Comments on: Law Professor Amicus Brief Filed in 7th Circuit ERISA Case http://law.marquette.edu/facultyblog/2009/03/17/law-professor-amicus-brief-filed-in-7th-circuit-erisa-case/ Sun, 12 Feb 2012 17:44:22 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Nick Paleveda MBA J.D. LL.M http://law.marquette.edu/facultyblog/2009/03/17/law-professor-amicus-brief-filed-in-7th-circuit-erisa-case/comment-page-1/#comment-25847 Nick Paleveda MBA J.D. LL.M Tue, 08 Sep 2009 15:51:57 +0000 http://law.marquette.edu/facultyblog/?p=4259#comment-25847 Thanks Mike, the 7th Circuit did the right thing and dumped this case in the trash can. Many participants are unaware of the huge amount of rules and regulations that ERISA imposes on plan sponsors. The IRS in many cases is overzealous in imposing fines and penalties on plan sponsors making it almost a crime to save for retirement. The last thing we need is overzealous plaintiff's attorneys filing suits against plan sponsors. Has anyone on this blog actually administered a plan? Dealt with the DOL and IRS on a plan? Filed compliance reports such as 5500s, PBGC-1, Form 500, 501? Actually been involved in plan audits-fought against 6707A-(a huge unconstitutional statute?)-read it it reeks with tyranny-no judicial review????? Probably not. Instead if a participant has too few mutual fund choices it is a breach of fiduciary duty by the plan sponsor. If participants have too many options (there is already a case filed on this issue) it is a "breach of fiduciary duty". I think the fidcuary duty of plan sponsors should be simular to AAA arbitrators-which is basically none. ( If you have ever been in front of an AAA arbitrator, you will find out how corrupt they can be with no recourse for your client)-no real standards. Thanks Mike, the 7th Circuit did the right thing and dumped this case in the trash can. Many participants are unaware of the huge amount of rules and regulations that ERISA imposes on plan sponsors. The IRS in many cases is overzealous in imposing fines and penalties on plan sponsors making it almost a crime to save for retirement. The last thing we need is overzealous plaintiff’s attorneys filing suits against plan sponsors. Has anyone on this blog actually administered a plan? Dealt with the DOL and IRS on a plan? Filed compliance reports such as 5500s, PBGC-1, Form 500, 501? Actually been involved in plan audits-fought against 6707A-(a huge unconstitutional statute?)-read it it reeks with tyranny-no judicial review????? Probably not. Instead if a participant has too few mutual fund choices it is a breach of fiduciary duty by the plan sponsor. If participants have too many options (there is already a case filed on this issue) it is a “breach of fiduciary duty”. I think the fidcuary duty of plan sponsors should be simular to AAA arbitrators-which is basically none. ( If you have ever been in front of an AAA arbitrator, you will find out how corrupt they can be with no recourse for your client)-no real standards.

]]> By: Mike Sladky-retirement advisor http://law.marquette.edu/facultyblog/2009/03/17/law-professor-amicus-brief-filed-in-7th-circuit-erisa-case/comment-page-1/#comment-25838 Mike Sladky-retirement advisor Mon, 07 Sep 2009 17:48:39 +0000 http://law.marquette.edu/facultyblog/?p=4259#comment-25838 Dear Paul- How do you know that Deere & Co did not follow a prudent process when selecting the core investment options? There were 20 well diversified offerings--some with low fees as well----and there has been very little commentary from the ERISA pundits and the 404c specialists since the 7th Circuit refused a re-hearing. Dear Paul-

How do you know that Deere & Co did not follow a prudent process when selecting the core investment options? There were 20 well diversified offerings–some with low fees as well—-and there has been very little commentary from the ERISA pundits and the 404c specialists since the 7th Circuit refused a re-hearing.

]]> By: Nick Paleveda MBA J.D. LL.M http://law.marquette.edu/facultyblog/2009/03/17/law-professor-amicus-brief-filed-in-7th-circuit-erisa-case/comment-page-1/#comment-25255 Nick Paleveda MBA J.D. LL.M Mon, 20 Jul 2009 15:09:51 +0000 http://law.marquette.edu/facultyblog/?p=4259#comment-25255 I guess the 7th Circuit also did not "get it" as they declined a rehearing. I guess the 7th Circuit also did not “get it” as they declined a rehearing.

]]> By: Nick Paleveda MBA J.D. LL.M. http://law.marquette.edu/facultyblog/2009/03/17/law-professor-amicus-brief-filed-in-7th-circuit-erisa-case/comment-page-1/#comment-25182 Nick Paleveda MBA J.D. LL.M. Fri, 17 Jul 2009 23:53:31 +0000 http://law.marquette.edu/facultyblog/?p=4259#comment-25182 I am also curious about the signers of the amici, how many have actually talked to plan sponsors-and how many have they actually talked to sponsors about these plans. I personally have had discussions with over 1,000 plan sponsors and 1500+ plan participants-a different viewpoint from these plan sponsors many who struggle to provide health and retirement benfits to their employees in a down economy. In most cases, the employees go home at 5-employers in many cases will not have that luxury. Yes, they may make more money, but what do you expect in an 80 hour work week-as opposed to 40.... I am also curious about the signers of the amici, how many have actually talked to plan sponsors-and how many have they actually talked to sponsors about these plans. I personally have had discussions with over 1,000 plan sponsors and 1500+ plan participants-a different viewpoint from these plan sponsors many who struggle to provide health and retirement benfits to their employees in a down economy. In most cases, the employees go home at 5-employers in many cases will not have that luxury. Yes, they may make more money, but what do you expect in an 80 hour work week-as opposed to 40….

]]> By: Nick Paleveda MBA J.D. LL.M. http://law.marquette.edu/facultyblog/2009/03/17/law-professor-amicus-brief-filed-in-7th-circuit-erisa-case/comment-page-1/#comment-25181 Nick Paleveda MBA J.D. LL.M. Fri, 17 Jul 2009 23:46:38 +0000 http://law.marquette.edu/facultyblog/?p=4259#comment-25181 Paul, sorry I don't get it-why should a plan sponsor be liable as an "investment guru" for their employees. Frankly, many employers would say forget the 401(k)-which they should do so anyway as it is a tax inefficient investment with a 15.3% load in most cases. If you add on their "deemed fidicuairy duty". I think a decision by the court to hold sponsors liable should be an indication to business owners to terminate what is an inefficient oversold plan to begin with for the company.-the "load" is of course SS and Medicare taxes-which in a Db or PS plan is avoided. Paul, sorry I don’t get it-why should a plan sponsor be liable as an “investment guru” for their employees. Frankly, many employers would say forget the 401(k)-which they should do so anyway as it is a tax inefficient investment with a 15.3% load in most cases. If you add on their “deemed fidicuairy duty”. I think a decision by the court to hold sponsors liable should be an indication to business owners to terminate what is an inefficient oversold plan to begin with for the company.-the “load” is of course SS and Medicare taxes-which in a Db or PS plan is avoided.

]]> By: Paul M. Secunda http://law.marquette.edu/facultyblog/2009/03/17/law-professor-amicus-brief-filed-in-7th-circuit-erisa-case/comment-page-1/#comment-13676 Paul M. Secunda Wed, 18 Mar 2009 19:41:45 +0000 http://law.marquette.edu/facultyblog/?p=4259#comment-13676 Nick: The abuse was not following their fiduciary duties to make sure the investment options for the 401(k) plan were prudent and appropriate for the purposes of providing retirement benefits for employee/participants. The issue here was not the range of investment mutual funds fees per se (there was a broad range), as there was no filtering done at all - some 2500 funds were available without any indication that the company and its administrator went through these funds with its fiduciary obligations to the employees in mind. The process is what's important under ERISA fiduciary law. Nick:

The abuse was not following their fiduciary duties to make sure the investment options for the 401(k) plan were prudent and appropriate for the purposes of providing retirement benefits for employee/participants. The issue here was not the range of investment mutual funds fees per se (there was a broad range), as there was no filtering done at all – some 2500 funds were available without any indication that the company and its administrator went through these funds with its fiduciary obligations to the employees in mind. The process is what’s important under ERISA fiduciary law.

]]> By: Nick Paleveda http://law.marquette.edu/facultyblog/2009/03/17/law-professor-amicus-brief-filed-in-7th-circuit-erisa-case/comment-page-1/#comment-13673 Nick Paleveda Wed, 18 Mar 2009 18:57:10 +0000 http://law.marquette.edu/facultyblog/?p=4259#comment-13673 I read the AC Brief but the brief was not specific as to "what the abuse was exactly". I heard "fees are bad". What fees? How much?-how did they differ from the market? What was the standard deviation from the market? Did the MF company charge 20% of the profits plus 2% of AUM like hedge funds? Nick Paleveda MBA J.D. LL.M I read the AC Brief but the brief was not specific as to “what the abuse was exactly”. I heard “fees are bad”. What fees? How much?-how did they differ from the market? What was the standard deviation from the market? Did the MF company charge 20% of the profits plus 2% of AUM like hedge funds?

Nick Paleveda MBA J.D. LL.M

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