401(k) Roundtable

My now annual conversation with Jerry Schlichter, plaintiffs attorney with Schlichter Bogard & Denton has been one of the more popular episodes on the 401(k) Fridays podcast. This year was one of our best and most forward looking. In case you are not familiar with Jerry and his work in successfully brining 401(k) or ERISA litigation against employers, he has a pretty impressive track record. He burst onto the scene with a flurry of litigation in 2006 and to date he has secured settlements of over $300 million and what he would call significant improvements in their plans. In total, this relief is valued at more the $1.5 billion. In Jerry’s prior appearances on the podcast we have talked about how the modern era of 401(k) litigation started, his unanimous victory in the Supreme Court and several other of his thoughts and observations. This time, we briefly touch on the current state of litigation and spend most of our time talking about how he thinks litigation will evolve in the coming decade. This is a great listen, be sure to stick around for the end when I ask him about his third act in retirement plan litigation.

If you want to check out my prior conversations with Jerry you can either search or scroll through your podcast app and look for titles with "Boogey Man" in it. Those are not required listening to follow along in this episode, but are good none the less. Also, please share your thoughts on this episode on social media. Be sure to tag me, Rick Unser or the 401(k) Fridays Podcast. Or, if you would prefer send me a private message or an email to [email protected].

For the episode transcript, bonus question and more information go to https://www.401kfridays.com/schlichter2020

Guest Bio

Jerry is founding and managing partner of the firm. He has been repeatedly elected by his peers for inclusion in "Best Lawyers in America” and “Lawyer of the Year” and is listed in the 2019 edition.

Jerry has been featured in numerous national publications, including the New York Times, Reuters, Bloomberg, USA Today, and the Wall Street Journal, for his and the firm’s success in pioneering claims of excessive fees in 401(K) plans and obtaining precedent-setting results involving claims of excessive fees against large employers, and for the reduction in fees his cases have caused throughout the 401(k) industry.

He and the firm have obtained settlements in these 401(k) excessive fee cases of more than $300 million for employees and retirees, in addition to significant improvements in their 401(k) plans; in total, this relief has been valued at more than $1.5 billion. He also was lead attorney for the firm in the first and only full trial of an excessive fee case in the country, resulting in a verdict of $36 million. In recent rankings of the most influential people in the 401(k) industry by 401kWire.com, Jerry has repeatedly ranked in the top 5.

According to a recent article published in Reuters, the CEO of Brightscope, an independent company which evaluates 401(k) plans, stated, speaking of Mr. Schlichter’s national impact on 401(k) plan fees, that “[h]is impact has been humongous." The New York Times has referred to Jerry as “a Lone Ranger of the 401(k)’s,” and he has been referred to by Investment News as “public enemy no. 1 for 401(k) profiteers” and by Chief Investment Officer as “the industry’s most feared attorney.” In describing the effect of his work on behalf of employees in 401(k) plans, the Wall Street Journal referred to it as being “Schlicterized”.

In 2014 and 2015, Mr. Schlichter’s firm obtained the two largest 401(k) excessive fee settlements in history. The first was a settlement for $62 million against Lockheed Martin on behalf of Lockheed Martin employees, which included significant changes to the Lockheed Martin 401(k) plan. The second was a settlement for $57 million from Boeing, which likewise included significant non-monetary relief.

Also in 2015, Mr. Schlichter won a unanimous 9-0 decision in the U.S. Supreme Court in Tibble v. Edison, the first U.S. Supreme Court case to consider fees in 401(k) plans.

In an order in the case of Nolte v. Cigna Corporation in 2013, the U.S. District Court judge stated: “As the preeminent firm in 401(k) fee litigation, Schlichter, Bogard & Denton has achieved unparalleled results on behalf of its clients. Jerome Schlichter and Schlichter, Bogard & Denton’s work throughout this litigation stands as yet another example of the firm’s acting as a private attorney general, risking breathtaking amounts of time and money while overcoming many obstacles for the benefit of employees and retirees. . . . Mr. Schlichter and the Schlichter, Bogard & Denton firm’s actions have led to dramatic changes in the 401(k) industry, which have benefited employees and retirees througho...

In a somewhat related follow-on to our conversation last week about the long term impact of automatic enrollment, today we tackle the emerging auto concept of auto portability. My guest, Spencer Williams, Founder & CEO of Retirement Clearing House has been intimately involved in the process to get this off the ground and available in a workplace retirement plan near you! As you might expect, we discuss what auto portability is, the retirement challenges it intends to solve, how it differs from todays auto-cashouts or auto-rollovers and much more. We also wax philosophical once or twice and be sure to stick around for the end where Spencer shares how employers or retirement service partners can help move the auto-portability concept further down the road.

As we get ready to kick off a new year and new decade for that matter, I would love to get any input on bigger picture topics or guests you would like me to tackle. Send your ideas to [email protected]. We will take it from there.

Guest Bio

Spencer Williams is Retirement Clearinghouse’s Founder, President and CEO. Retirement Clearinghouse is a specialized provider of portability and consolidation services for America’s mobile workforce and has serviced more than 1 million job-changing participants during Mr. Williams’ 9 year tenure with the company. Prior to joining Retirement Clearinghouse, Williams served in a number of senior executive roles at MassMutual Financial Group, and as a retirement Services executive at Federated Investors, Inc.

Williams earned his B.A. degree in English from the United States Naval Academy and an M.B.A. from the University of Pittsburgh.

401(k) Fridays Podcast Overview

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over 175 prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!

Episode Overview

If you are in the Not-for-Profit Healthcare sector and sponsor a retirement plan, I have some great information for you! This is the first in a series of industry profile episodes that I will be making over the next several months. This episodes features a broad and interesting conversation with Brodie Wood, Senior Vice President, Not-for-Profit Markets at Transamerica Retirement Solutions. He shared several great pearls of wisdom for employers who sponsor a 403(b) or 401(k) plans in this sector such as:

• Business trends in the sector that may impact retirement plans
• Impact of physicians integrating back into hospital systems
• Updates on employer contribution levels
• Strategies to encourage higher participation and contribution rates
• Emergence of Retirement Readiness as a measure of plan success
• How introducing Financial Wellness can improve participant outcomes

For more information on this episode, please go to www.401kfridays.com.

If you like what you hear, please share with a colleague, friend or peer. Also, please leave feedback on iTunes or Google Play.

Guest Bio

Brodie Wood, is a Senior Vice President, and head of Not-for-Profit Markets at Transamerica Retirement Solutions. In his role, Mr. Wood leads and is responsible for the company’s not-for-profit business and product development efforts. He was previously Vice President of Transamerica’s Participant Counseling Organization, a group dedicated to delivering employee education and retirement planning for plan participants.

He has also served on the board of the American Hospital Association’s Institute for Diversity in Health Management since 2010. He has been involved in the retirement plan field for the past fifteen years helping participants become retirement ready.

Mr. Wood earned his B.A. with a dual major in Spanish and Business from Utah State University. He has also completed his M.B.A. from Brigham Young University in 2002. He is a Six Sigma Green Belt and holds FINRA Series 26, 7, 63, and CRPC designations.

401(k) Fridays Podcast Overview

The 401(k) Fridays podcast offers companies of all sizes free strategic, educational and actionable content to improve their retirement plans. My name is Rick Unser and I am your host. All episodes leverage my nearly two decades of experience working with employers to bring you candid interviews with industry experts, new best practices and valuable perspectives on current events.

The financial markets have started the decade on a feverish pace despite a brief pandemic induced bear market. Today, Dr. David Kelly, CFA with J.P. Morgan Asset Management joins me to share his thoughts on where we go from here. As usual he has great insights on what it will take to get some inflation in the economy, what impact new policies from the Biden administration could have on financial markets, and with the current equity valuations and low interest rates, does that mean employers should be thinking differently about investment diversification in their retirement plans?

For more insights on the financial markets from the J.P. Morgan Asset Management Team, check out their Guide to the Markets.

Guest Bio

Dr. David Kelly is the Chief Global Strategist and Head of the Global Market Insights Strategy Team for J.P. Morgan Asset Management. With over 20 years of experience, David provides valuable insight and perspective on the economy and markets to the institutional investor and financial advisor global communities.

Throughout his career, David has developed a unique ability to explain complex economic and market issues in a language that financial professionals can use to communicate to their clients. He is a keynote speaker at many national investment conferences and a frequent guest on CNBC, Bloomberg, and other financial media outlets.

Prior to joining J.P. Morgan Asset Management, David served as Economic Advisor to Putnam Investments. He has also served as a senior strategist/economist at SPP Investment Management, Primark Decision Economics, Lehman Brothers and DRI/McGraw-Hill.

David is a CFA® charterholder. He also has a Ph.D and M.A. in Economics from Michigan State University and a B.A. in Economics from University College Dublin in the Republic of Ireland.

401(k) Fridays Podcast Overview

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over 200 prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!

Ok, so you offer a 401(k) plan for your employees, you review participation and contribution rates, analyze your investments and negotiate plan fees. You should feel good that you have taken many of the steps to be a diligent retirement plan fiduciary. But, if you truly want to provide your employees with a 401(k) that is more than a just a savings plan, if you want to develop a benefit that both your employees and company will value, there is more work to be done to make that leap to provide a true retirement plan. As you will hear, my guest Glenn Dial, Managing Director and Head of Retirement Strategy at Allianz Global Investors has given this transformational concept a lot of thought and has some great insights to share with our listeners. We hit a few thought provoking questions such as is it wrong to focus on promoting a 401(k) savings plan which uses high average participant account balances as the measurement of success? We also delve into strategies on how to move and measure your progress of transitioning from a 401(k) savings plan to a retirement plan. Glenn also shares thoughts on how to address and answer questions around measuring the return on investment from employer contributions. On that note, we also discuss if you want to develop more of a retirement plan, should that employer contribution be a match or profit sharing contribution, and how does an increasingly more mobile workforce factor into this conversation?

Remember, many episodes of the podcast have been submitted or pre-approved for both SHRM and HRCI recertification credits. Check it out at 401kfridays.com/ce to see how you can listen, learn and earn!

Guest Bio

Mr. Glenn Dial is a managing director with Allianz Global Investors, which he joined in 2011 as Head of Retirement Strategy. Mr. Dial has more than 20 years of retirement-industry experience. He previously held senior-management positions with JPMorgan and Ceridian. Mr. Dial holds three patents as the co-inventor of the “method and system for evaluating target-date funds” and is also credited with developing the target-date fund category system commonly referred to as “To versus Through.” He is the author of a monthly newsletter titled, “Dialed In to Retirement.”

Glenn is one of the 100 Most Influential People in the Defined Contribution industry according to the 401kWire.com survey in 2015, 2014, 2013.

He has a B.S. /B.A. in finance from the University of Central Florida and an M.B.A. from Rollins College.

401(k) Fridays Podcast Overview

Helps employers navigate the evolving retirement benefits landscape through weekly engaging interviews with industry leaders, subject matter experts and progressive employers with unique viewpoints. The diverse in-depth perspectives and relevant topics help employers make more informed decisions about their retirement benefit programs which will positively impact their employees and business.

We are quickly approaching our 50th podcast episode! To explore our growing library of content, if you are subscribed to the podcast, scroll through your podcast app and pick a few episodes that catch your interest, or go to 401kfridays.com/podcasts to find prior episode descriptions, guest bios bonus information and more!