The Rosenbaum Law Firm P.C. Blog

My latest article for JDSupra.com can be found here.

It seems like every week, there is another major lawsuit against a plan sponsor and one of their service providers.

Allegations of impropriety are just allegations until decided by a trier of fact of whether they are substantiated or not. Just because a plan sponsor and their service provider are being sued, doesn’t mean they did anything wrong.

ERISA litigators have to eat too and sometimes they pick cases that aren’t going to put food on the table. I’ve seen too many lawsuits against some big-time plan providers that I know will end up going nowhere because the service provider is alleged to have done something wrong and is being sued because the ERISA litigator is considering that service provider is a fiduciary. Alleging that a service provider is a fiduciary is one thing, proving that is a lot harder.

ERISA litigators like to go fishing and they like big fishes like Fidelity and Vanguard. Whether they catch them or not is a whole other story.

My latest article for JDSupra.com can be found here.

Under a deal, Paycor will refer small businesses and startups to Ubiquity Retirement + Savings for a flat fee retirement benefit solutions in a streamlined, turnkey fashion.

Ubiquity is a San Francisco-based financial technology company involved in flat-fee small business retirement plans that have helped more than 10,000 businesses contribute over $3 billion toward retirement savings.

Olin Corp has won their ERISA case brought against them in the U.S. District Court for the Eastern District of Missouri.

The plaintiffs in the case used the same allegations in numerous other lawsuits filed against employers for alleged fiduciary breaches in the operation of their defined contribution retirement plans, brought by their attorney, the law firm Capozzi Adler.

The plaintiffs alleged that Olin failed to adequately monitor and control the plan’s recordkeeping costs and failed to objectively and adequately review the plan’s investment portfolio with due care to ensure that each investment option was prudent, in terms of cost and performance. Olin moved for dismissal, arguing that the plaintiffs didn’t allege “meaningful benchmarks” against which to evaluate the defendant’s fiduciary process and did not allege facts supporting an inference that they had breached their fiduciary duties. The Court threw out the case.

The ruling by the Court also pointed out that courts throughout the country have routinely rejected the 2019 NEPC survey cited by plaintiffs as a sound basis for comparison because it lacks in detail.

When it comes to ERISA litigators, not everyone can be Jerry Schlicter. Saying a plan is expensive isn’t enough. True benchmarking and an indication of some fiduciary breach are needed in a complaint.

I believe that in this business, there isn’t a one size fits all. That deals with ERISA 3(38) advisors, new comparability, safe harbor, and anything where there is a choice. It also deals with how you interact with clients, no two clients are the same.

I always talk about how successful marketing and successful client retention is based on making a connection. We are in the connection business and some clients are harder to connect to than others. Some clients are more difficult, based on personalities, backgrounds, and everything else under the sun.

How we can succeed and understand that clients are like friends and families with varying degrees of personalities and adjust our approach to meet their needs.

I love Las Vegas and I haven’t gambled there in 20 years and I’ve been there a few times in that time span; I didn’t gamble a nickel. I hate gambling because I hate to lose. For me, getting up in the morning is a big enough gamble.

A lot of plan sponsors gamble when they refuse to self-correct a compliance error, trying to gamble that the statute of limitations will run out on the plan year’s Form 5500, so it won’t be audited by the government. When the cost of correction is dwarfed by any potential levy by the government, I think it’s a fool’s bet to gamble against an audit because if you’re the plan sponsor, you’re gambling your money, not the house’s.

Self-correction and voluntary compliance are the ways to go in correcting plan errors, gambling against an audit isn’t a way. Not only will refusing to fix an error get you fired by any reputable third-party administrator, but it also means you are at the mercy of an auditor when audited.

I always joke that I get rid of old grudges to make way for new ones. A few years back, an advisor asked about a well-known third-party administrator (TPA) for a plan that I serve as a fiduciary. This TPA has a very good reputation as is well known for a certain part of the 401(k) industry.

Being too honest to a fault, I told the advisor about my issues with the TPA, which results from a job offer that went awry a very long time ago. Let’s just say the job offer salary was well below what they advertised the ERISA attorney position for. When I asked about the flexible scheduling that they mentioned during my interviews, the job offer was yanked. In the end, I think things worked out better for me. It was a time in my life when my kids were much younger, the job would have been sort of a demotion at the time, and the travel (when gas was around $4 a gallon after Hurricane Katrina) would have been brutal.

The TPA looked like a great fit and I told the advisor because I wanted him to know the grudge I had and that the grudge would not be the reason I wouldn’t hire them. In the end, whatever you do, it has to be in the best interests of the plan participants. Get rid of grudges that might negatively impact your clients and plan participants, and make ways for new ones.

My latest JDSupra.com article can be found here.

My latest newsletter for retirement plan providers can be found here,