Employee Benefits Law Report

Tag Archives: Annuity

DOL Sues Insurance Brokerage Firm – Selection of an Annuity Provider for a Terminating Pension Plan is a Fiduciary Duty

The Department of Labor (“DOL”) has sued an insurance brokerage firm, and its owner, for allegedly breaching fiduciary duties associated with purchasing an annuity contract for a terminating defined benefit plan. The complaint alleges that in 2003, the firm entered into an agreement to function as an ERISA fiduciary with respect to the purchase, for a fixed fee of $50,000, with no additional compensation. The firm then purportedly arranged to receive an additional $522,047 of compensation from the insurance company that was eventually selected, and falsified information submitted by other bidders so that this insurance company would appear to be …

Lifetime Income Choices: It’s All About Pension Risk Management and Allocation of Risk

The Treasury has announced proposed regulations and rulings regarding lifetime income choices. This guidance presumes that employers want to adopt more pension risk by providing more annuity options in their defined contribution and defined benefit retirement plans.  (For links related to this new guidance, see bottom of this post.)

In its fact sheet, the Treasury discusses the financial risks of retirees and explains that the Treasury and Labor Department have undertaken an initiative to provide “more options for putting the ‘pension’ back in our private pension system.” Through this guidance, the Treasury is “removing regulatory barriers” to allow employers and …