Latest news with #ERISA
Time Business News
4 days ago
- Business
- Time Business News
Fiduciary Breaches Could Quietly Undermine Retirement Accounts, Study Shows
A new analysis from J. Price McNamara spotlights how hidden fees and fiduciary missteps within employer-sponsored retirement plans can significantly erode long-term savings. Based on recent litigation trends and federal data, the study examines how fiduciary breaches under the Employee Retirement Income Security Act (ERISA) are becoming increasingly costly for millions of American workers. Plan administrators carry a legal duty under ERISA to act in the best interest of participants. This includes monitoring service providers, controlling fees, and maintaining fee transparency. When these responsibilities are ignored or poorly managed, participants may face steep losses over time. The financial impact can be substantial. Data cited in the study shows that even a one percent increase in retirement plan fees can reduce total savings by up to 28 percent over 35 years. That reduction could amount to tens or even hundreds of thousands of dollars for individual account holders. A chart from the Department of Labor illustrates how savings accumulate under different fee scenarios, assuming steady contributions and returns over time. Recordkeeping fees offer a clear example. While competitive rates hover around $35 per participant annually, some plans pay as much as $150 per person. These inflated charges suggest a failure to negotiate fair rates or to vet service agreements thoroughly. Investment choices also raise concern. Analysis of data from the Investment Company Institute indicates that 67 percent of retirement plans still use higher-cost retail-class mutual fund shares, despite the availability of lower-cost institutional alternatives. This decision, often overlooked, increases participant costs without improving performance. Benchmarking can help control these expenses. Administrators are expected to compare their plan's fees against similar offerings. Failure to do so may result in participants absorbing fee increases of up to 13 percent. When benchmarking is ignored, plans may drift further away from industry standards, placing additional strain on future retirement security. Litigation linked to excessive retirement plan fees has surged in recent years. According to statistics reviewed by J. Price McNamara, more than 200 class-action lawsuits have been filed since 2015. In 2020 alone, 90 suits targeted employers for fiduciary violations. Between 2017 and 2021, excessive fee litigation rose by over 50 percent. Notable settlements underscore the risks of noncompliance. In 2019, MIT agreed to pay $18.1 million to resolve claims of excessive fee practices. That same year, Johns Hopkins University settled for $14 million. These outcomes reflect growing legal and financial exposure for plan sponsors and fiduciaries who fail to maintain adequate oversight. Participants have legal options when fiduciary duties are breached. Administrators must regularly disclose all fees and adjust plan structures to keep costs competitive. If savings have been diminished due to excessive charges, individuals can pursue restitution through legal action. Successful claims not only help restore lost funds but often lead to improved management and oversight practices. The study concludes that recent regulatory changes have improved fee disclosure requirements, yet many plans still fall short. Inadequate governance, lack of transparency, and poor provider oversight continue to drive legal challenges. With litigation rates climbing, awareness of one's rights as a retirement plan participant has never been more important. J. Price McNamara's research emphasizes the need for proactive financial literacy and regulatory enforcement. Retirement security depends not only on contributions and returns but also on how well fiduciary responsibilities are upheld. TIME BUSINESS NEWS
Malaysian Reserve
5 days ago
- Business
- Malaysian Reserve
DATA BREACH ALERT: Edelson Lechtzin LLP Is Investigating Claims On Behalf Of Anne Arundel Dermatology Customers Whose Data May Have Been Compromised
NEWTOWN, Pa., July 18, 2025 /PRNewswire/ — The law firm of Edelson Lechtzin LLP is investigating data privacy claims regarding an incident at Anne Arundel Dermatology. Anne Arundel Dermatology learned of a data breach on or about February 6, 2025. If you would like to discuss this case with a lawyer, go HERE. About Anne Arundel Dermatology Anne Arundel Dermatology is a full-service dermatology practice that offers a comprehensive suite of cosmetic laser and skin care services, as well as dedicated in-house Mohs surgery and pathology laboratory services at over 60 locations in the Mid-Atlantic and Southeastern regions. What happened? On or about June 27, 2025, Anne Arundel Dermatology identified a data privacy breach within its computer network. The company initiated an investigation and determined that certain data Files were accessible to an unauthorized third party for a period between February 14, 2025, and May 13, 2025. The compromised data may include names, addresses, birth dates, medical information, and health insurance information. Over 1.9 million individuals have been affected by this data breach. How can I protect my personal data? If you receive a data breach notification concerning Anne Arundel Dermatology, you should take steps to protect yourself against identity theft and fraud by regularly reviewing your account statements and monitoring your credit reports for any suspicious or unauthorized activity. Edelson Lechtzin LLP is investigating a class action lawsuit to seek legal remedies for individuals whose sensitive personal data may have been compromised by the Anne Arundel Dermatology data breach. For more information, please contact: Marc H. Edelson, LECHTZIN LLP411 S. State Street, Suite N-300Newtown, PA 18940Phone: 844-696-7492 ext. 2Email: medelson@ About Edelson Lechtzin LLP Edelson Lechtzin LLP is a national class action law firm with offices in Pennsylvania and California. In addition to cases involving data breaches, our lawyers focus on class and collective litigation in cases alleging securities and investment fraud, violations of the federal antitrust laws, employee benefit plans under ERISA, wage theft, and consumer fraud. This press release may be considered Attorney Advertising in some jurisdictions.
Time Business News
15-07-2025
- Health
- Time Business News
Five Tips for Seamless ERISA Compliance
It can be quite scary navigating through complying with ERISA requirements, as you have to take care of deadlines, deal with a lot of documentation, interact with employees, make sure that they are aware of their rights, and feel threatened by the heavy fines that can be imposed on you. Here are some ways that you can make sure your company is following the rules and does not get stuck in any unwanted compliance issues. Many documents update employees on their rights and allow them to know what benefits they are getting, such as how the costs are being shared, the medical tests and procedures that the company will cover and the list of preventative services they will provide, and the list of new or existing drugs, amongst many other things. These documents are comprehensive, and participants have a right to know if there have been any changes made to them. So, as an employer, it is your right to update participants of changes made in a timely manner. These documents include the Summary Plan Description (SPD) that highlights the details of the benefits the employees will be receiving and whether they are eligible for them. The Summary of Benefits and Coverage (SBC) document covers all the health rights that the employees will be given. The HIPAA privacy notice informs employees about how their health information is being utilized. The Children's Health Insurance Program (CHIP) Notice explains how the company can aid your children. Employers also need to submit reports to the Department of Labor annually and on time. If they fail to do so, it will result in complications against the business as the DOL can penalize you for late submission of these documents. If you fail to provide any of these documents, the Department of Labor can charge you. It can charge $195 daily for failing to provide SPD, $145 daily for not providing CHIP, and $1443 in the case of a SPD, which is why ERISA compliance is essential. All these penalties can add up to a huge amount that will only affect your company negatively. Make yourself prepared for the audit by understanding the process fully and keeping all the documents in one place. You should also train your HR professionals for this and ensure that those in the benefits teams fully comprehend the importance of ERISA and what its compliance requires from the company. Also, work with your legal advisors and auditors to make sure that you have all the necessary documents and procedures in place. Here are the documents that you should keep prepared: 01k and employee benefits regulation: Family and Medical Leave Act (FMLA) compliance, Employee Retirement Income Security Act (ERISA) compliance, Employee timekeeping, Wage and hour compliance, Child labor law compliance, Wage deduction processes, and Accurate payroll and recordkeeping. Regularly update all the employees about any changes in the documents and inform them about the rights they have. If they are planning to invest, explain to them their choices fully and completely so that they can know the risks that come with their investments, as they have a right to know where their money is going and how it will be used. The process of compliance with ERISA may seem overwhelming and overburdening, but it does not have to be like that if you have a team that focuses on ensuring regulations by timely filing forms and telling employees about changes in documentation. Since it is not a one-time thing, but rather an ongoing process that you have to keep up with regularly, you will have to ensure that your compliance policy also evolves and adapts. TIME BUSINESS NEWS
Yahoo
14-07-2025
- Sport
- Yahoo
MLB Pension Fights Tom Browning's Widow Over Benefits
The MLB Players Benefit Plan and Pension Committee contend the Employee Retirement Income Security Act (ERISA) lawsuit brought by Dawn Dellapa, the widow of former Cincinnati Reds pitcher Tom Browning, should be dismissed. Dellapa contends she was wrongly denied surviving spouse benefits. The argument was contained in a brief filed on Monday in a Florida federal district court by Jim Brantley and other attorneys from Donnelly & Gross and Bredhoff & Kaiser on behalf of the benefit plan and pension committee. The plan and committee, which are separate entities from MLB and MLBPA, are operated by representatives from both MLB and MLBPA. Advertisement More from As Sportico detailed in April, Dellapa asserts she and Browning, a member of the Reds Hall of Fame, had a relationship that began in 1991 and are parents to a child born in 1995. However, they didn't marry until a couple of months before Browning died in 2022 at the age of 62. The short period between the couple entering into marriage and Browning's death became legally significant when Dellapa's petition for surviving spouse benefits was rejected. An eligibility rule indicates a spouse must be married for a continuous period of at least one year. Dellapa disputes this interpretation, emphasizing that the word 'may' precedes the one-year requirement. She also maintains there are alternative means of qualifying based on how the requirements are expressed in the policy. In addition, Dellapa says the plan causes age discrimination, since it is more protective of retired members who are in 'active' service, meaning managers, coaches, trainers and other ex-players who are employed by teams. Dellapa asserts retired members in active service are less likely to be old, 'due to the physical and mental limitations that accompany aging.' Advertisement Last month, William J. Schifino Jr. and other attorneys for Dellapa rebuked the plan and committee in a brief. They maintain the defendants 'disparage' the Dellapa-Browning relationship 'as a quick, seven-week-long marriage before his death.' The attorneys insist the couple's relationship lasted 'over 30 years, including a child.' In the brief filed on Monday, the benefit plan and pension committee try to rebut Dellapa's arguments. One line of attack is that ERISA affords substantial discretion to retirement plans in how they interpret policy language. ERISA requires only a 'reasonable' interpretation. This means even if a court disagrees with the plan's interpretation, the court must uphold the interpretation unless it was unreasonable. The plan and committee also contend that Dellapa's reading—that the word 'may' renders the one-year marriage requirement permissive rather than obligatory—doesn't prove the plan's interpretation was unreasonable. Likewise, they maintain that a logical reading of 'qualified spouse' would not 'render the one-year marriage requirement entirely superfluous' and that, instead, the 'most reasonable interpretation' of 'qualified spouse' includes the requirement. The defendants also reject Dellapa's insinuation of age discrimination as incompatible with ERISA. They write that her allegations not only wouldn't count as age discrimination under a separate law, the Age Discrimination in Employment Act, but they 'fail entirely under ERISA.' This is because any alleged discrimination 'flows directly from the Pension Plan's terms themselves, not from any discriminatory action taken by the Pension Committee.' Advertisement The defendants stress that Dellapa 'cannot cite a single case supporting the proposition' that pension plan terms 'allegedly causing a disparate impact between participant classes based on age can be transformed into discrimination based on ERISA rights.' U.S. District Judge Steven D. Merryday is presiding over Dellapa's case. Earlier this month, Merryday ordered the parties to appear before a mediator in hopes it will lead to a resolution. The docket also indicates that a jury trial would take place in November 2026 if the case doesn't end beforehand. Browning was a 20-game winner in 1985 and threw a perfect game against the Los Angeles Dodgers in 1988. He also led the Reds to a World Series victory over the Oakland A's in 1990. Browning retired six years later with a career record of 123-90 and a 3.94 ERA, along with 1,000 strikeouts in 1,921 innings pitched. Best of Advertisement Sign up for Sportico's Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.
CNN
12-07-2025
- Business
- CNN
Elizabeth Warren pushes back on plan to get private equity into 401(k)s
A typical 401(k) plan only offers stock and bond funds that invest in publicly traded companies. But private companies — traditionally the domain of institutional and high-net-worth investors — have become a significant part of the overall investing market. Do they belong as an option in workplace retirement plans, given that they are often more expensive and less transparent than publicly traded securities? It's a question that's been getting a lot of attention as the private investment industry and others seek to 'democratize' access to such investments. And it's an issue receiving pushback from some lawmakers and consumer advocates, including Sen. Elizabeth Warren, the top-ranking Democrat on the Senate Banking Committee. Most recently, Warren sent a letter and a series of questions to Empower, one of the largest workplace retirement plan recordkeepers, probing its recently announced decision to offer plan sponsors the choice of including private equity as an investment option for their employees. In its response to Warren earlier this week, Empower — which serves roughly 90,000 corporate, government and nonprofit employers — likened the desire to give people access to private markets to the creation of 401(k)s decades ago. 'The 401(k) democratized access to the public markets in unprecedented fashion and without it, many people would have no access to investing,' Empower CEO Ed Murphy wrote. 'Today, we are facing a similar moment.' Murphy, noting that there are far fewer publicly traded companies today than 30 years ago, cited the growth in capital going towards private companies and the estimated $13 trillion in assets in the global private equity market. 'This structural shift means fewer opportunities for everyday investors saving in defined contribution plans — especially those seeking exposure to innovative or fast-growing companies.' He also stressed that the new investment option it would offer would have guardrails. 'Private markets investing is not for everyone and Empower is not suggesting that it is. Empower is not advocating for unregulated or unmanaged access to complex asset classes. … It's a carefully monitored gateway.' Among the guardrails Murphy said would be in place: '(T)he investment manager advising to these investments in accordance with the participant's financial goals and risk tolerance, are selected by the plan sponsor and must be subject to ERISA's high standards and adhere to those standards.' More specifically, Empower told CNN in an email that only participants with managed accounts will have access. (A managed account is run by an investment professional who will, among other things, manage your investments within your workplace plan in keeping with your goals, risk tolerance and time horizon.) And, the company added, the private investments would only be a portion of a larger collective investment trust that a person could select. The other portions of the CIT would be in public securities. 'We believe that professionally managed solutions are the best way to offer private assets, as they offer an additional layer of analysis and fiduciary protection,' the company said. In her reply to Murphy's letter, released Saturday, Warren said she shares his stated goal of helping everyone, regardless of income or net worth, to ''build lasting financial security through well-designed, responsibly managed investment opportunities.'' But, she wrote, 'Your response did not meaningfully address how you would shield plan participants, and our financial system, from the structural risks inherent in private markets. Ultimately, you did not explain why providing retirees with the option to invest their hard-earned life-savings in risky, expensive private markets benefits anyone other than private funds.' Nor, Warren said, did the company offer 'details about your partnerships with private firms, your fees, and your incentive structures.' Warren ended her letter by asking Empower to address her specific questions by Friday, July 25, 2025. So … to be continued. In the meantime, the Office of the Investor Advocate at the Securities and Exchange Commission said that in fiscal year 2026 it plans to explore issues 'surrounding the inclusion of alternative investments, such as private equity and private credit, in retirement savings plans and their implications for retail investors.'
