A quarterly publication of Fiducia Group, LLC CONFERO ...fiduciaretirement.com/upload/ConferoIssue20.pdf · Online/Digital Operations Jacob Button [email protected]

CONFEROA quarterly publication of Fiducia Group, LLC

Editor ’s Letter | The Roland Roundup | Partner Spotlightalso inside

ISSUE NO. 20

IndIvIdual Investors and tax ManageMent

evolution of the Plan sponsor

Changes and Challenges In Plan audItIng

the lake Wobegon effeCt

erIsa lItIgatIon

Articles

Managing employee benefits

A vAriety of topics discussing Change In retirement

Confero | 1Fall 2017

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Max P. KesselringEditor-in-Chief

onfero has been in publication for five years now. This marks

the 20th issue of the magazine! Over the years, we have addressed

everything from plan errors to automatic features. Our goal has always been to address the topics that matter most to plan sponsors.

In this issue, we are focusing on how the financial and retirement landscape has changed over the last several years since we first started this publication. There are new policies, laws, investment strategies, etc., that have changed how we all look at retirement. In Confero Fall 2017, we address some of the topics that have had the greatest impact on retirement.

We have gathered some new and old faces to contribute to this issue. They are all thought leaders in the retirement community and have done an amazing job sharing their vast knowledge with us on a variety of topics. The topics discussed include the evolution of the plan sponsor, ERISA litigation, employee benefits, indexing target-date funds, plan auditing, and individual investments and tax management.

We thank all of those who have contributed to the magazine over the years and have made it what it is today. Confero has grown so much over the years; it is now a publication that goes out to over 1,500 people. We could not do it without our amazing contributors. We appreciate the high-caliber content that you provide to make it a great example of collaboration.

We hope you enjoy the 20th issue of Confero. We hope that we have brought you some new insight on how the retirement landscape has changed and where we think it might eventually go. We at Fiducia Group thank you for being a reader of Confero, and we hope to continue giving you the best and most relevant content.

Publisher Fiducia Group, LLC

Editor-in-ChiefMax Kesselring

[email protected]

Editorial StaffRoland Salmi

[email protected]

Sheila [email protected]

Creative DirectorMax Kesselring

[email protected]

Staff ContributorsMax Kesselring, Gabriel Potter, Roland Salmi

Featured ContributorsMichelle Capezza, Alan Hahn, William

Szanzer, Brian J. Scott, Courtney S. Schenkel, David N. Levine

Online/Digital Operations

Jacob [email protected]

For a copy of the magazine, please email info@fiduciaretirement or

call 412-540-2300.

The information contained in this magazine is for general information purposes only. The information is provided by Fiducia Group, LLC (FG) and, while every effort is made to provide information that is both current and correct, FG makes no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the magazine or the information, products, services, or related graphics contained within the magazine for any purpose. Any reliance you place on such information is therefore strictly at your own risk.

In no event will FG be liable for any loss or damage, including, without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this magazine.

Please note that the articles included in this publication are general information and are not intended as legal advice, nor should you consider them as such.

C

2 | Fall 2017 Confero | 3

In This Issue...Editor’s LEttEr • Max KESSELRing

FEaturEd CoNtributors

thE EvoLutioN oF thE PLaN sPoNsor: Past, PrEsENt, FuturE • DaviD N. LeviNe

Erisa LitigatioN: a Look arouNd thE bENd • AlAn HAHn & WIllIAm B. szAnzer

MaNagiNg EMPLoyEE bENEFits iN thE FaCE oF tEChNoLogiCaL ChaNgE • mIcHelle cApezzA

ChaNgEs, ChaLLENgEs (aNd MorE ChaLLENgEs) iN PLaN auditiNg • courtney s. scHenkel

MEEt FiduCia grouP, LLC pIttsBurgH, pA

PartNEr sPotLight • J iM bartoszEwiCz FIducIA group, llc

thE roLaNd rouNduP • rolAnd sAlmI

thE LakE wobEgoN EFFECt aNd iNdExiNg iN targEt-datE FuNds • BrIAn J. scott

iNdividuaL iNvEstors aNd tax MaNagEMENt • gABrIel potter

thaNk you, CoNtributors

We hope you enjoy!

Confero | 54 | Fall 2017

Fe a t u r e d Contributors

david N. LevineGroom Law Group

Courtney s. schenkelEFPR Group, LLP

gabriel PotterWestminster Consulting, LLC

Michelle CapezzaEpstein Becker Green PC

Confero | 5

alan hahnDavis & Gilbert LLP.

brian J. scottVanguard Group

Alan Hahn is a partner in and co-chairs the Benefits & Compensation Practice Group of Davis & Gilbert LLP. His practice is devoted to advising clients in the design and implementation of creative, unique and tax-effective employee benefit plans and programs.

Gabriel Potter is a Senior Investment Research Analyst at Westminster Consulting, LLC, where he is responsible for designing strategic asset allocations and conducts proprietary market research.

Prior to joining Westminster, Gabriel worked as an Institutional Consulting Analyst with Graystone Consulting – the institutional business unit of Morgan Stanley Smith Barney.

Gabriel earned his MBA with concentrations in corporate finance and computers and information systems from the University of Rochester’s William E. Simon School of Business and his Bachelor of Arts degree in economics and a certificate of business management from the University of Rochester. He currently holds a Series 66 license from the NASD and an Accredited Investment Fiduciary Analyst designation (AIFA®) from the Center of Fiduciary Studies.

Michelle Capezza is a Member of Epstein Becker Green in the Employee Benefits and Health Care and Life Sciences practices, and co-leads the Technology, Media, and Telecommunications service team (Visit the blog at www.technologyemploymentlaw.com.). She practices law in the areas of ERISA, employee benefits, and executive compensation and provides counsel on qualified retirement plans, ERISA fiduciary responsibilities, nonqualified deferred compensation arrangements, employee welfare benefit plans, equity/incentive programs, and benefits issues in corporate transactions across various industries, including financial services, health care, technology, media, telecommunications, hospitality, and retail. Michelle was recommended for her work in employee benefits and executive compensation on a national level in The Legal 500 United States (2013, 2014 and 2016, 2017), selected to the New York Metro Super Lawyers (2014-2017), and New York Top Women Lists (2014-2016) in the area of employee benefits.

David N. Levine advises plan sponsors, advisors, and other service providers on a wide range of employee benefits matters, from retirement and executive compensation to health and welfare plan matters.

Mr. Levine’s areas of service include: the redesign of complex pension, defined contribution, and executive plans arising out of merger and acquisition activities; ongoing, day-to-day counseling of companies with respect to retirement and executive plan issues; in-depth compliance reviews of corporate qualified and non-qualified retirement plans; guidance on retirement plan issues relating to the Age Discrimination in Employment Act; design, implementation, and maintenance of governmental and tax-exempt organization retirement and welfare benefit programs; and representation of tax-exempt organizations with respect to issues involving corporate governance, executive compensation, and unrelated business income tax liability.

Brian J. Scott, CFA, is a senior investment strategist in Vanguard Investment Strategy Group. He is a member of the group responsible for capital markets research, the asset allocations used in Vanguard’s fund-of-fund solutions, such as Target Retirement Funds, as well as maintaining and enhancing the investment methodology used for advice-based relationships with high-net-worth and institutional clients. Previously, Mr. Scott served as a senior investment analyst in Vanguard Portfolio Review Department, where he was responsible for engaging with the institutional and advisory clients of Vanguard funds and contributed to the oversight of the managers of the funds. Mr. Scott has more than 20 years of experience in the investment management industry and holds the Chartered Financial Analyst® certification. Mr. Scott earned a bachelor’s degree from Boston College and an M.B.A. from The Pennsylvania State University.

Courtney S. Schenkel, CPA, a Director at EFPR Group, LLP, is recognized for her involvement in the firm’s attest department as the employee benefit service line leader and member of the commercial service team. In these roles, she is responsible for the completion and technical review of the firm’s defined benefit, defined contribution, health and welfare, and ESOP plan audit engagements. With over 11 years of experience, Courtney manages the planning and performance of these engagements by identifying and resolving technical issues and ensuring engagement quality.

Courtney received her Bachelor of Science degree in accounting from the State University of New York at Geneseo and earned her license as a Certified Public Accountant (CPA) in New York. She is member of the American Institute of Certified Public Accountants (AICPA).

william b. szanzerDavis & Gilbert LLP.

William B. Szanzer is an associate in the Benefits & Compensation Practice Group of Davis & Gilbert, LLP. His practice focuses on employee benefit and executive compensation matters for public and private companies. He has experience advising clients on nonqualified deferred compensation plans and employment and separation agreements, as well as equity compensation plans, including stock options, performance-based awards, and restricted stock and cash awards, and other equity-based incentive plans. In addition, he advises clients on benefits-related issues in connection with a broad range of corporate transactions.

6 | Fall 2017 Confero | 7note: The articles included in this publication are general information and are not intended as legal advice, nor should you consider them as such. You should not act upon this information without seeking professional consent.

ChangeThe

inRetirement


June 29, 2017

Barrett v. Pioneer natural Resources Usa, inc.Pioneer faces an ERISA lawsuit from its employees over its 401(k) plan. Pioneer, with 401(k) plan assets exceeding $500 million, caused the participants to pay excessive fees by failing to offer available, low-cost share classes of mutual funds as plan investment options. The lawsuit also targets the record-keeping fees paid to Vanguard, which increased 106%, from $141,924 to $291,794. (Pending Resolution.)

Castro-Pagan, Carmen. “Pioneer Natural Resources Sued Over 401(k) Fees.” Bloomberg BNA, The Bureau of National Affairs, 29 June 2017, www.bna.com/pioneer-natural-resources-n73014461018/.

July 12, 2017

Velazquez v. MFs Retirement investment CommitteeA participant in the Massachusetts Financial Services Company (MFS) Defined Contribution and MFS Savings Retirement Plan has filed a lawsuit under ERISA, alleging MFS, its retirement committee and retirement investment committee breached their fiduciary duties and engaged in prohibited transactions with respect to the plans in violation of ERISA. According to the complaint, the defendants loaded the plans primarily with MFS’s investment offerings, without investigating whether plan participants would better served by investments managed by unaffiliated

companies. The lawsuit contends the retention of the proprietary mutual funds has cost plan participants millions of dollars in excess fees. As an example, in 2012 the plan’s total expenses were approximately 91% higher than the median total cost for retirement plans with between $500 million and $1 billion in assets. (Pending Resolution.)

Moore, Rebecca. “ERISA Lawsuit Filed Against MFS.” Plan Adviser, Strategic Insight Inc., 12 July 2017, www.planadviser.com/ERISA-Lawsuit-Filed-Against-MFS/.

July 20, 2017

Catalfamo v. sears Holdings Corp.Sears Holdings Corp. kept its own stock as an investment option in the 401(k) plan although it knew or should have known that the retailer was in “extremely poor financial condition.” The plan’s stock fund lost $4.5 million in 2014 and $12.9 million in 2015, the lawsuit alleges. Sears and its fiduciaries took no action until December 2016, when they froze future purchases of the stock. This is the second time Sears must defend a class action accusing it of violating ERISA by retaining its declining stock in the company’s 401(k) plan. In 2007, Sears agreed to pay $14.5 million to settle a similar lawsuit. (Pending Resolution.)

Castro-Pagan, Carmen. “Sears Hit With 401(k) Class Action Over Company Stock.” Bloomberg BNA, The Bureau of National Affairs, 17 July 2017, www.bna.com/sears-hit-401k-n73014461855/.

august 18, 2017

osberg v. Foot locker, inc.The U.S. Court of Appeals for the Second Circuit and the U.S. District Court for the Southern District of New York both agree that Foot Locker did not adequately disclose to participants the possibility of “wear-away” during the transition to a cash balance approach. Judge Katherine B. Forrest has ordered Foot Locker to reform its cash balance plan to calculate accrued benefits in a way participants argued they were entitled to. Judge Forrest ruled the plan’s summary plan description, as well as other communications to participants, failed to inform them that their benefits would be subject to a period of “wear-away” during which new accruals would not increase the benefit to which a participant was already entitled. (Resolved – Reform Cash Balance Plan so the benefits will match those that would have been provided by the Defined Benefit Plan.)

Manganaro, John. “Appellate Court Weighs Foot Locker Cash Balance Disclosure Failures.” PLANSPONSOR, Strategic Insight Inc., 18 Aug. 2017, www.plansponsor.com/appellate-court-weighs-foot-locker-cash-balance-disclosure-failures/.

august 23, 2017

larson v. allina Health system et al.Filed in the U.S. District Court for the District of Minnesota, the allegations in this class action challenge concern 401(k) and 403(b) plans offered to Allina employees and cite ERISA sections 409 and 502. The complaint argues that the defendants “did not try to reduce the plans’ expenses or exercise appropriate judgment to scrutinize each investment option that was offered in the plans to ensure it was prudent. Instead, defendants abdicated their fiduciary oversight, allowing the plans’ trustee, Fidelity, to lard the plans with high-cost, non-Fidelity mutual funds through which Fidelity received millions of dollars in revenue-sharing payments.” (Pending Resolution.)

Manganaro, John. “ERISA Challenge Targets Minnesota Hospital System.” PLANSPONSOR, Strategic Insight Inc., 29 Aug. 2017, www.plansponsor.com/erisa-challenge-targets-minnesota-hospital-system/.

september 6, 2017

overall v. ascension HealthAscension has reached a settlement agreement with the Wheaton Franciscan System Retirement Plan in a case challenging the plan’s “church plan” status under ERISA.

Ascension has agreed to pay off the first $29.5 million of benefits that are distributable to settlement class members in the event trust assets attributable to the plan become insufficient to pay such benefits. According to the settlement agreement, should a corporate transaction occur where plan assets and liabilities covering settlement class members transfer a successor, Ascension Health shall cause the successor to honor Ascension Health’s commitments under the Plan Benefit Guarantee. Any of the releasees, in their sole discretion, may satisfy Ascension Health’s obligation under the Plan Benefit Guarantee, at any time after the effective date of the settlement, by making contributions to the plan trust that in the aggregate total $25 million. (Resolved.)

Moore, Rebecca. “Ascension Agrees to Settle Acquired Entity’s Church Plan Suit.” PlanAdviser, Strategic Insight Inc., 6 Sept. 2017, www.planadviser.com/Ascension-Agrees-to-Settle-Acquired-Entitys-Church-Plan-Suit/.

september 20, 2017

Hay v. Gucci America, Inc., Benefit Plans CommitteeA plaintiff in the Gucci America, Inc., Retirement and Savings Plan is accusing the plan sponsor and its benefits committee of breaching fiduciary duties, as well as other violations of ERISA. The defendants are accused of charging excessive administrative and investment fees to plan participants. The plaintiff claims the defendants failed to “fully disclose to participants the expenses and risks of the Plan’s investment options; breached their fiduciary duties under ERISA by allowing unreasonable expenses to be charged to participant for administration of the Plan; and breached their fiduciary duties under ERISA by selecting and retaining opaque, high-cost, and poor-performing investments instead of other available and more prudent alternative investments.” The complaint alleges that Gucci America failed to monitor plan investments to ensure they “provided adequate available returns” or were not excessively priced, “as were the majority of investments in the plan.” (Pending Resolution.)

Simon, Javier. “Gucci Retirement Plan Sued for Charging Excessive Fees.” PLANSPONSOR, Strategic Insight Inc., 20 Sept. 2017, www.plansponsor.com/gucci-retirement-plan-sued-charging-excessive-fees/.

The RolandRoundup.

he Roland Roundup is a compilation of court cases that have recently been in the news. Each

case focuses on a violation of ERISA guidelines. The outcomes of these cases may have a lasting impact on the fiduciary environment.

Confero | 9

Roland salmi, MBaWestminster Consulting, llC

Roland is an Associate Analyst at Westminster Consulting, where he executes performance analysis, client projects and investment support for senior consultants. He brings research knowledge, industry trends and a commitment to client success to the Westminster team.

Prior to joining Westminster Consulting, Roland worked as a financial advisor at Morgan Stanley Wealth Management and as a staff accountant at St. Bonaventure University. He received an Associate of Science degree in business administration and a Bachelor of Science degree in psychology from Elmira College. He then received his MBA from St. Bonaventure University. Roland has earned his Series 7 and 66 licenses.

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10 | Fall 2017 Confero | 11Confero | 11

ll that is old becomes new again. It is an old

adage that applies just as equally in the world

of retirement plans. In the 1950s, if you had a retirement

plan, most likely it was a defined benefit plan that provided lifetime income to participants that was funded by an insurance contract. In the 1990s and early 2000s, lifetime income was rapidly replaced, often due to decisions by plan sponsors, with lump sum payouts from 401(k) plans. In 2017, lifetime income is now a hot topic again.

Lifetime income is but one example of this circular evolution in the retirement plan world. Other examples of changes that have come full circle include the following:

• Bundling and Unbundling. For a long time, plan sponsors, from the largest of the large to small companies purchased an all in “bundled” 401(k) product. During the past two decades plan sponsors have increasingly moved from bundled solutions to having multiple products and advisors – such as investment consultants, recordkeepers, managed account providers, etc. However, in some parts of the retirement world, there is now a move, in part triggered by the Department of Labor’s “new” fiduciary rule, to bundled solutions.

• Collectivized Investments. Before the rise of mutual funds as the dominant investment in 401(k) plans, many 401(k) plans invested in group annuity contracts that had collectivized money management structures. Now, many 401(k) plans are turning back to collective investment trusts and other vehicles.

• Outsourcing. For decades, if you were to have asked a plan sponsor “who runs your plan”, the answer would have been “my

vendor X”. With the rise of more in depth Department of Labor investigations and active plaintiffs lawyers, many plan sponsors (and their fiduciaries specifically) began to take a more active role in plan administration. Recently, with the lawsuit and enforcement risk, some plan sponsors have been looking again at outsourcing professional management.

So where does the plan sponsor (or plan fiduciary if different than the plan sponsor itself) head from here? A starting point is that there is no one “right” direction to go in. A plan sponsor could be well served to be both open minded – but skeptical at the same time. As in most industries, there are innovations on a daily basis. The key for many plan sponsors if dividing what is a good use of resources for them and their employees (and plan participants) and what may not be worth the investment.

Some may feel comfortable making many or all of these decisions without outside advice while others may look to lean on outside trusted advisors like their consultants, attorneys, or accountants.

As we look forward to the next several years, the options and other solutions made available to plan sponsors are likely to multiply. Some considerations plan sponsors might consider include the following:

• What Does It Do For Me? Under ERISA, a plan fiduciary’s duty is to act for the exclusive benefit of plan participants and their beneficiaries and paying the reasonable expenses

of administering a plan. However, it is not necessarily inconsistent with ERISA for a plan sponsor to evaluate solutions that could lower administrative burdens and provide potentially higher quality services or advice. The key is understanding and documenting the expectation of true value. For example, if a new investment advice service is offered, what evidence can a plan sponsor document to show the plan sponsor expects it to be effective?

• Who Makes Money Off It? Retirement plans are a big, large dollar value industry. What interests or relationships underlie the product? Is it okay that the person selling it might have a relationship with another one of your vendors? Yes, but understanding those relationships is often key.

• Later, Does It Do What It Promised? Selecting a service or product can be an effort in itself, but retirement plan services are not subject to a “set it and forget it” standard. If a plan sponsor chose a service or product, does the rationale – its improved savings outcomes, its expected return, its plan utilization increase – actually hold up? A plan sponsor will always need to revisit its decisions.

Like many aspects of a business, retirement plans are constant evolving. In many cases, ERISA does not dictate one “right” answer but instead just asks for a process. For those who have worked with retirement plans for a long time, the future will evoke memories of the past.

David N. Levine is a Principal at Groom Law Group.

He can be reached at [email protected] or 202-861-5436.

Past, Present, Future

The Evolution of the Plan Sponsor:

By David N. Levine

A

{}“ “Like many aspects of a business, retirement plans are constant

evolving.


mployee benefit plan sponsors are adept at keeping one eye on the present and another on the future. This may be because decisions relating to employee benefit plans often take many months of advance planning to implement. As a result, predicting

the future, and the change that it can bring, is a necessary part of being a good employee benefits professional and plan fiduciary. Among the changes that plan fiduciaries must consider as they manage their plans are those that affect the workforce, changes in investment markets and regulatory changes. Often overlooked, however, is keeping a trained eye on trends affecting employee benefit plan

litigation. For instance, in regard to retirement

plans, plan fiduciaries may be under the impression that

litigation has primarily taken the form of excessive fees and stock drop litigation, and plan sponsors have been able, in many cases, to defend such lawsuits. While this may be true to some extent, plan fiduciaries should have a clear sense of what recent case law has shown to be the latest plaintiffs’ theories of liability and the best ways to defend a benefit plan lawsuit. Additionally, plan sponsors need to understand what areas of plan management are ripe for employee benefits litigation in the future. Employee benefits litigation has always been a factor to consider as long as employee benefit plans have been in existence, but the risk of litigation for every plan sponsor has never been higher.

Part of the reason plan fiduciaries may not be completely ready for a litigation involving their plans is that many plan committees have developed protocols for handling a change in legislation or regulation that impacts their plans—for example, their quarterly benefit committee meetings provide a forum for reviewing changes in law, and upon hearing the announcement from the governmental or regulatory authority about the upcoming change, they then adopt the necessary amendments and operational changes to be in compliance with the new guidance. The announcement acts as a call to action for

the plan sponsor and sometimes even includes the exact steps required for the plan sponsors to take to be compliant. This means that the plan sponsor is alerted that it must take certain steps to be compliant with the latest change and they will know to engage counsel to provide assistance.

By contrast, many plan fiduciaries find it much more difficult to keep up with the ever-changing world of employee benefits litigation. Many times there is no call to action until the plan sponsor is already named a defendant. The disputes can come from different sources, i.e., from employees regarding their benefits or from vendors and third-party administrators regarding a contract dispute. The uncertainty of when and who may bring a lawsuit makes it difficult for plan sponsors to stay ahead of employee benefits litigation trends. Because employee benefits litigation is increasing, it is essential for a plan sponsor to assess its plans for the risk of becoming involved in a dispute. Allocating a portion of every committee meeting to the topic of employee benefits litigation may be a good way to spark an idea or provide for a change in practice that could, one day, save you from liability in the future.

In order to help alleviate the risk of litigation, plan fiduciaries should consider the latest trends in employee benefits litigation, including the following items, when evaluating their plans:

ERISA Litigation: A Look Around the BendBy Alan Hahn and William B. Szanzer

E

Understand you may be a target. In the retirement plan space, the long bull market has ensured that retirement plan assets have never been larger. Additionally, thanks to the widespread practice of auto-enrollment (and auto increase), there are more people in more plans with larger account balances per participant than ever before. If your plan has grown and you have not taken steps to upgrade your fiduciary and operational compliance, your plan may be at risk of a lawsuit. At the same time, plaintiffs’ lawyers have expanded their focus on bringing lawsuits against smaller and midsize plans, including by bringing claims that were previously only common to plans of larger size. Additionally, as plans have grown, mistakes in plan administration can result in significant penalties should the IRS or DOL identify these issues on audit, especially if the IRS takes into account the size of a plan in assessing penalties. While there are market forces at work compressing investment management and recordkeeping fees, plan sponsors may be paying more than they have to, exposing them to litigation risk.

New theories of liability. Plaintiffs’ lawyers and IRS auditors have sharpened their focus on new theories of liability. One theory of liability looks at changes in plan administration as an indication that there may have been problems earlier. Other areas to keep an eye on include (i) litigation involving target-date funds; (ii) theories of liability based on inartfully crafted employee communication materials (which need to be reviewed before distributed to reduce the chances of a future dispute); (iii) the payment of plan expenses from plan assets; and (iv) conflicts of interest involving service providers. In addition to these theories of liability, prudent plan sponsors should be reviewing whether the new DOL fiduciary rule makes things riskier for their plans.

Vendors may be adversarial to you in a lawsuit. Your third-party administrator is charged with handling important tasks for you. As a result, it is important to make sure that your service agreements with your vendors have been appropriately negotiated, and not just for an appropriate level of fees. Too often, plan sponsors with long-standing vendor relationships fail to revisit their service-agreement language and simply roll over from year to year with an updated fee agreement at best. This is particularly true in regard to health plans, but can be the case with retirement plans as well. All agreements should be reviewed prior to their renewal to make sure they accurately reflect the plan sponsor’s current needs and expectations. Consider reporting your plan’s indemnification rights against your service providers to your fiduciary committee so they are in the know before a lawsuit is brought, and upgrade those provisions as necessary.

Plan document requests. When a plan sponsor receives a request for plan documents from a participant exercising his ERISA rights, the plan sponsor should have a protocol in place to send the appropriate documents to the participant. These documents may include the official plan document and amendments, IRS Forms 5500, and summary plan description (SPD). Plan sponsors that do not have a protocol in place can easily find themselves sending plan documents well after the 30-days deadline, which may result in penalties (currently $110/day). We find, especially in regard to health plans, that third-party administrators and insurers expect their customers to handle document requests. Don’t get caught without an updated set of plan documents.

Compliance review. One of the best ways to avoid employee benefits litigation is to conduct a compliance review. From an operational perspective, many matters revolve around a plan sponsor not applying its retirement plan’s definition for compensation, eligibility, and service crediting correctly. These terms should be clearly defined in the plan document.

Beneficial clauses in your plan documents. Because of recent case law, many plan sponsors may want to include a venue-selection clause in plan documents to allow the plan sponsor to handle a matter in its home jurisdiction. Another helpful provision that may be included is a provision that limits how long participants have to bring a lawsuit. These provisions, and others, have been upheld by courts and can stop many matters from proceeding to litigation.

Insurance considerations. Any review of employee benefits litigation readiness must include a full review of your ERISA fiduciary liability insurance policy and bond (Note that these are two different things.) Are the limits and deductibles appropriate? Have there been corporate changes that should be taken into account? These questions and more should be addressed with your insurance broker.

Employee benefits litigation is a fast-moving, expanding area of concern for plan sponsors. Your ERISA lawyer can help you follow litigation trends and keep you a step ahead of the game. Plan sponsors should not wait to be named in a lawsuit before reviewing their plans for exposure to employee benefits litigation.

Alan Hahn is a partner in and co-chairs the Benefits & Compensation Practice Group of Davis & Gilbert LLP.He can be reached at [email protected] or 212-468-4832.

William B. Szanzer is an associate in the Benefits & Compensation Practice Group of Davis & Gilbert LLP.He can be reached at [email protected] or 212-468-4923.

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Michelle Capezza, Epstein Becker green PC

here are many employee benefits challenges facing employers today, from determining the scope and scale of traditional benefits programs to offer that will attract, motivate and retain multigenerational employees, to embracing new models for defining and providing benefits, while simultaneously managing costs. In the

midst of these challenges is the wave of technological change that is impacting all areas of the workplace, including human resources and benefits. In recent years, many new technological tools have emerged to aid in the administration of benefit plans, delivery of participation communications, as well as provide education and advice. These tools often require collection of sensitive data or allow employees to provide personal information in an interactive environment, such as:

• Benefits, HR and payroll software, and plan recordkeeping, systems

• Online and mobile applications for benefits enrollment and benefits selection assistance

• Social media tools and applications for benefits information and education

• Online investment allocation tools, robo advisors, financial platforms

• Telehealth and wellness programs

These and other advancements are a sign of the times. While they appeal to employees, reduce burdens on employers, and assist in driving down program costs, organizations must be mindful that cyberattacks on benefit plans and participant information have occurred and measures should be taken to protect against such data breaches.

The Advisory Council on Employee Welfare & Pension Benefit Plans (the “Council”) began studying the importance of addressing privacy and security issues with respect to employee benefit plan administration in 2011 and provided a final report to the Secretary of Labor in November 2016 regarding cybersecurity considerations for benefit plans. The Council has raised concerns regarding potential breaches of the technological systems used in benefits administration, including the theft and misuse of personally identifiable information (“PII”) and personal accounts. Organizations, and plan fiduciaries, should take the time to familiarize themselves with the issues in the Council’s studies and reports and develop a policy for protecting PII and assets, especially when implementing and/or expanding the use of existing technological tools in the benefits area. Addressing these issues now will provide a solid foundation upon which to add new technological tools as they arise.

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Managing Employee Benefits in the Face of Technological ChangeMichelle Capezza, Epstein Becker green PC

What types of issues should be addressed in a Benefits Tech Policy? • The Organization’s Parameters and Vetting Process

for Usage of Technological Tools Handling Sensitive Employee Data. When utilizing Benefits Tech tools which collect PII of employees using the tools, as well as personal health information (as applicable), extra steps should be taken to ensure protection of this information as it enters cyberspace. At the data level, consideration should be given to the kinds of data that will be collected, how it will be used and stored, encryption measures, and how any breach will be addressed and communicated, consistent with the organization’s cybersecurity policies. Organizations should also establish parameters regarding how to maintain an inventory of all data collected by the various sources and tools to determine how to monitor the security of the data on an ongoing basis. Further, tools which apply to different benefits programs may require vetting through different channels. For example, if a group health plan-related tool is being considered, use of the tool may need to be coordinated with HIPAA privacy and security policies. If it is a retirement investment advice tool, plan fiduciaries should not only prudently select, and monitor, the robo advisor as an investment adviser, but also undertake due diligence of its PII privacy and security measures.

• Standards for Service Providers and Tech Tools. A Benefits Tech Policy can define the organization’s protocols for review of any benefits technology service provider’s service agreements, and product information, with risk management, IT, legal, and procurement areas. It can define the types of questions to ask service providers prior to engagement or upon renewal, such as confirmation of their cybersecurity program and certifications, details regarding how they handle, encrypt and protect data, data breach notification procedures, provision of reports regarding their controls, their levels of insurance and scope of their assumption of liabilities. It can also establish rules for any IT and security review of service provider systems, including requests for penetration tests to detect security risks. The goal of this type of effort should serve to confirm that the service provider, as well as the tool itself, meets the organization’s cybersecurity risk management standards.

• Standards for Employees Establishing and Maintaining Use of the Benefits Tech Tools. Organizations should ensure that all personnel who have access to PII are properly trained in safeguarding it, including secure transmission of any data to third party service providers. Individuals should be designated to handle any benefits-related data breach response and have set procedures for reporting same through the appropriate channels of the organization. Organizations should take great care to ensure that internal personnel handling PII are also properly vetted and that measures are taken to protect against internal breach of PII security.

• Cybersecurity Insurance Requirements. Organizations are familiar with various types of insurance for their businesses including errors and omissions, criminal, and fiduciary liability insurance. Cybersecurity insurance has also emerged in recent years and can offer various types of coverage, including coverage that would allow a benefit plan to trigger coverage upon a breach for certain disaster recovery and response assistance. Organizations should assess their needs and gaps in existing coverage to ascertain how cybersecurity insurance can be obtained with appropriate levels of coverage which is specific to, and coordinated with any other policies to fit, their employee benefits needs.

• Plan Fiduciary Responsibility. Although the Council reports did not address whether cybersecurity is a fiduciary responsibility, plan fiduciaries should be mindful of their duties to carry out their responsibilities prudently and in the best interests of plan participants and beneficiaries. A Benefits Tech Policy which takes into account fiduciary responsibility, either separately or as part of one policy, can serve to outline the standards that plan fiduciaries should follow when handling participant data and/or delegating plan administration authority to individuals or third parties who will handle and transmit PII. It can also address any breach notification, participant communication and remediation measures. Further, it can set forth the organization’s policies for indemnifying the plan fiduciaries for their actions so long as they did not act with gross negligence or with willful misconduct.

This list of issues is not exhaustive; organizations should identify where they may have risks and develop a policy that works for them. In this Digital Age and time of unprecedented change, the time is now to examine and address existing platforms and tools being used, identify potential risks, and implement action steps to improve practices and procedures. Development of a Benefits Tech policy, which takes into consideration organizational risk management perspectives and requirements for doing business with vendors, as well as plan fiduciary concerns, will enable employers to face these challenges head-on, improve the employee experience and reduce potential liabilities.

Michelle Capezza is an employee benefits and executive compensation attorney and a Member of EpsteinBeckerGreen,

resident in their New York office.

She can be reached at [email protected] or 212-351-4774.

{}“ “The time is now to examine and address existing platforms and tools being used, identify potential risks, and implement

action steps to improve practices and procedures.

Confero | 21

you are a Vanguard investor, or have read almost any commentary from us in the past, you probably know we are big believers in index investing. Because of this, we encourage investors to use index funds for the core of their portfolio or for

their entire portfolio if they don’t have a strong conviction in an actively managed strategy.

The reason is fairly straightforward and explained in detail in a Vanguard research paper, The case for low-cost index-fund investing. My colleagues in the Investment Strategy Group recently released an updated edition of the paper here.

We are even stronger believers in the case for index fund investing when it comes to target-date funds. To understand why, it’s helpful to discuss what makes index investing so effective in general—a concept popularly called the Lake

Wobegon Effect after the town in a popular public radio show where “all the children are above average.”

This town is, of course, fictional. Everyone can’t be above average, not even children. In the same way, all mutual funds can’t be above average and outperform their benchmarks—especially after investment costs, taxes, and other fees are considered.

We regularly observe this theory in practice, as seen in the figure on the next page. Almost 58% of equity mutual funds underperformed their benchmarks in the 15-year period 2000 to 2015. The results for bond funds were even less impressive, with almost 73% failing to outperform. If we include funds that were closed or merged out of existence in these numbers, 60% to 80% of equity funds and over 80% of bond funds failed to outperform their benchmarks, depending on the category for each.

The Lake Wobegon Effectand indexing in target date fundsBy Brian J. Scott

i

If



The lake Wobegon effect and indexing in Target-date FundsBrian scott, MBa, Vanguard group

Sources: Vanguard calculations, using data from Morningstar, Inc. Displays the distribution of excess returns, net of fees, relative to their prospectus benchmark, for the 15-year period ending December 31, 2015. Results for other periods will differ. Past performance is no guarantee of future returns.

The distribution of equity fund performance

An examination of institutional share class mutual funds yielded better results for this period as the median equity fund in this category managed to generate 7 basis points (0.07%) of positive excess returns. That’s a relatively meager result when you consider the additional risks and due diligence involved. Further, this period is not consistent with other periods we examined, where, on average, even institutionally priced mutual funds tend to lag their benchmark’s performance by an amount roughly equal to their expense ratio.

The case for indexing becomes even more compelling in target-date funds when you consider the unique role that they play in defined contribution plans. Among Vanguard full-service recordkeeping clients as of the end of 2015, 41% have automatic enrollment features, where participants are directed into default investments by the

plan sponsor. Within these plans, 95% of plan sponsors have selected target-date funds as their default. These facts mean about 21% of the participants at Vanguard have been defaulted into a single target-date fund (either index- or active-based) through the autoenrollment process.

While there is certainly nothing wrong with this trend from a regulatory perspective, it raises some interesting investment-related questions for plan sponsors. Is it a good idea to select actively managed target-date funds when, on average, the added risk and higher cost of active management has resulted in lower returns? Is this concern even larger for plan sponsors that automatically

enroll participants in a single target-date fund when those participants have done little, if any, due diligence on the active manager?

The case for low-cost index fund investing is compelling, and we will continue to be a leading advocate for it in the industry. But we believe the argument for low-cost index fund investing is even more compelling for plan sponsors that use target-date funds as their qualified default investment alternative and automatically enroll participants in them. These participants are by definition unengaged in the investment selection process, and plan sponsors should carefully consider investment risks that, on average, have raised costs and lowered returns. Unlike the children of Lake Wobegon, all mutual funds can’t be above average. Plan sponsors should keep this in mind as they perform due diligence and select target-date funds for their plans.

Notes• All investing is subject to risk, including the possible

loss of the money you invest.• Investments in target-date funds are subject to the

risks of their underlying funds. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in a target-date fund is not guaranteed at any time, including on or after the target date.

{}“ “Unlike the children of Lake Wobegon, all

mutual funds can’t be above average.

Brian J. Scott is as senior investment analyst in Vanguard Investment Strategy Group.© The Vanguard Group, Inc., used with permission.


Author Name, Titles, Company

Changes, Challenges (and More Challenges)

in P lan AuditingBy Courtney S. Schenkel


Author Name, Titles, Company Article Title

Provisions Relating to the Financial Statements. Expected results of these modifications include harmonizing plan reporting requirements, modernizing financial information and improving compliance. As with most new auditing standards, there will be some compromises made before it becomes effective. Under the proposed guidance, the new report would include additional disclosures of the engagement partner, which could overemphasize the impact of one individual over the entire audit team, and disclosure of the audit firm’s peer review results, which could mislead users who are not familiar with these types of reports. Proposed Group Health Plan information included in Schedule J could result in additional plan sponsors, an estimated 2.1 million, being required to file a Form 5500. The proposed auditing standards will add additional expense to the audit process for the gathering of the newly required information, and specialists are concerned that plan administrators could pursue lower-cost, and lower-quality, providers or discontinue sponsorship of plans in their entirety.

As John F. Kennedy said, “Change is the law of life. And those who look only to the past or the present are certain to miss the future.” A new era of challenges lies ahead as technology advances. The possible loss of privacy in a cyberattack, like the most recent Equifax breach, has heightened the awareness of identity theft and security. It reminds us of how little control we have over

our own personal information and who has access to it. The Auditing Standards Board continues to keep the audit process current and modernized while allowing CPAs to produce a product that supports compliance with the DOL and while providing useful information for plan sponsors and administrators. The expanded use of technology in retirement plan reporting is still forthcoming, and regulators are committed to creating a

balance of rules to protect personal information, alongside feasibility of implementation. While information technology and security are not specifically tested by current auditing requirements, they will most certainly be considered and influenced by the events of tomorrow.

Courtney S. Schenkel is a Director in EFPR Group’s attest department.

She can be reached at [email protected] or 585-295-0567.

emember when there were nine planets in our solar

system? How about when blackberries and apples were only

fruit? Ten years ago, the first iPhone was released, the housing bubble burst,

and the Chicago Bears lost in the Super Bowl to the Indianapolis Colts. How times have changed! Advancements in technology have enhanced the way we do business, communicate, and even how long we live. As life expectancy increases, and people spend more time in retirement, a new challenge has been created. The ability to rely on a fully funded pension for a happy retirement has faded into the past, and employer-sponsored retirement plans have fallen under increased regulation and compliance requirements. Changes in technology frequently impact filing and audit requirements of benefit plans. Even the results of the most recent Equifax breach, which are still relatively unknown, will have an impact.

Pensions were at one time a cornerstone for American workers. They were relied upon to provide guaranteed and reliable payments during retirement. The responsibility for the success of these plans was placed solely in the hands of employers and their plan fiduciaries. As the availability in pension plans declined, participants increased their enrollment in employer-sponsored contribution plans. These plans allow participants to take a more active role in their retirement, with the guidance and assistance of a plan sponsor and administrators. Plan administrators, or those charged with governance of the plan, hold a fiduciary duty to the active management of all plan types. Primarily, the responsibility of those charged with governance is to run the plan in the best interest of its participants and beneficiaries, including diversifying the investment options, monitoring fees,

and protecting personally identifiable information such as Social Security numbers. To address the public’s concern that retirement plans were being mismanaged and abused, provisions of Title I of ERISA were enacted in 1974. Administered by the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA), Title I contained rules for reporting and disclosure, vesting, prohibited transactions, participation, funding, fiduciary responsibility and civil enforcement. As benefit plans were established as regulated entities, special audit requirements under ERISA were also developed to help monitor their compliance.

One of these requirements arose with the development of technologies. Personal information is being stored and sent electronically across the web and on remote servers. There have been recent concerns raised by the Department of Labor about the security and accessibility of this vulnerable personal information. Data like

Social Security numbers, addresses, and dates of birth have a significant value to hackers. Generally, standard insurance policies do not include coverage related to cyber risks; therefore, those charged with governance should be assessing their plan’s risks on a regular basis.

In an effort to respond to the concerns of the DOL, the Auditing Standards Board, which is an AICPA committee tasked with creating new auditing standards, has proposed a new Statement on Auditing Standards, AU-C Section 703, Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA. The proposed standard includes new required procedures when an ERISA limited-scope audit is performed, an expanded description of management’s responsibilities, new communication on the ERISA supplemental schedules, new required emphasis-of-matter paragraphs, and a new Report on Specific Plan

{}“ “Changes in technology frequently impact filing

and audit requirements of benefit plans.

R


Author Name, Titles, Company Article Title

By Gabriel Potter

Individual Investorsand

Tax Management


individual investors and Tax ManagementGabriel Potter, aiFa®, MBa, Westminster Consulting, LLC

Tailored articles for the Fiduciary audience

From our firm’s inception until 2017, Westminster Consulting had limited our consulting services solely for institutional clients. More specifically, our clients are the institutions – the retirement plan or charity organization – but their interests are represented by fiduciaries – the dedicated men and women who sit on investment and plan committees to act on behalf of the institution.

As a result, our past writing (westminster-consulting.com/publications) tackled topics that catered to those fiduciaries and the institutions they represent. Our December 2011 article was about the Stable-Value marketplace; this article is primarily relevant to defined benefit plan sponsors, like a 401(k), and their committee members. Our August 2012 article, “Pension Fund Relief from MAP21,” was all about changes to pension plan funding through new legislation; that article was chiefly for defined benefit plan sponsors. In August 2013, we wrote a blog post for charities, about how inflation baselines affect endowment and foundation return and spending targets. Similarly, our collaborative quarterly magazine, Confero, has frequently targeted different institutional client types. Confero Issue 7 was all about automatic features for defined contribution plans. Issue 10 was the endowment-and-foundation issue while, Issue 14 was all about pension plans.

our new audience: Retirement Plan Participants and individual investors

As we noted in our previously monthly article, “Westminster Consulting Expands,” our clientele has recently expanded to include individual households as part of our effort to increase fiduciary coverage at a personal level to defined contribution plan participants and others.

Our new clients, both individuals and institutional, may investigate our online presence and review our work in years past. Curious readers can go online and peruse past

years of weekly blog posts, monthly articles, and Confero issues. Individual investors may find our writing insightful, but not relevant to their experience. We aim to change that. Moreover, institutional representatives must learn about the topics relevant to their duties as fiduciaries, but they may also appreciate insights into their personal experiences as individual investors with independent interests. Going forward, we will remove our self-imposed limitations and address issues that speak to us as personal investors. This should greatly expand our potential topics and relevance. After all, everyone has to deal with his or her own finances.

a Concern That Primarily Challenges individual Households: Taxes

There is an aspect of financial health where corporations and individuals frequently have greater sensitivity than institutions and their fiduciary representatives – taxes.

Many institutional clients, like a qualified retirement plan or a tax-exempt charitable organization, are largely defined by their favorable tax treatment, presuming they comport with the necessary legal requirements. Most individuals do not have the same luxury.

At first glance, tax consideration is not the primary concern of investment consultants.

However, consultants, while not providing direct tax advice, are certainly aware of the impact of taxes on their individual client portfolio and tailor solutions while cognizant of the tax consequences of their recommendations. After all, so many investment strategies and products are clearly designed around tax efficiency, including exchange funds, municipal bonds, tax-efficient ETFs, and the variety of legally sanctioned tax-deferred accounts (e.g., Roth IRAs, 529s, Coverdells).

don’t Wealth Managers Handle Taxes?

There is a type of investment consulting that promotes itself as an integrated approach of investment advice, estate planning, insurance, and, yes, tax management – is often described as wealth management. However, key financial firms that

are ostensibly providing this fully integrated approach will repeatedly warn clients through disclosures their consultants do not provide tax, legal, or accounting advice. In practical terms, most reasonably sophisticated consulting firms offer commensurate levels of advice, once normalized against the constraints of their business practices.

Why Financial institutions Can ignore Client Wishes

While there is clearly a demand for a truly integrated, all-in-one advisor, the financial industry is not eager to provide a solution. Why? Part of the problem is due to a lack of standardized qualifications, either in terms of education or professional designations, for consultants, compared with other professionals like accountants or attorneys. Creating a standard degree or examination requirement costs money to enforce and could shut out existing, hitherto profitable, advisors. It is easier to stick with the minimal testing and licensing requirements from FINRA.

Another obstacle is the lack of a universal, meaningful code of conduct. Without the code of conduct, certain types of business practices common for the financial industry are incompatible with other duties and ethical standards common to adjacent professions. The largest players in finance and investments are loath to change the status quo. We have documented through our blog posts and articles over the past year, the high degree of resistance from the established financial industry towards adopting a higher code of conduct – the fiduciary standard – even when it only applied to the limited scope of U.S. retirement assets.

Taxes are a Moving Target

In general, consultants cannot technically provide tax advice, and for good reasons: They lack standards in their approach and qualifications. So, whether you work with an investment-focused consultant or a wealth manager, it is likely they will both be sensitive to tax issues, and possibly to the same degree, but it isn’t typically their primary area

of expertise. Compounding this problem for investors utilizing a consultant is that the tax-code is a moving target, both from a legal perspective and in terms of best practices. The best response may change over time.

From a legal perspective, the Trump administration and Republicans in Congress are trying to push tax reform, although there aren’t yet many public details. These details come with huge potential consequences. The Republicans’ primary goal is a large cut in tax-rates for corporations with a secondary goal of simplifying, and lowering, household tax brackets. How to pay for that goal? There may be structural changes to offset the loss in corporate tax revenue such as the loss of mortgage deductions, tax deferral accounts, the AMT, estate taxes, international tax shelters, additional tariffs, and so on. Understanding and utilizing

investments that protect investors inside the new legal landscape, whatever it ends up being, is going to a be an additional concern for today’s consultants.

In the meantime, best-practice evolution continues to generate novel solutions in regards to tax management strategies for investors. New investment products and portfolio-construction

techniques are available to protect investor gains. For instance, many individuals have multiple account types – ordinary taxable and tax-deferred. A tax-sensitive investor can allocate specific investments to those account types to maximize tax efficiency. This practice is common enough, but new trends include refinement of this technique. Which investments might benefit most by placement in a tax-deferred account? The previously reigning dogma had been to place most aggressive investments with highest growth potential inside tax-deferred accounts, on the theory that the largest gains should be realized last. New refinements, tools, and investment products allow consultants to separately allocate individual securities and investments. Consultants can now individually evaluate securities that yield highly taxable dividend-income or bonds with short-term taxable payments to maximize tax efficiency.

{}“ “The largest players in finance and

investments loath to change the status quo. {}“ “When investors attempt tax-loss

harvesting to offset realized gains in a taxable account, they need to be cognizant of wash-sale rules to avoid

trouble with the iRS.


Article Title

Other factors, beyond security income generation, can be included in this analysis. For instance, it may be most advantageous to place the most active trading strategies (or securities) within a tax-advantaged account. When investments are held less than one-year, gains are often taxed at higher short-term capital gains rate.

There are a variety of legal requirements and hazards to acknowledge when utilizing and evaluating such tax-management strategies. For example, when investors attempt tax-loss harvesting to offset realized gains in a taxable account, they need to be cognizant of wash-sale rules to avoid trouble with the IRS. Work with qualified professionals when considering these strategies to see which approach might be best for you.

Future articles for individual investors

There are other trends and concerns that primarily affect individual households that we considered including in this article. For instance, we would ultimately like to provide a comparison of individual retirement-readiness calculators available online. We also considered an examination of a new trend rattling up the financial brokerage industry – robo-advisors. We would provide insights into what robo-advisers are, how they work, and a comparison of some of the most common ones available. However, to keep the size of our monthly article from being too onerous, we will save these discussions for a future article or blog post. Going forward, we will feel free to address these topics that affect individual households; we encourage you to reach out to us and let us know which topics most interest you.

Gabriel Potter is the Senior Research Analyst at Westminster Consulting, LLC.

He can be reached at [email protected] or 585-246-3750.

Thank You ContributorsDavis & Gilbert LLPE F P R Group LLP

Epstein Becker Green P CFiducia Group, LLCGroom Law Group Vanguard Group

Westminster Consulting, LLC

Confero | 3534 | Fall 2017


Contact Jim at [email protected] or 412-540-2300.

Partner sPotlIghtJ i m b a r t o s z e w i c z

eet Jim Bartoszewicz from Fiducia Group! Jim is one of the three

principal partners at Pittsburgh, based Fiducia Group, a member

of Confero Fiduciary Partners. Jim’s entire career, which is now approaching 30 years, has been dedicated to servicing workplace qualified retirement plans. Jim has worked for both large national firms and smaller entrepreneurial companies over those thirty years but the one common thread with every position is the enjoyment of servicing clients. Helping clients solve complicated problems and finding ways to prepare participants for retirement are his most satisfying responsibilities. Jim is a people person and gets to know his clients as friends first before getting down to business and imparting his knowledge in a way that is custom-fit to their personal style and company culture.

Jim’s degree in mathematics led him to the actuarial profession, where he cut his teeth working with defined benefit pension plans. His passion for ERISA law quickly led him to enroll in law school at night while still advancing his career by day. After four busy years, he earned his Juris Doctorate from the Duquesne University School of Law. While never practicing law, his legal license is active and the degree has served both Jim and his clients well. Jim will tell you that continuing education is critical to maintaining the level of proficiency his clients expect. With this idea, he has achieved and maintains multiple designations from leading organizations dedicated to

the retirement industry in the areas of investment process and fiduciary excellence.

While every stage of his career has contributed to his broad knowledge of the retirement and investment industry, the most unique training came when he served as a Chief Compliance Officer for a national broker dealer and investment advisory firm. Learning the investment industry from the inside out provided a unique view of the inner-workings of the securities industry. Being responsible for the ethical and compliant delivery of investment services showed him how to get the best results for customers while weeding out unwarranted fees. Jim used this experience to create a defined contribution investment advisory practice for a local benefits consulting firm before partnering with Fiducia Group in 2009, where he now serves as its Chief Compliance Officer.

Outside of his profession, Jim and his wife Rosemary have raised three children in the Pittsburgh area where they too both grew up. Their twins, Jacob and Abigail, are about to finish their third year of college and their oldest child Steven is headed back to school for his MBA. With the “kids” out of the house, Jim has more free time to focus on his favorite charities which center on helping families and teens in the inner-city Pittsburgh neighborhoods. He also has a passion for coaching youth basketball where he just wrapped up his seventeenth successful season.

Fiducia Group provides unbiased advice and fiduciary expertise for employer-sponsored retirement plans. Our support and guidance helps plan participants achieve retirement readiness. Our tested process also makes plan sponsors’ lives easier by saving them time and lead to high quality, cost effective and compliant retirement plans.

Fiducia Group couples extensive experience with a singular focus on serving employer-sponsored retirement plans. Retirement plans require a higher level of expertise and focus from an advisor. Sponsors have and enormous responsibility of managing someone else’s money and can greatly influence their standard of living in their retirement years. A retirement plan advisor should not be just another vendor relationship, judged on fees and personality. You need and deserve an expert.

Focused AdviceFiducia Group’s core business, our only business, is helping retirement plan sponsors manage their plans. We are retirement plan specialists, it’s what we do... it’s all we do.• 100% of our revenues come from assisting

employers with theirretirement plans.• Our services and innovation are targeted to

support mid- to large-sized employers with multiple fiduciaries or committees.

• Each of our consultants is an owner of the firm and is committed to our

• clients and the retirement industry.

Traditional ValuesWe focus on personal relationships with our clients, built upon trust and integrity. • We care about retirement plan participants and

their success.• We care about our clients and the challenges they

face with fiduciary responsibility.• We charge a reasonable flat fee; not a commission

or asset-based fee.• We are leaders in our industry and take an

active role in improving our profession and the regulations of workplace retirement plans.

At Fiducia Group, we provide seasoned expertise and insight in helping investment fiduciaries better manage their legal responsibilities through considered advice, secure technology, and on-going fiduciary education.

Meet fiducia groupFocused Advice.

Traditional Values.

{}“ “Our only mission is to provide advice and support that will reduce sponsor’s burden

and improve employee’s retirement readiness.- Jim Bartoszewicz

M

Fiducia Group, LLC100 W Station Square Drive, Suite 615

Pittsburgh, PA 15219 Phone #: 412.540.2300

www.fiduciaretirement.com/Publications/Confero

Documents

A quarterly publication of Fiducia Group, LLC CONFERO ...fiduciaretirement.com/upload/ConferoIssue20.pdf · Online/Digital Operations Jacob Button [email protected]