{"id":6349,"date":"2020-03-27T14:02:01","date_gmt":"2020-03-27T19:02:01","guid":{"rendered":"https:\/\/rixtrema.com\/blog\/?p=6349"},"modified":"2020-09-15T09:20:51","modified_gmt":"2020-09-15T14:20:51","slug":"scotus-ruling-alert-plan-sponsors-and-fiduciaries-may-risk-litigation","status":"publish","type":"post","link":"https:\/\/rixtrema.com\/blog\/scotus-ruling-alert-plan-sponsors-and-fiduciaries-may-risk-litigation\/","title":{"rendered":"SCOTUS Ruling Alert! Plan Sponsors And Fiduciaries May Risk Litigation"},"content":{"rendered":"\n
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  1. Don’t Fear the Ruling<\/a><\/li>
  2. Here’s what the Court Found<\/a><\/li>
  3. How advisors can benefit from this ruling<\/a><\/li>
  4. This ruling will not change anytime soon<\/a><\/li>
  5. Here are some next steps for advisors<\/a><\/li><\/ol>\n\n\n\n
    <\/div>\n\n\n\n

    Just when you thought Reg-BI was enough to worry about, a new court ruling<\/a><\/u> just set a new standard for advising employer-plans.<\/p>\n

    Intel lost a significant ERISA Supreme Court court ruling that increased the employer’s responsibilities to disclose information to employees adequately. This court ruling is a BIG deal, but this article contains vital elements that can help advisors prepare their plan sponsors and see a competitive advantage to attract new ones.<\/p>\n

     <\/p>\n\n\n\n

    Don’t Fear the Ruling<\/strong><\/h2>\n\n\n\n

    \u00a0<\/p>\n

    First, our blog\u00a0 touched on how more and more plan sponsors are looking to switch their advising services. Employers want more financial education for employees from their plan advisors.\u00a0 Ultimately, this SCOTUS ruling means more opportunities for advisors to showcase how their standard exceeds a plan sponsor’s existing service.<\/p>\n

    Many employers think that delivering the required disclosure documents to their employees is sufficient. Well, up until this month, that was true.<\/p>\n

    Intel delivered quarterly and annual statements, summary descriptions, and qualified investment alternatives to the plaintiff. Not enough – says the court.<\/p>\n

    In other words, plan sponsors can disclose everything they are required to do and still not meet the ERISA disclosure standard.<\/p>\n

    \u00a0<\/p>\n\n\n\n

    Here’s what the Court Found<\/strong><\/h2>\n\n\n\n
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    First, a quick review of two ERISA sections (bare with me, they’re essential):<\/em><\/p>\n<\/blockquote>\n\n\n\n

    \u00a0<\/p>\n

    The 413[2] part of ERISA sets a 3-yr Statute of Limitations (SoL) that begins when workers have “actual knowledge” of an alleged breach or violation.<\/p>\n

    Section 413[1] extends that statute to 6 years.<\/p>\n

    The court found<\/strong> that the 3-year statute of limitations does not begin after delivering the required documents or even by a worker choosing not to read or not recalling investment information.<\/p>\n

    Ooph indeed\u2026 let’s get rid of the legal jargon.<\/p>\n

    In plain language:<\/strong> fiduciaries are exposed to more lawsuits from employees because there is a higher standard for evaluating claims.<\/p>\n

    Many employers rely on that 3-year SoL to dismiss claims, but their existing practices are not sufficient, and they are most likely subject to the 6-year standard.<\/p>\n

    \u00a0<\/p>\n

    Main findings:<\/strong><\/p>\n