Archive for April, 2015

Lifting the veil of employer-sponsored retirement plan costs

nest_eggThere are two primary expense categories related to Employer-Sponsored Retirement Plans: Investment Services Fees (mutual fund management) and Service Provider Fees (recordkeeping, administration, advisor services).

Recent fee disclosure regulations, such as 408(b)(2), have changed the world of fee transparency by revealing how expense ratios, revenue-sharing agreements, and wrap fees are used to pay for plan services. There is already a growing concern that plan participants may not have adequate income for retirement. Thus, it is important to understand these fees and how they are paid.
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Insurance industry leads the way for cyber best practices

April 27, 2015 Leave a comment

computers_techIt was reported earlier this month in the Wall Street Journal that many Corporate Information Security Officers (CISOs) are turning to the insurance sector for assistance and guidance when it comes to understanding cyber security.

Normally late to the party, insurance carriers tend to thoroughly examine years and years of loss experience in order for actuaries to set the rates for new areas of risk. But it is not the case when it comes to the rapidly developing area of cyber threats. Instead it is the insurance sector that many are turning to for guidance on how to deal with the uncertainty of cyber security. Read more…

Newman case continues to blur line of what is and is not insider trading

April 23, 2015 Leave a comment

The landmark December 2014 ruling in United States v. Newman by the United States Court of Appeals for the Second Circuit overturned the convictions of two hedge fund traders, Todd Newman and Anthony Chiasson. In early April, the Second Circuit denied reconsidering their ruling as requested by United States Attorney Preet Bharara. The government must now decide whether to appeal to the Supreme Court, and if they should depend on Congress adopting legislation for the first time that clearly provides a statutory definition of illegal insider trading.

These latest developments in the Newman case make it much more difficult for the government to prosecute individuals accused of insider trading. Prosecutors must now demonstrate that the defendant(s) alleged to have traded on confidential information leaked by a corporate insider: Read more…

DOL looking to redefine term “fiduciary” – what that means for employer responsibilities

Vicarious-Liability-employment-contract-426x272Am I a fiduciary? I never like to answer a question with a question but do you make decisions for the 401(k) plan on behalf of the company? If you answered yes then you are in fact a plan fiduciary. There is no hotter topic in the 401(k) industry than the Department of Labor’s effort to redefine the term “fiduciary.” Yet with all the buzz surrounding the DOL’s proposal, many employers who offer a retirement plan are not aware of their fiduciary responsibilities and the liability that comes along with making 401(k) plan level decisions.

What is a fiduciary and who established the rules? Fiduciary responsibilities were instituted by the Employee Retirement Income Security Act of 1974 (ERISA) and are monitored by DOL. To ensure that fiduciaries are doing what is best for their employees and satisfying the DOL requirements ERISA has implemented standards of conduct, including:

Mental health care in the workplace & how employers can help

emp_talkingIn the wake of the devastating tragedy in the French Alps this month where one man’s struggle with depression brought down a 144-passenger Germanwings plane, concerns and questions arise across all industries about measures companies can take to manage the mental health of their employees. In situations where the employee’s mental instability threatens the safety of others, as in the Lufthansa crash, the employer could face unlimited liability.

According to research by All One Health, in any given year, nearly 30 million American adults suffer from depression and twice that many from anxiety disorders. These numbers are costing U.S. employers billions of dollars per year in lost productivity. Read more…

5 reasons your private company should consider D&O insurance

5_D&OPrivate company leaders should not make the mistake in thinking they are protected from personal lawsuits simply because their company is not publicly traded. According to Chubb’s Private Company Risk Survey, 27% of private companies experienced a D&O lawsuit over the previous decade, compared to 33% of public companies. And in 2013, the cost of a lawsuit against a director or officer of a private company was an average of nearly $700,000. Despite such risks as costly lawsuits, government fines, and more, a large percentage of company leaders are not taking steps to protect themselves. So, before you write it off entirely, keep these 5 factors in mind.

  1. The threat of lawsuits
    Private companies are statistically less likely to be sued in comparison to public companies, but a few instances stand out:

    • Creditor suits. If your private company were to go bankrupt, there is a chance creditors could sue. D&O insurance would protect the personal assets of company leadership from these creditor lawsuits.

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