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By Sean Forbes
March 10 — If it hadn't been for clerking for a federal district court judge after law school where he handled his first ERISA case, Paul M. Secunda wouldn't have eventually landed in Australia as a Fulbright scholar to study the nation's retirement system.
Secunda, a law professor at Marquette University, who was chairman of the ERISA Advisory Council in 2015, said that he hadn't taken any classes in employee benefits while in law school. He was “intrigued” by the Employee Retirement Income Security Act and its framework once he went to work for Judge Murray M. Schwartz, of the U.S. District Court for the District of Delaware, he said in an interview with Bloomberg BNA.
His interest in labor law and ERISA has taken him on a long journey with various stops: from the district court through Morgan, Lewis & Bockius LLP in Philadelphia, where he “kind of learned the lingo, learned the insides and outs of employee benefit law practice.” Later he went to Marquette, where he taught his first ERISA course and became a “serious investigator” into employee benefits, a field in which he's currently tackling the challenges facing the U.S. retirement system.
And from Marquette to Down Under in 2015 to study the country's superannuation system, and later this year he'll go to Hong Kong to focus on environment, sustainability and governance factors in pension investment practices.
His inspiration, however, includes Judy Blume.
Secunda said he uses wordplay and storytelling to underline his writing and thinking. Take the title of one of his papers, “Tales of a Law Professor Lateral Nothing,” dealing with the hiring market for law professors.
“Right, that’s my obsession with Judy Blume—‘Tales of a Fourth Grade Nothing'—and Superfudge, who was the protagonist of those novels,” he said. “I think it’s important to grab a reader’s attention, and the first way to do that is through the title of an article.”
Another title, “Sorry, No Remedy: Intersectionality and the Grand Irony of ERISA,” is intended as a gut-punch, and points to his quest to represent people without the resources of better-funded and more influential opponents. It's a quest inspired by his dentist grandfather, who often provided free care for the disadvantaged, as well as supporting various causes “for the working man,” he said.
That paper's title was his “blatant way” of saying that the combination of ERISA's enforcement provisions and the statute's preemption provisions can lead to situations in which people are very much harmed by a breach of fiduciary duty and yet there’s no remedy available because the state law remedy is preempted, Secunda said.
“So, these types of situations kind of cry out for a response to the injustice. And that’s what I’ve always been pulled towards, this idea of fighting for the underdog.”
But when he isn't busy with his professional duties, Secunda will relax by spending time on Twitter (@pscundaworkprof), training for long-distance races by running up to 30 miles per week, and, naturally, indulging in even more wordplay.
“My guilty pleasure is, I would say, Words With Friends. I’m a big Words With Friends adherent,” he said, referring to the Scrabble-like game. “I spend a lot of time trying to find the best words for the most points against friends around the world.”
Back to Australia.
The working title for his next paper also indulges in some wordplay and sums up his conclusions based on his research into Australia's superannuation pension system: “Super and Not So Super.”
“There is something very good at its heart” about superannuation, “but when you get to know a system so well after six months of intense study, you also start seeing its flaws,” Secunda said.
The system is “super” for many reasons, including that it covers nearly all Australians; is based on behavioral finance insights, so plan participants are automatically enrolled into default funds; and gets employers out of providing benefits.
“These are important insights when you consider the Department of Labor has in its budget a call for development of ideas surrounding open multiple employer plans” to encourage small and midsize employers to offer retirement benefits, Secunda said. “You do it by tying benefits not necessarily to the employer, but by having them being able to participate in larger funds that have the sophistication and scale to provide superior investment products.”
But weaknesses in the superannuation system include a comparative lack of fiduciary protection compared with ERISA's requirements and a less competitive market simply because the Australian economy is smaller than the U.S.'s, Secunda said.
The weakness of Australia's fiduciary protections throws light on the DOL's contentious conflict-of-interest rule, Secunda said. Australia enforces retirement schemes through its financial regulators, similar to the U.S. Securities and Exchange Commission, rather than through an employment and labor enforcement agency akin to the DOL, Secunda said.
“And I think that’s an important distinction, because the Labor Department is less likely to be captured, in the sense of a revolving door of similar people going between the government and those who are providing retirement plan services,” he said. “But also captured in the sense that there tends to be a more cushy relationship between financial regulators and those who are financially regulated as opposed to being regulated by the Labor Department where there’s not going to be such a comfortable relationship.”
Secunda said that the spark for his Hong Kong research pursuit is due in part to the decision by a raft of superannuation funds to divest or review whether to divest from Australian company Transfield Services Ltd. (now Broadspectrum). The company is embroiled in controversy over evidence of human rights violations at the offshore asylum seeker processing and detention centers on Manus Island and Nauru it runs on behalf of the Australian government.
Pension funds are among the largest institutional investors in the world, so “they have the ability to push agendas that will increase everyone’s welfare through their power that they exercise as institutional investors in the pension space,” he said.
Secunda said that his current research projects ultimately come back to the same theme: How to confront the challenges people face as they work toward their retirement. “The U.S. is in the midst of a significant retirement crisis. And we need all best practices, and we need to investigate all international examples to come up with solutions to our own retirement security problems.”
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