PLANSPONSOR - December 2021 - January 2022 - 6

RULES & REGULATIONS
If Plans Become Hard to Insure
E
rin Turley, a benefits partner with
McDermott Will & Emery, recently
spoke to John Manganaro, managing
editor of PLANADVISER.com, about
an issue that could affect all stakeholders
in the retirement plan services industry.
Turley has been practicing in the
employee benefits space for more than
25 years and handles employee benefits
compliance and litigation for both publicly
traded and privately held clients.
PLANSPONSOR: Plan sponsors and
providers continue to be sued for a
variety of things, so we imagine it's
been a busy year for you.
Turley: Litigation continues to be a
major focus, of course, and we're seeing
some new emerging consequences of this,
namely changes happening in the fiduciary
insurance marketplace. For the past
several years, we've begun to have real
challenges securing sufficient fiduciary
insurance coverage [for our clients] due
6
PLANSPONSOR.COM Decem er
to litigation in the ESOP [employee stock
ownership plan] space. In the past two to
three years, this has started to spill over into
the traditional 401(k) plan space. More and
more, it's an issue across our areas of practice.
In just the past two years, we've seen
something like a five-fold increase in the
number of excessive fee lawsuits targeting
401(k) plans. That's a telling metric, and it
has insurance providers and underwriters
feeling pretty nervous, frankly.
PS: Are we reaching the point
where the fiduciary insurers are
starting to scrutinize their clients
even more closely?
Turley: It's a challenging market right
now, to the point that we are looking at
trying to think about ways that insurance
products might be differently structured,
to address what we hope will only be a
short-term tightening in the market.
The pressure on insurers and
plan sponsors is having a direct impact
ember 2021 - January 2022
ry 20
Art by Jam Dong
on the progress of the industry. For
example, consider a plan sponsor that
is keeping up with the news and considering
whether it wants to join a pooled
employer plan [PEP]. In any lawsuit, I'm
guessing, the plaintiffs will sue both
the plan sponsor and the PEP provider.
Only if the PEP provider can prove there
wasn't a fiduciary breach can the sponsor
then have comfort that it won't now have
liability for failing to monitor and oversee
the PEP provider properly. Ultimately, if
an employer's insurance policy is still on
the line for a fiduciary breach committed
by a PEP provider, that can really challenge
the value proposition.
PS: With such challenges in mind,
how do employers make a good
impression on the insurers?
Turley: Plan sponsors have to understand
all of the service providers they're working
with-the investment adviser, the recordkeeper,
the trustee, etc. If you go into a
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PLANSPONSOR - December 2021 - January 2022

Table of Contents for the Digital Edition of PLANSPONSOR - December 2021 - January 2022

INSIGHTS
RULES & REGULATIONS
UPFRONT
ESG Interest Piqued
2021 Best in Class DC Providers
Ramping Up Offerings
Annuities Still Misunderstood
Student Loan Repayment
FIDUCIARY FORUM
INSIDE ANGLE
PLAN PROFILE
PLANSPONSOR - December 2021 - January 2022 - Cover1
PLANSPONSOR - December 2021 - January 2022 - Cover2
PLANSPONSOR - December 2021 - January 2022 - 1
PLANSPONSOR - December 2021 - January 2022 - 2
PLANSPONSOR - December 2021 - January 2022 - 3
PLANSPONSOR - December 2021 - January 2022 - INSIGHTS
PLANSPONSOR - December 2021 - January 2022 - 5
PLANSPONSOR - December 2021 - January 2022 - RULES & REGULATIONS
PLANSPONSOR - December 2021 - January 2022 - 7
PLANSPONSOR - December 2021 - January 2022 - 8
PLANSPONSOR - December 2021 - January 2022 - 9
PLANSPONSOR - December 2021 - January 2022 - UPFRONT
PLANSPONSOR - December 2021 - January 2022 - 11
PLANSPONSOR - December 2021 - January 2022 - 12
PLANSPONSOR - December 2021 - January 2022 - 13
PLANSPONSOR - December 2021 - January 2022 - 14
PLANSPONSOR - December 2021 - January 2022 - 15
PLANSPONSOR - December 2021 - January 2022 - ESG Interest Piqued
PLANSPONSOR - December 2021 - January 2022 - 17
PLANSPONSOR - December 2021 - January 2022 - 18
PLANSPONSOR - December 2021 - January 2022 - 19
PLANSPONSOR - December 2021 - January 2022 - 2021 Best in Class DC Providers
PLANSPONSOR - December 2021 - January 2022 - 21
PLANSPONSOR - December 2021 - January 2022 - 22
PLANSPONSOR - December 2021 - January 2022 - 23
PLANSPONSOR - December 2021 - January 2022 - 24
PLANSPONSOR - December 2021 - January 2022 - 25
PLANSPONSOR - December 2021 - January 2022 - 26
PLANSPONSOR - December 2021 - January 2022 - 27
PLANSPONSOR - December 2021 - January 2022 - 28
PLANSPONSOR - December 2021 - January 2022 - 29
PLANSPONSOR - December 2021 - January 2022 - Ramping Up Offerings
PLANSPONSOR - December 2021 - January 2022 - 31
PLANSPONSOR - December 2021 - January 2022 - 32
PLANSPONSOR - December 2021 - January 2022 - 33
PLANSPONSOR - December 2021 - January 2022 - Annuities Still Misunderstood
PLANSPONSOR - December 2021 - January 2022 - 35
PLANSPONSOR - December 2021 - January 2022 - Student Loan Repayment
PLANSPONSOR - December 2021 - January 2022 - 37
PLANSPONSOR - December 2021 - January 2022 - FIDUCIARY FORUM
PLANSPONSOR - December 2021 - January 2022 - INSIDE ANGLE
PLANSPONSOR - December 2021 - January 2022 - PLAN PROFILE
PLANSPONSOR - December 2021 - January 2022 - Cover3
PLANSPONSOR - December 2021 - January 2022 - Cover4
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