Page 1

Recording of this session via any media type is strictly prohibited.

Page 1

Is All Quiet On The Fiduciary Front?

New Issues in Fiduciary Liability

Page 2

Recording of this session via any media type is strictly prohibited.

• Sharon Goldzweig, Associate Counsel,Consolidated Edison - Chief employee benefits counsel responsible for all union and non-union employee benefit matters

• Rhonda Prussack, EVP – Fiduciary Liability, AIGOversight of production, marketing, pricing and underwriting of fiduciary liability insurance

Page 3

Recording of this session via any media type is strictly prohibited.

What to Expect

•Be up-to-date on the latest developments from the Employee Retirement Income Security Act (ERISA) plaintiffs’ bar•Formulate strategies to reduce exposures•Assess the adequacy of your fiduciary liability insurance coverage.

Page 4

Recording of this session via any media type is strictly prohibited.

Which Of These Issues Are You Worried About?

• Pension Plan De-risking?• 401(k) Fees?• Affordable Care Act?• Stock Drop Litigation?• Church Plan Litigation?• None of the Above

Page 5

Recording of this session via any media type is strictly prohibited.

Pension Plan De-Risking

• If annuity vendor was engaged, was the “safest available” provider selected?

• Did the plan pay too much to the annuity provider?• Were appropriate interest rate assumptions used in

the calculation of future liabilities?• Were future liabilities of the plan undervalued?• What happens to federal protection (by the Pension

Benefit Guaranty Corporation)?

Page 6

Recording of this session via any media type is strictly prohibited.

Pension Plan De-Risking Cont’d.• Other ERISA protections• Notice• Disclosure• PBGC review

• Protection from creditors• Concerns about lump-sum distributions to

retirees already in pay status• Which party is responsible to correct past

mistakes?

Page 7

Recording of this session via any media type is strictly prohibited.

401(k) Fees

• Tussey v. ABB• March 19, 2014 – 8th Circuit Court of Appeals mixed

decision o If plan grants fiduciaries discretion to construe the plan,

then fiduciaries’ interpretations are entitled to deferenceo “Float” is not a plan asseto Record-keeping fees deemed excessive

Page 8

Recording of this session via any media type is strictly prohibited.

401(k) Fees Cont’d.

• Kruger v. Novant Health, Inc. (M.D. North Carolina, Mar. 12, 2014)

• Beesley v. International Paper Company (S.D. Illinois)• Jan. 31, 2014 - $30 million settlement

• Nolte v. Cigna Corp. (C.D. Illinois)• Dec. 18, 2013 - $35 million settlement

Page 9

Recording of this session via any media type is strictly prohibited.

Affordable Care Act

• Myriad plan changes already in effect• Prohibition against pre-existing condition exclusions• No lifetime or annual limits on “essential health benefits”• Mental health parity

• Department of Labor audits of ACA compliance well underway

• Required notice of availability of healthcare exchanges• Was additional advice provided about the exchanges? • Termination of coverage or change in employee status from

full-time to part-time – ERISA 510?

Page 10

Recording of this session via any media type is strictly prohibited.

Stock Drop Litigation

Fifth Third Bancorp v. Dudenhoeffer• Supreme Court considered this question:• Did the Sixth Circuit err by finding that in a stock

drop matter, the investment in employer stock within an ESOP may be entitled to a presumption of prudence, but only after plaintiffs have the opportunity for discovery, not at the outset of a case?

Page 11

Recording of this session via any media type is strictly prohibited.

Church Plan Litigation

Kaplan v. Saint Peter’s Healthcare System, (D.N.J. Mar. 31, 2014)

Stapleton v. Advocate Health Care Network, (N.D. IL. Mar. 17, 2014)

Rollins v. Dignity Health, (N.D. Cal. Dec. 12, 2013)Overall v. Ascension Health, (E.D. Mi. Mar. 28, 2013)Chavies v. Catholic Health East (E.D. Pa., Mar. 28, 2013)

Page 12

Recording of this session via any media type is strictly prohibited.

Questions, Final Comments and Contact Information

Page 13

Recording of this session via any media type is strictly prohibited.

Please complete the session survey on the RIMS14 mobile application.