Thursday, May 13, 2021
Many U.S. employers offer their employees financial wellness programs to complement retirement planning and investment advice. This may include emergency savings plans and household budgeting tips, for example. Many of these employers utilize their retirement plan service providers for those trainings. Not only do those companies have the knowledge and expertise in this area, but they also have access to employee data that can yield information on the service needs and funding goals of those employees.
However, some recent lawsuits argue that when these third-party retirement plans use a plan participant’s data to sell them other financial products (e.g., high-interest credit cards, life insurance, etc.), employers are breaching the fiduciary duty to avoid conflict-of-interest transactions. This litigation has focused on classifying personal information and investment preferences as a “plan asset” similar to the money invested in the plan. If