ERISA

College Retirement Plans under Fire for Excessive Investment Fees

Employment Benefits Law, Retirement Plan/401k/Pension

The past ten to fifteen years has given rise to a set of lawsuits against 401k plan administrators over excessive plan fees and revenue sharing agreements between plan administrators and recordkeepers. We are probably approaching the end of this wave of excessive fee litigation against for-profit employers for 401k plans. A new wave of excessive retirement […]

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Why is there a 10% early withdrawal penalty to cash out a 401k?

Employee rights lawyer, Employment Benefits Law, Retirement Plan/401k/Pension

Before becoming an employment attorney I worked for one of the largest (maybe the largest) provider of 401k services. We provided various investment, customer service and recordkeeping services for 401k plans. Most people who call for information about their 401k plans will end up talking to my former employer or one of their competitors. Most

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Vanguard funds targeted in new 401k excessive fee litigation

Employment Benefits Law, Retirement Plan/401k/Pension

401k excessive fee litigation has been an active area of ERISA litigation for over a decade with 401k participants arguing the plan administrator–along with various other plan fiduciaries–breached the duty to prudently manage the investment options of the plan. Most of these cases argue the plan administrator failed to select investments with reasonable fees, particularly

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Employers struggling to win pension overpayment cases against retirees

Employee rights lawyer, Employment Benefits Law, Employment Litigation Attorneys

The late 2000s and early 2010s saw a growth in litigation over 401k fees by employee-side ERISA attorneys. These often attacked large employers and major plan recordkeepers who profit from the kickback scheme known as revenue sharing. We’re still not done with that wave of litigation but we’re seeing a similar rise in litigation for pension

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Unanimous SCOTUS decision in Tibble holds ERISA fiduciaries must continuously monitor 401k investment choices

Employment Benefits Law, Retirement Plan/401k/Pension

A flurry of 401k litigation arose in the 2000s over the manner in which 401k plan sponsors select the investment choices and how those choices relate to the fees charged to the plan for various plan services and investments. 401k plan sponsors have fiduciary obligations to operate the plan prudently. 401k litigation asserts breaches of these

Unanimous SCOTUS decision in Tibble holds ERISA fiduciaries must continuously monitor 401k investment choices Read More »

Dissecting fact and fiction from a recent report on retirement savings

1 Comment / Employment Benefits Law, Retirement Plan/401k/Pension

As somebody who spent a decade working in employee benefits and now practices employee benefits law, I have an understanding of the employee benefits industry. When I saw WFAA in Dallas covering a report about retirement savings I couldn’t pass up the opportunity to fact-check. Predictably, the piece mixes a little truth with a lot of

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It’s your pension. Who is your financial adviser helping?

Employment Benefits Law, Retirement Plan/401k/Pension

This week I fielded a question from a soon-to-be-retiree regarding her pension that I thought was worth sharing. Her employer offers a defined benefit pension plan, which she is fortunate enough to receive. Her employer’s pension plan offers the opportunity to receive benefits in the form of a single lump sum payment or various annuity

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DOL releases official guidance on ERISA and same sex marriage

Employment Benefits Law, Retirement Plan/401k/Pension

In a highly important move, the Department of Labor released guidance on how ERISA-governed employee benefit plans will treat same-sex marriages following the Supreme Court’s overruling of DOMA’s definition of marriage as limited to one man and one woman. ERISA-governed benefit plans include private employer benefit plans like 401k plans, defined benefit pensions and health

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Flexible Spending Accounts: Use It or Lose It

Employment Benefits Law

Flexible Spending Accounts, or FSAs, allow employees to make tax-advantaged contributions towards their health care costs for the year. The FSA is distinct from the employer’s ERISA-governed health insurance plan; but the two operate closely. The employer’s insurer may even administer the FSA. The employee, and possibly the employer as well, contributes each year which

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Should I be concerned about 401k fees?

1 Comment / Employment Benefits Law, Employment Litigation Attorneys, Retirement Plan/401k/Pension

401k fees have come into focus as one of many ways the financial services industry leeches money from the investors. That focus turned into litigation by participants against their plans (and plan service providers). Eventually the Department of Labor instituted fee disclosure rules that require plan service providers to break down fees charged to the

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Retirement Plan Participant Disclosures

Employment Benefits Law, Retirement Plan/401k/Pension

By now you received fee disclosure statements on your 401k, ESOP, 403(b) and profit sharing plans. These fee disclosure statements, known as 404a5 Participant Disclosures, ensure these retirement plans provide plan participants with a minimum amount of information about the fees charged by plan investments and fees paid by the plan (often from those investment fees)

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What is the difference between a 401k plan and a deferred compensation plan?

1 Comment / Employment Benefits Law, Retirement Plan/401k/Pension

Generally, both plan formats defer compensation because the employee has elected to defer taking cash in hand to obtain some additional benefit, such as deferring taxes on the money or investing on a tax deferred basis. Under more specific legal definitions, there is a distinction between how these different plans work. Today’s post will discuss

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ERISA Retirement Plan Participant Disclosures

Employment Benefits Law, Retirement Plan/401k/Pension

By now you received fee disclosure statements on your 401k, ESOP, 403(b) and profit sharing plans. These fee disclosure statements, known as 404a5 Participant Disclosures, ensure retirement plans provide participants with a minimum amount of information about the fees charged by plan investments and fees paid by the plan (often from those investment fees) to companies that

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Benefits of staying in your 401k after you leave an employer

Employment Benefits Law, Retirement Plan/401k/Pension

When employees leave employment, the common response is to want to sever ties and move on, especially if the employee left involuntarily or on bad terms. However, withdrawing or rolling over your 401k may not be the best decision in every case. There are important financial and legal considerations. Before making decisions about your 401k

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How are pensions calculated? Understanding the process

2 Comments / Employment Benefits Law, Retirement Plan/401k/Pension

Pensions are a type of retirement benefit offered by employers or the government that provide a regular income to individuals after they retire. However, the calculation of pension benefits is not always straightforward. In this article, we will explore how pensions are calculated, including the various factors that can impact the final amount. Unlike an

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What is an Summary Plan Description?

Employee rights lawyer, Employment Benefits Law, Employment Litigation Attorneys, Retirement Plan/401k/Pension

Are you aware of the Summary Plan Description (SPD)? If you are an employee or a plan participant in a retirement or health plan, you should be familiar with this document. An SPD provides important information about the benefits, rules, and procedures of a retirement or health plan. In this article, we will discuss what

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How secure are my pension payments?

1 Comment / Employee rights lawyer, Employment Benefits Law, Retirement Plan/401k/Pension

A common concern posed by pension participants is how secure those payments will be in the future. Given the economic turmoil in the past few years, it is certainly a worthwhile question. The good news is that the vast majority of retirement benefits are more secure than you might think. As a Dallas employment attorney experienced

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401k Plan Fees – What Are They and Do They Matter?

4 Comments / Employment Benefits Law, Retirement Plan/401k/Pension

Employers operate 401k plans at a cost. Like other labor expenses (hiring process, salary, vacation pay, etc.) employers have to pay for compliance with labor and employment laws. Benefit plans are somewhat unique. Under ERISA employers can shift the cost of plan administration from the plan sponsor to plan beneficiaries. 401k plan fees often are

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What is ERISA and why should employees care?

11 Comments / Employment Benefits Law, Retirement Plan/401k/Pension

ERISA, the Employee Retirement Income Security Act of 1974, is a federal regulatory regime that governs private employer retirement, health care benefits and certain other employee benefit plans. It is a massive web of legislation, Department of Labor regulations and IRS regulations. ERISA also borrows from and incorporates securities regulations on investments (such as in 401k plans). ERISA

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