Category Archives: investments

“Humble Arithmetic” and the Future of 401(k) Litigation

Posted on March 15, 2023 by jwatkins

By James W. Watkins, III, J.D., CFP Board EmeritusTM, AWMATM Fortunately, there is currently a case pending in the 10th Circuit, the Matney case, which may go a long way in resolving two of the primary issues that continue to … Continue reading →

Posted in 401k, 401k compliance, 401k investments, 401k plan design, 401k risk management, 403b, Active Management Value Ratio, AMVR, cost consciousness, cost efficient, cost-efficiency, Cost_Efficiency, ERISA, ERISA litigation, fiduciary, fiduciary compliance, fiduciary duty, fiduciary law, fiduciary liability, fiduciary liability, Fiduciary prudence, fiduciary prudence, fiduciary responsibility, fiduciary risk management, fiduciary standard, investments, Mutual funds, pension plans, plan advisers, plan sponsors, prudence, retirement plans, risk management | Tagged 401k, 401k compliance, compliance, ERISA, fiduciary, fiduciary investing, fiduciary law, fiduciary liability, fiduciary oversight, Fiduciary prudence, fiduciary responsibility, fiduciary risk management, retirement plans | Leave a comment

401(k) InvestSense: Focus on Fiduciary Process Over Product

Posted on March 6, 2023 by jwatkins

By James W. Watkins, III, J.D., CFP Board Emeritus™, AWMA® People often ask me what is the most common mistake that plan sponsors make, The answer is simple-assuming unnecessary fiduciary liability exposure by focusing on product rather than process. Actually, … Continue reading →

Posted in 401k, 401k compliance, 401k investments, 401k plan design, 401k risk management, 403b, Active Management Value Ratio, AMVR, Annuities, best interest, closet index funds, compliance, cost consciousness, cost efficient, cost-efficiency, ERISA, ERISA litigation, fiduciary, fiduciary compliance, fiduciary duty, fiduciary law, fiduciary liability, fiduciary liability, Fiduciary prudence, fiduciary prudence, fiduciary responsibility, fiduciary risk management, fiduciary standard, investment advisers, investments, Mutual funds, pension plans, plan advisers, plan sponsors, prudence, retirement plans, risk management, wealth management, wealth preservation | Tagged 401k, 401k compliance, 401k fiduciary, compliance, ERISA, fiduciary, fiduciary duty, fiduciary investing, fiduciary law, fiduciary liability, Fiduciary prudence, fiduciary responsibilities, fiduciary risk management, fiduciary standard, fiduciaryliability, fiduciaryoversight, investment advisers, retirement plans | Leave a comment

4Q 2022 AMVR “Cheat Sheets”: Correlation of Returns, “Closet Indexing,” and Fiduciary Liability

Posted on January 2, 2023 by jwatkins

James W. Watkins, III, J.D., CFP Board EmeritusTM, AWMATM First, note the new URL address. After years of having to explain the old “iainsight.wordpress.com” URL, we finally worked with WordPress to accomplish the re-branding. Kudos to WordPress for working with … Continue reading →

Posted in 401k, 401k compliance, 401k investments, 401k plan design, 401k risk management, Active Management Value Ratio, AMVR, closet index funds, compliance, consumer protection, cost consciousness, ERISA, fiduciary, fiduciary compliance, fiduciary duty, fiduciary law, fiduciary liability, fiduciary liability, Fiduciary prudence, fiduciary prudence, fiduciary responsibility, fiduciary risk management, fiduciary standard, investment advisers, investments, Mutual funds, pension plans, plan advisers, plan sponsors, prudence, retirement plans, risk management, SEC, securities, securities compliance, trust realtionships, wealth management, wealth preservation | Tagged 401k, 401k compliance, Active Expense Ratio, Active Management Value Ratio, compliance, costefficiency, ERISA, fiduciary, fiduciary investing, fiduciary law, investment advisers, retirement plans | Leave a comment

401(k) Litigation Trends to Watch in 2023

Posted on December 11, 2022 by jwatkins

I am often asked what I see as the current trends in 401(k) and what fiduciary risk management steps plan sponsors should consider in order to reduce any potential fiduciary risk exposure. With the end of the year approaching, now … Continue reading →

Posted in 401k, 401k compliance, 401k investments, 401k plan design, 401k risk management, Active Management Value Ratio, AMVR, compliance, cost consciousness, cost efficient, cost-efficiency, ERISA, ERISA litigation, fiduciary, fiduciary compliance, fiduciary duty, fiduciary law, fiduciary liability, fiduciary liability, Fiduciary prudence, fiduciary prudence, fiduciary responsibility, fiduciary risk management, fiduciary standard, investments, Mutual funds, pension plans, plan advisers, plan sponsors, prudence, retirement plans, risk management, SCOTUS, securities compliance, Supreme Court | Tagged 401k, 401k compliance, 403b, compliance, ERISA, fiduciary, fiduciary duty, fiduciary investing, fiduciary law, fiduciary liability, Fiduciary prudence, fiduciary responsibility, fiduciary risk management, investment advisers, Restatement Trusts, retirement plans | Leave a comment

Target Date Funds Have Now Become the Targets of 401(k) Litigation (Part 2)

Posted on October 16, 2022 by jwatkins

In my last post, I analyzed the popular Fidelity Freedom Active Suite and Fidelity Freedom Index target date funds. The Fidelity Freedom and TIAA-CREF Lifestyle target date funds are arguably the two most popular groups of target date funds in … Continue reading →

Posted in 401k, 401k compliance, 401k investments, 401k plan design, 401k risk management, 403b, Active Management Value Ratio, compliance, consumer protection, cost consciousness, cost efficient, cost-efficiency, Cost_Efficiency, ERISA, ERISA litigation, fiduciary compliance, fiduciary duty, fiduciary law, fiduciary liability, fiduciary liability, Fiduciary prudence, fiduciary prudence, fiduciary responsibility, fiduciary risk management, fiduciary standard, investment advisers, investments, Mutual funds, pension plans, plan sponsors, prudence, retirement planning, retirement plans, risk management, wealth management, wealth preservation | Tagged 401k, 401k compliance, 404c compliance, compliance, fiduciary, fiduciary duty, fiduciary investing, fiduciary law, fiduciary liability, fiduciary risk management, investment advisers, investor protection, retirement plans | Leave a comment

Fiduciary Risk Management and Liability-Driven 401(k) Plan Design

Posted on August 28, 2022 by jwatkins

by James W. Watkins, III, J.D., CFP®, AWMA® I have written several posts on this blog critiquing the Sixth Circuit’s decision in Smith v. CommonSpirit Health (CommonSpirit). The decision, particularly the court’s “apples and oranges” argument is inconsistent with the … Continue reading →

Posted in 401k, 401k compliance, 401k investments, 401k plan design, 401k risk management, 403b, Active Management Value Ratio, AMVR, cost consciousness, cost efficient, cost-efficiency, ERISA, ERISA litigation, fiduciary compliance, fiduciary duty, fiduciary law, fiduciary liability, fiduciary liability, Fiduciary prudence, fiduciary prudence, fiduciary responsibility, fiduciary risk management, fiduciary standard, investment advisers, investments, Mutual funds, pension plans, plan sponsors, prudence, risk management, wealth management, wealth preservation | Tagged 401k, 401k compliance, 401k risk management, compliance, ERISA, fiduciary, fiduciary investing, fiduciary law, fiduciary risk management, investment advisers, retirement plans, risk management | Leave a comment

An Inconvenient Truth: Cost-Inefficiency and Closet Indexing in 401(k) Plans

Posted on July 17, 2022 by jwatkins

“Facts do not cease to exist because they are ignored” – Aldous Huxley The Sixth Circuit Court of Appeals’ recent decision in the CommonSpirit Health (CommonSpirit)1 401(k) action has brought renewed attention to several key 401(k) compliance and fiduciary liability … Continue reading →

Posted in 401k, 401k compliance, 401k investments, 403b, Active Management Value Ratio, AMVR, best interest, closet index funds, compliance, consumer protection, cost consciousness, cost efficient, cost-efficiency, ERISA, ERISA litigation, fiduciary compliance, fiduciary duty, fiduciary law, fiduciary liability, fiduciary liability, Fiduciary prudence, fiduciary prudence, fiduciary responsibility, investments, Mutual funds, pension plans, plan sponsors, prudence, Reg BI, retirement plans, risk management, wealth management, wealth preservation | Tagged 401k, 401k compliance, 403b, compliance, ERISA, fiduciary, fiduciary investing, fiduciary law, fiduciary liability, Fiduciary prudence, fiduciary responsibility, investment advisers, plan participants, plansponsors, retirement plans | 2 Comments

2Q 2022 AMVR “Cheat Sheets”

Posted on July 1, 2022 by jwatkins

At the end of each calendar quarter, I perform a forensic AMVR fiduciary prudence analysis on the non-index mutual funds within the top 10 funds in U.S. defined contribution plans, as ranked by “Pensions & Investments.” InvestSense provides both a … Continue reading →

Posted in 401k, 401k investments, Active Management Value Ratio, AMVR, asset allocation, best interest, consumer protection, cost consciousness, cost efficient, cost-efficiency, Cost_Efficiency, ERISA, ERISA litigation, fiduciary compliance, fiduciary duty, fiduciary law, fiduciary liability, fiduciary liability, Fiduciary prudence, fiduciary prudence, fiduciary responsibility, fiduciary standard, investment advisers, investments, Mutual funds, pension plans, plan sponsors, prudence, risk management, wealth management, wealth preservation | Tagged 401k, 401k compliance, 404c compliance, ERISA, fiduciary, fiduciary investing, fiduciary law, investment advisers, retirement plans | Leave a comment

“Meaningful Choices”: Cost-Efficiency, the CommonSpirit Health decision, and the Future of 401(k) Litigation

Posted on June 30, 2022 by jwatkins

Recently, the Sixth Circuit handed down its decision in the Smith v. CommonSpirit Health (“CommonSpirit) 401(k) action.1 My immediate reaction was “hello again SCOTUS,” as once again we have inconsistent and irreconcilable rulings between two circuits involving ERISA litigation The … Continue reading →

Posted in 401k, 401k compliance, 401k investments, 403b, Active Management Value Ratio, AMVR, best interest, closet index funds, cost consciousness, cost efficient, cost-efficiency, ERISA, ERISA litigation, fiduciary compliance, fiduciary duty, fiduciary law, fiduciary liability, fiduciary liability, Fiduciary prudence, fiduciary prudence, fiduciary responsibility, fiduciary standard, investment advisers, investments, Mutual funds, pension plans, plan sponsors, prudence, Reg BI, wealth management, wealth preservation | Tagged 401k, 401k compliance, compliance, cost-efficiency, ERISA, ERISA litigation, fiduciary, fiduciary investing, fiduciary law, fiduciary liability, Fiduciary prudence, fiduciary responsibility, investment advisers, plansponsors, retirement plans | 1 Comment

Caveat Fiduciarius: The Reg BI “Reasonably Available Alternatives”/ERISA “Fiduciary Prudence” Liability Trap

Posted on June 4, 2022 by jwatkins

I am on record as saying that (a) ERISA plaintiff’s attorneys should never lose a properly vetted 401(k)/403(b) action, and (b) the amount of 401(k)/403(b) litigation is going to continue to increase. Those opinions are based on three trends within … Continue reading →

Posted in 401k, 401k compliance, 401k investments, 403b, 404c, 404c compliance, best interest, compliance, consumer protection, cost consciousness, cost efficient, cost-efficiency, ERISA, ERISA litigation, fiduciary compliance, fiduciary duty, fiduciary law, fiduciary liability, fiduciary liability, Fiduciary prudence, fiduciary prudence, fiduciary responsibility, fiduciary standard, investment advisers, investments, Mutual funds, pension plans, plan sponsors, prudence, Reg BI, retirement plans, wealth management, wealth preservation | Tagged 401k, 401k compliance, 404c, 404c compliance, best interests, compliance, ERISA, fiduciary, fiduciary duty, fiduciary investing, fiduciary law, Fiduciary prudence, fiuciary responsibility, investment advisers, InvestSense, plan sponsors, Reg BI, retirement plans | Leave a comment