The call for real ERISA Fiduciary Advisors

NEW YORK, NY, UNITED STATES, July 19, 2022 /EINPresswire.com/ -- The U.S. Supreme Court sided with employees at Northwestern University who sued the school over the allegedly excessive fees of their retirement plans.

This recent Supreme Court decision could result in a self imposed overhaul by Plan Sponsors to more acutely manage plan options, fees and investment selections. The court sided with Northwestern University employees who alleged the university’s retirement plans had excessively high fees and simply too many investment options. According to James Lukezic, Managing Director of Qualified Plans at Old Slip Capital Partners, too many investments is just the tip of the iceberg in terms of issues as it relates to any mismanaged Qualified Corporate plan. He goes on to state that the fee collection method being used to collect all plan fees and the quality (performance vs risk) of the mutual funds in the plans fund menu, and their respective shares classes are of most importance.

Plan sponsors are encouraged to take correction action when they identify a problem with the management of their qualified plan, whether it be an administration problem or an advisory problem. Mr. Lukezic states, unfortunately, many times he has advised Fiduciaries of Corporate qualified plans to enter The Voluntary Fiduciary Correction Program (VFCP) which encourages voluntary compliance by self-correcting violations of the law. The program also helps plan officials understand the law and gives immediate relief under a class exemption. It's not ideal, but for new C-Suite executives who inherit a mismanaged Qualified Plan, its sometimes the only option, states Lukezic.

The nation’s highest court vacated a previous U.S. Court of Appeals ruling in Hughes vs. Northwestern, remanding the case back to the appellate court for reconsideration. While the opinion doesn’t include a specific order or set of recommendations that will immediately reshape the retirement industry, the Supreme Court was clear: plan sponsors fail to fulfill their fiduciary duty when they do not monitor their investment offerings and eliminate retail shares classes when possible.

Whether you are a Plan Fiduciary at a corporation or a employee looking at the interworking of a qualified plan, its evident that having a sanctioned ERISA Fiduciary advisor vs a Commissioned Broker could make all of the difference; both from a liability perspective and retirement readiness perspective for employees of qualified plans nationwide.

SUPREME COURT OF THE UNITED STATES
HUGHES et al. v. NORTHWESTERN UNIVERSITY et al.

certiorari to the united states court of appeals for the seventh circuit
No. 19–1401. Argued December 6, 2021—Decided January 24, 2022

Charlie Johnson
Falconer, LLC
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