Therefore, to avoid potential spill over of this fiduciary exception to their other areas of responsibility, in house – and outside – counsel should : (1) separate advice regarding fiduciary and non-fiduciary (e.g. plan sponsor, settlor, and employment) issues, so that privileged and non-privileged advice is not communicated at the same time and (2) be explicit in written communications as to the non-fiduciary purpose of legal advice being provided regarding non-fiduciary issues.…


Continue Reading →