Fiduciary and Investment Issues Archives - Page 6 of 23

Investor Guidelines for Shared Value Creation in Employee Ownership Transitions Unveiled

by Ted Becker | Feb 27, 2020 | Employee Benefits, Employee Stock Ownership Plans (ESOPs), Fiduciary and Investment Issues

One of the big questions for the employee ownership field is, why has the number of US employee-owned firms failed to grow significantly over the last couple of decades?

An upcoming paper from Fifty by Fifty proposes that the barrier to growth is a lack of agency. Employees don’t have the knowledge, skills or capital to pursue a buyout of their employer; and employers, knowing little about the benefits of selling to employees, are more likely to respond to an opportunity that knocks on their door, such as an offer from a private equity firm or a strategic buyer. McDermott’s Ted Becker and Erin Turley share their thoughts on the guidelines in a recent article published on Medium.

Access the full article.

Originally published on Fifty by Fifty, January 29, 2020

The Biggest ERISA Decisions of 2019

by Richard J. Pearl | Jan 14, 2020 | Benefit Controversies, Employee Benefits, Fiduciary and Investment Issues, Retirement Plans

In a relatively slow year for benefits rulings, multimillion-dollar settlements were the star of the show. And amid the slew of settlements this year, two court rulings stood out.

McDermott’s Richard J. Pearl contributes to a Law360 article that breaks down the Ninth Circuit ruling allowing benefit plan managers to force fiduciary-breach suits into solo arbitration and the Tenth Circuit holding that insurers who determine workers’ profits from 401(k) investments aren’t fiduciaries.

Access the full article.

Originally published by Law360, December 2019

Ninth Circuit Considers Rehearing in ERISA Arbitration Case

by Richard J. Pearl and Ted Becker | Nov 5, 2019 | Benefit Controversies, Fiduciary and Investment Issues, Retirement Plans

The Ninth Circuit signaled that it might rehear Dorman v. The Charles Schwab Corp., where earlier this year it held that a mandatory arbitration provision required arbitration of an ERISA fiduciary-breach claim.

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High Court Pension Row May Have Broad Impact

by Richard J. Pearl | Oct 1, 2019 | Benefit Controversies, Fiduciary and Investment Issues, Retirement Plans

A US Supreme Court case pitting pensioners against US Bank could have a wide-ranging impact on who can bring suit under ERISA, whether they participate in a defined benefit pension plan or a 401(k) plan.

Recently, on Law360, McDermott’s Richard J. Pearl weighed in on the impact of Thole v. US Bank, one of three ERISA cases that the US Supreme Court will decide this term. The case, discussed in greater detail in our On the Subject, will address whether defined benefit pension plan participants have standing to bring suit under ERISA if their plan is fully funded.

Although the case focuses on participants’ ability to bring suit on behalf of defined benefit pension plans, according to Pearl, the case seems to ask the high court to answer a question that often crops up in defined contribution plan litigation, as well: Whose injury matters, the plan’s or the person’s? As a result, the court’s decision could impact not only litigation involving defined benefit pension plans, but also defined contribution plans, where case law is still being developed around what gives a participant grounds to sue on behalf of a plan.

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Federal Court Certifies Class in Multiple-Plan ERISA Challenge to Health-Plan and Retirement-Plan Fees

by Richard J. Pearl | Sep 10, 2019 | Benefit Controversies, Employee Benefits, Fiduciary and Investment Issues, Health and Welfare Plans, Retirement Plans

A Texas federal court certified a class in case brought by participants in one plan, and allowed those participants to represent participants in unaffiliated plans. The claims alleged that the defendants, who marketed and provided services to all of the plans, breached fiduciary duties by imposing excessive fees. See Chavez, et al. v. Plan Benefits Services, Inc., et al., No. AU-17-CA-00659-SS, United States District Court for Western District of Texas (Aug. 30, 2019).

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Federal Court Dismisses Challenge to ESOP Transaction

by J. Christian Nemeth and Richard J. Pearl | Aug 13, 2019 | Benefit Controversies, Employee Benefits, Employee Stock Ownership Plans (ESOPs), Fiduciary and Investment Issues

In Lee v. Argent Trust Co., the court dismissed ERISA claims challenging an ESOP stock transaction because the plaintiff, who “fundamentally misunderstands the nature of the” ESOP transaction, did not allege that she suffered any injury. This decision is important to educate other courts about economics, particularly in cases where plaintiffs rely on little more than the post-transaction valuation as evidence of supposed overvaluation.

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On Top of ESOP Developments: Insights from the 42nd ESOP National Conference

by Ted Becker | Aug 1, 2019 | Employee Stock Ownership Plans (ESOPs), Fiduciary and Investment Issues, Retirement Plans

The 2019 ESOP National Conference, an annual gathering for employee owners from all levels, association volunteer leaders and expert professionals, took place May 22–24. Two McDermott partners, Theodore (Ted) M. Becker and Erin Turley, presented three sessions during the conference, the slides of which are available for download on the conference website. See descriptions of the presentations below: (more…)

Big ERISA Decisions on the Horizon—SCOTUS to Review Third ERISA Case this Term

by Brigid McCarthy, Brian Tiemann, J. Christian Nemeth and Richard J. Pearl | Jul 23, 2019 | Benefit Controversies, Employee Benefits, Fiduciary and Investment Issues, Retirement Plans

The US Supreme Court recently agreed to review the Eighth Circuit’s decision in Thole v. US Bank, in which the Eighth Circuit held that participants in an overfunded defined benefit pension plan lack standing to sue for fiduciary breaches under ERISA. The Supreme Court’s decision in this case—the third ERISA case accepted by the court this term—could have significant implications for plan sponsors and plan fiduciaries. Many believe that if the Supreme Court rules that the plaintiffs have standing to bring suit, it could encourage a proliferation of litigation against plans where there is no actual impact on participants’ benefits.

Access the full article.

It Could Happen to You: Tips for Acing a Benefit Plan Audit

by Brian Tiemann | Jul 2, 2019 | Employee Benefits, Employee Stock Ownership Plans (ESOPs), Fiduciary and Investment Issues, Health and Welfare Plans, Retirement Plans

Over the past several years, the IRS and DOL have significantly increased the number of benefit plans audits conducted each year.

As a result, it is important for plan sponsors to understand the types of issues that often arise in connection with such audits. At the recent PSCA 2019 National Conference, Brian Tiemann explained what plan sponsors should expect if their benefit plan is selected for audited. More specifically, Brian discussed the ways audits are typically triggered and how to respond when a plan is audited. In addition, Brian outlined some of the most common retirement and health and welfare compliance issues identified in plan audits. He also discussed how plan sponsors can prepare for audits and even address potential compliance issues before they occur.

View the full presentation.

Employee Benefit Plans Master Trust Investments – Financial Statement Changes

by Alan D. Nesburg, PC and Charnae Supplee | Jun 20, 2019 | Employee Benefits, Fiduciary and Investment Issues, Health and Welfare Plans, Retirement Plans

The Financial Accounting Standards Board (FASB) adopted changes to the required financial statement disclosures of employee benefit plans with investments in master trusts. The changes will standardize the content and presentation of information reported in plans’ financial statements. Learn about the six significant items the FASB guidance addresses.

Access the full article.

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