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Litigators Find New Targets in Nonprofits

(Washington, DC) –5 October 2016 – It has been comparatively recent that nonprofit organizations have found themselves subject to the same retirement plan fiduciary status as their for profit counterparts.  Even so, nonprofits have historically managed to avoid the litigious quagmire of the for profit world.

That is about to change, according to Keith Mulvihill, Vice President and risk management expert with Lockton’s Washington, DC office.

“This year, numerous multi-billion dollar lawsuits have been filed against university retirement plans,” says Mulvihill.  “They claim sponsors breached their fiduciary duties by failing to monitor their plans for fair pricing and competitive investment performance.”

“Corporate plans have been litigation targets for years, but suits against nonprofits are relatively new,” adds David Levine, a Principal at Groom Law Group with a focus on employee benefits legal matters.  “Universities are the first to see this, but they won’t be the last nonprofits targeted.  Hospitals and other major nonprofits could easily be on the radar as well.”

The silver lining for nonprofits is that they can learn from the experiences of their for profit counterparts, says Mulvihill.

“There are specific practices that can mitigate exposure,” he says.  “We have templates for committee governance, investment oversight, provider selection; a host of strategies that can help an employer defend against these types of suits.  The key is to help nonprofits understand their exposure and get their houses in order, quickly.”

Mulvihill and Levine will be part of a multi-firm panel convening next month in Washington, DC to explore the risks and the options.

“We’re bringing together service providers, auditors, lawyers, ex-DOL investigators,” says Levine.  “We’re looking at this from every angle.”

“We have a tremendous opportunity to learn from the for profit community and to avoid the mistakes that have cost them billions of dollars,” adds Mulvihill.

The Nonprofit Fiduciary Summit will be hosted from 8 a.m. until 10 a.m. at the City Club in Columbia Square, Washington, DC on November 2, 2016.  Presenters include representatives from Lockton Retirement, Groom Law Group, the auditors of Clifton Larson and Allen, and TIAA-CREF.  Access to the panel discussion is free for sponsors of not for profit retirement plans, but space is limited.  Reservations can be made by clicking here.

About Lockton

More than 6,000 professionals at Lockton provide 50,000+ clients around the world with risk management, insurance, employee benefits consulting, and retirement services that improve their businesses. From its founding in 1966 in Kansas City, Missouri, Lockton has attracted entrepreneurial professionals who have driven its growth to become the largest privately held, independent insurance broker in the world and 10th largest overall. For seven consecutive years, Business Insurance magazine has recognized Lockton as a "Best Place to Work in Insurance." To see the latest insights from Lockton's retirement experts, check our website.

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