Robin Schachter Quoted in Financial Advisor Magazine on Lawsuits over the Blurred Line Between 403(b) and 401(k) Plans
Robin Schachter, a partner in Akin Gump’s tax practice, was quoted in the Financial Advisor article “Lawsuits, DOL Rule Blur The Line Between 403(b) And 401(k) Plans,” about ERISA class action lawsuits that have been filed against several universities alleging they had not met their fiduciary responsibilities to employees enrolled in 403(b) plans.
Schachter described this as a “complicated” issue. These plans, he said, “may or may not fall under the Department of Labor’s rulemaking. In some respects, these plans may be low-hanging fruit for advisors and for litigators because they were not previously ERISA plans.”
The article reports that the schools in question allegedly did not act in their participants’ best interest when selecting investment options for their plans. Schachter said suits like this often get settled “because they become quite large and expensive, but there have been a few that have gone to a decision.”
In the article, Schachter advised universities to review their 403(b) plans to ensure that fee and investment decisions are made in the best interest of participants. He added that they should also verify that the process for making those decisions is documented.