Interest rates could be a significant risk to retirement savers that is hiding in plain sight. During my conversation with Mike Barry, President of O3 Advisory Services, we connect a lot of dots on how low interest rates could impact the retirement of current and future retirees.  We also hit on several reasons why interest rates have been trending lower, whether student debt plays into the conversation and why employers who are even considering pursuing a retirement income strategy should think very carefully about all of this prior to making a decision.  Mike and I definitely get into the weeks on a few things but pull everything together in a way that will leave you with a better understand of the impact of interest rates on retirement plans.  

Before we get started, a simple rating or comment on  your favorite podcast app goes a long way to help others discover the podcast. Next time you log on, if you could give us a rating or leave a comment that would be great. Also, if you have a favorite podcast app that you can’t find us on please shoot me an email to feedback@401kfridays.com and we will get the show added.  

Guest Bio

Michael P. Barry is a senior consultant at October Three and President of O3 Plan Advisory Services LLC, which provides retirement plan regulatory analysis targeted at plan sponsors and those who provide services to them. Plan Advisory Services publishes analyses of regulatory developments affecting private employer defined benefit and defined contribution plans, focusing on the challenges, opportunities, and consequences for sponsors that regulatory changes present. Mike has had over 40 years’ experience in the benefits field, in law and consulting firms, concentrating on the regulation of private employer DB and DC retirement plans.

Beginning law practice in 1976, the year that the Employee Retirement Income Security Act (ERISA) became effective, Mike has worked with and studied the evolving complexities of regulation in this heavily regulated field. Before founding Plan Advisory Services in 1998, Mike was Managing Director at Bankers Trust and, before that, a New York benefits partner at LeBeouf, Lamb, Greene & McRae. He writes a regular column for PLANSPONSOR magazine (“Barry’s Pickings”). Mike blogs at moneyvstime.com, and you can follow him on Twitter @PlanAdvisorySvc. His book – Retirement Savings Policy – Past, Present, and Future, published by De|G PRESS is available on Amazon. 

We last spoke with my guest Fred Reish, ERISA Attorney and Partner at Drinker Biddle in the immediate aftermath of the demise of the DOL Fiduciary Rule.  Today, we catch-up on what has happened since and what implications they have for employers, their employees and retirement service providers.  Without stealing too much of Fred’s thunder, we start with why this conversation and regulations exists, what has changed in concept and with new and newish players entering the fray like the SEC and several states.  We also put a finer point to some concepts that sound the same but have different meanings like conflict of interest & prohibited transaction or fiduciary & best interest.  Also Fred is pretty candid about what he thinks the result of these regulations will be and for my closing question, I get him to wax a little philosophical.  

As a reminder, check out the website for todays episode at 401kfridays.com/reish2019 for a full transcript, links to Fred’s blog and other information he puts out as well as his answer to this weeks bonus question.  To give you a little preview, Fred shares his opinion on whether the DOL will revisit the fiduciary rule and what that could look like.  

Guest Bio

Fred Reish is an ERISA attorney whose practice focuses on fiduciary responsibility, prohibited transactions and plan qualification and operational issues. He has been recognized as one of the “Legends” of the retirement industry by both PlanAdviser magazine and PlanSponsor magazine. Fred has received awards for: the 401(k) Industry’s Most Influential Person by 401kWire; one of RIABiz’s 10 most influential individuals in the 401(k) industry affecting RIAs; the Commissioner’s Award and the District Director’s Award by the IRS; the Eidson Founder’s Award by the American Society of Professionals & Actuaries (ASPPA); the Institutional Investor and the PlanSponsor magazine Lifetime Achievement Awards; and the ASPPA/Morningstar 401(k) Leadership Award. He has also received the Arizona State University Alumni Service Award. Fred has written more than 350 articles and four books about retirement plans, including a monthly column on 401(k) fiduciary issues for PlanSponsormagazine. Fred Co-Chaired the IRS Los Angeles Benefits Conference for over 10 years, served as a founding Co-Chair of the ASPPA 401(k) Summit, and has served on the Steering Committee for the DOL National Conference.

Depending on who you ask, fiduciary liability insurance might not be on the top of their list as the most exciting topic, but it is important.  For my guest today, Reid Eanes, a Senior Vice President with Lockton Insurance Brokers, helping insure fiduciary is from workplace retirement plans is a key part of his day job.  We start with a few basics on how fiduciary liability insurance works and differs from other types of insurance programs a company might have, we then delve into what types of “issues” can be covered, thoughts on how to determine the amount of fiduciary liability insurance and what types of plans are harder or more expensive to insure.  Finally, with all the talk of cyber liability we hit on what employers can do to insure potential risk there.  Oh, and don’t miss the part where we talk about what to do if you think you want or need to make a claim on your fiduciary liability insurance policy, some definite do’s and don’ts.  

Before we get started, if you have been enjoying the podcast if you could either go to your favorite podcast app and either like or leave a comment.  Based on the way their technology works, that goes a long way in helping other people find the podcast.  As our audience grows, it helps me continue to attract great guests and bring you their unique perspectives on workplace retirement plans.  

Guest Bio

Reid is a Senior Vice President and Practice Leader for the Pacific South region of Lockton Financial Services (LFS), the National D&O and Governance Risk Management Group. Reid has responsibility for the Los Angeles, Irvine, and San Diego LFS teams.

Reid is responsible for operations and client servicing for Executive Liability coverages. He provides full contract analysis, coverage negotiation, claims advocacy, and alternative program design. Reid is well versed in the financial and analytical review of companies, from a risk management perspective. 

Reid is a regular pubic speaker on the topic of Executive Risk insurance and Governance Risk Management. 

Reid works with a diverse set of clients, especially those with more complex risk needs. His expertise includes public and private companies, financial institutions, and healthcare risks 

This week we try something a little different.  This episode is the audio portion of a webinar I hosted a few weeks ago.  The content was great and I thought it would make sense share with you.  My conversation features Sam Henson and Ethan McWilliams, both members of Lockton's ERISA regulatory and compliance team and both spent time as investigators with the Department of Labor.  We start with a quick overview of an employer's fiduciary responsibilities, then compare and contrast how they relate to retirement and benefits plans, next we hit on the DOL's enforcement priorities, the every popular topic of HSA plans and where they fit in the fiduciary conversation, plan assets and fees and close out with everyone's favorite topic compliance and reporting. 

I host several webinars are year, if you did not get an invite to this one and would like to in the future, just go to www.401kfridays.com/subscribe today and join our email list.  Next one is coming up in November and will feature a prior podcast guest as we talk about how a plaintiff's attorney views your retirement plan.

Guest Bios

Sam Henson serves as Director, Legislative & Regulatory Affairs
for Lockton Retirement Services. He acts as a subject
matter expert on ERISA compliance, DOL/IRS activities,
and the legislative landscape. In addition, Sam supervises
compliance services for more than 1,000 Lockton
retirement clients and 100 retirement Associates.

Prior to joining Lockton, Sam spent almost 10 years
with the U.S. Department of Labor’s Employee Benefits
Security Administration. While with the DOL, Sam was
a Senior Investigator, conducting more than 100 civil and
criminal investigations of employee benefits plans, service
providers, and fiduciaries. Sam supervised enforcement
efforts for benefit plans funded by prevailing wage laws
under the Service Contract Act and Davis-Bacon Act.
In his current role, Sam is able to leverage his past
experiences to assist employers with reducing their
fiduciary risks.

Ethan McWilliams brings five years of ERISA regulatory compliance
experience to his position as Lockton Benefit Group’s
Senior Compliance Analyst. At Lockton, Ethan’s
primary responsibility is heading up the newly launched
simulated Department of Labor investigation service,
ACE.

Working with client or prospect representatives and
Lockton’s account teams, Ethan simulates every step of
the DOL investigation process with the ultimate goal of
preparing plan sponsors for the process of a real DOL
investigation. Through a review of plan documents
and mock fiduciary interviews, Ethan identifies red-flag
items and suggests available remedies, recommends
the implementation of best practices where established
procedures may be weak, and educates plan sponsors
on exactly what to expect when their benefit plans are
chosen for investigation.

Before joining Lockton, Ethan worked
as an Investigator for the US Department of Labor -
Employee Benefits Security Administration (EBSA). At
EBSA, Ethan conducted a variety of employee benefit plan investigations on both the retirement and health/
welfare sides, running the gamut from complex defined
benefit pension plans and 401(k)/403(b) defined
contribution plans to multi-option medical, dental, and
life insurance plans. Ethan also served as a member of
several regional and national project teams, including
initiatives aimed at identifying best practices for plan
procedural prudence and establishing baselines for
reasonable plan fee calculations.