Aon | Financial Services Group
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On March 18, Aon hosted a panel discussion on fiduciary risks in New Jersey.
Panelists included:
Aon
Rafeena Ally, Associate Partner-Transaction Strategy, Talent Solutions
Jay Desjardins, National Fiduciary Liability Practice Leader, Financial Services Group
Tom Meagher, Senior Partner, Practice Leader, Legal Consulting & Compliance
Blake Crohan, Esq., Senior Associate
Following an overview of fiduciary liability insurance and related market dynamics, the panel addressed ERISA litigation.
The chief concern of insurers remains the continuing retirement plan excessive fee litigation involving employer-sponsored 401(k) and 403(b) plans, which has resulted in the filing of over 500 class action suits since 2005, including more than 350 since just 2020. Noting this, the panel explored common theories of liability and the costly implications of defending and resolving these cases, which have resulted in settlements totaling over $1.75 billion (not including defense costs).1
Emerging litigation trends were another major focus, with the panel discussing recent court cases involving 401(k) plan forfeitures, third-party fees in employer-sponsored health plans, nicotine surcharges in employer-sponsored health plans, annuitization (aka pension risk transfer) of defined benefit plan assets, and cyber and data security.
The panel also discussed the importance of establishing and maintain a robust plan governance process. This segment shed light on best practices for maintaining effective fiduciary oversight, such as having the right people and resources to act in the best interest of plan participants, annual fiduciary training of plan committee members, and properly documenting the processes followed and the decisions made by the plan committee.
Overall, the event provided valuable insights into the complex and constantly evolving challenges faced by plan fiduciaries.
1 - Aon analysis of various public sources among which are bloomberglaw.com and plansponsor.com; “Excessive Litigation Over Excessive Plan Fees In 2023,” Chubb; “2024 Excessive Fee Litigation Webinar,” Encore Fiduciary
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