In this special edition of the 401(k) Specialist Podcast—part of our Deep Dive series on “How Not to Get Sued”—Editor-in-Chief Brian Anderson sits down with legendary ERISA attorney Fred Reish to examine how fiduciary risk is evolving in today’s regulatory and litigation environment.
Fred Reish, Director of Fiduciary and ERISA Practice at Prime Capital Retirement, shares insights on the shifting landscape of ERISA litigation, emerging concerns around private assets in 401(k) plans, and the Department of Labor’s evolving posture under the second Trump administration.
The conversation also explores artificial intelligence, pooled employer plans, in-plan lifetime income solutions, and what fiduciaries should be watching next for fiduciary risk. For advisors and plan sponsors focused on protecting participants—and protecting themselves—this is essential listening.
Key Takeaways
The Rise of PEPs: Pooled Employer Plans (PEPs) are described as an ideal “plug and play” solution for employers wanting to offload administrative and fiduciary weight, provided they vet the Pooled Plan Provider (PPP) thoroughly.
The Evolution of ERISA Litigation: Fred Reish traces the modern era of fiduciary breach litigation back to the Enron case, noting how it shifted focus toward investment quality, costs, and the “transparency era” triggered by the 401(8)(b)(2) regulations.
Current Litigation Hotspots: Beyond excessive fees, plaintiff attorneys are now targeting target date funds (where the bulk of plan assets often reside) and guaranteed investment returns (stable value or GICs) if they underperform the general marketplace.
A “Pro-Business” Regulatory Shift: Reish notes a distinct shift in the Department of Labor (DOL) under the current administration from pro-participant to pro-business, driven partly by a desire to curb “frivolous” ERISA lawsuits and encourage innovation.
AI and Personalization: While identifying risks like PII security breaches, Reish highlights the massive potential for AI to drive down costs and provide hyper-personalized participant support for retirement readiness and deferral elections.
Episode Timestamps
[22:06] – PEPs and Lifetime Income: Why PEPs are here to stay and why plan sponsors must start designing plans for distribution, not just accumulation.
[00:00] – Introduction: Fred Reish joins the podcast to discuss his new role at Prime Capital Retirement and the “How Not to Get Sued” deep dive.
[04:54] – History of ERISA Litigation: From the “euphoria” of the 90s to the landmark Enron case that defined the modern fiduciary era.
[07:15] – The Fee Transparency Era: How litigation evolved from company stock to share classes, recordkeeping costs, and “behind the curtain” revenue sharing.
[08:54] – Modern Targets: A deep dive into litigation surrounding forfeitures, underperforming stable value contracts, and the vetting of target date funds.
[11:28] – Alternative Assets in 401(k)s: Reish predicts new DOL guidance on private equity and debt will likely build upon the 2020 information letter.
[14:43] – The DOL’s New Stance: Analyzing EBSA’s shift toward a pro-employer posture to limit “cost of litigation” settlements.
[16:44] – The Future of AI: Balancing the risks of data security with the “unlimited potential” for individualized participant relationships.