$27.5 Million Settlement in Ameriprise 401k Excessive Fee Case
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In This Issue
Court and Legal
Settlement Achieved in Ameriprise 401k Excessive Fee Case Summary: Schlichter, Bogard & Denton announced that it reached a $27.5 million settlement on behalf of Ameriprise employees and retirees in the 401k excessive fee case, Krueger v. Ameriprise Financial.
Source: 401khelpcenter.com
Posting SPD on Intranet Insufficient Without Notice to Participants Summary: The crux of this case involves satisfying ERISA's electronic disclosure rules when posting SPDs on a company intranet. The takeaway is that merely placing SPDs on a website, without notifying participants of their availability and significance (and the right to a paper copy), does not satisfy ERISA's requirement.
Source: Ebia.com
Plaintiffs Fail to Float Claim Past District Court Summary: The U.S. District Court for the District of Massachusetts in In re Fidelity ERISA Float Litigation has determined that float income is not a plan asset. This case is just another example of why retirement practitioners should keep a close watch on case law that impacts fiduciary governance obligations.
Source: Fraplantools.com
Fiduciary and Plan Governance Material
Improving Plan Selection Through Demographics Summary: Fiduciaries who select investment menu options have many factors to consider. Such factors increasingly include plan participant demographics, which today means far more than participant ages and retirement timeframe. Article reviews some other demographic factors to consider.
Source: Benefitnews.com
White Labeling: Is Simpler Better? Summary: Many plan sponsors have struggled with the dilemma of how to diversify or expand the menu of core asset classes offered in their plans without making it more complicated and confusing for participants. One potential remedy is white labeling, which simply means packaging the core lineup in a way that makes it easier for participants to understand and use.
Source: Invesco.com
12b-1 Fees/Revenue Sharing Add to 401k Plan Sponsor Fiduciary Liability Woes Summary: The SEC is going after 12b-1 fees. The DOL is questioning revenue sharing. Jerry Schlichter and other class action attorneys are winning cases against plan sponsors on these payments. Could it be, after years of warnings, we are finally about to witness the fall of the house of 12b-1?
Source: Fiduciarynews.com
How to Unearth Hidden Fees in 401k Plans Summary: Opaque fee structures lurk among the complexities of 401k plans, meaning that sponsors might be leaving money on the table. Awareness of the inherent costs can help streamline management of defined contribution plans while keeping within regulatory guidelines.
Source: Institutionalinvestor.com
Insight: Studies, Research and White Papers
Defined Contribution Retirement Plan Benchmarks Summary: This 36 page paper catalogues a summary of statistics and trends related to common features of retirement plans. The information and benchmarks included provide a useful comparison for evaluating the current status of your retirement plan program and may help you identify potential changes to consider, including automatic features that make saving easy for employees.
Source: Bmogamviewpoints.com
Understanding the Conservative Options for DC Plans Summary: This six page paper, produced by Fidelity Investments, reviews the conservative options available to DC plans, discuss the potential advantages/disadvantages of each type of fund offering, and highlight the investment and plan considerations associated with them.
Source: Fidelity.com
30 Most Generous Companies With the Best 401k Plans Summary: BrightScope announced the second annual list of the 30 Most Generous Companies ranked by their 401k plans, showcasing companies that are placing an emphasis on helping employees prepare for their financial futures.
Source: 401khelpcenter.com
Study Finds Hispanics Optimistic About Financial Future, Despite Challenges Summary: Hispanics are feeling positive about their financial situation, according to new research commissioned by MassMutual, despite the slow growth in wages and still rebounding economy. The study examined the perceptions Hispanics have of their finances today as compared to the past, and how prepared they are for emergencies.
Source: 401khelpcenter.com
Items of Special Interest to Service Providers
Startup Sees 401k Industry Ripe for Disruption Summary: The 401k industry may be the next slice of the financial services industry to be targeted by technology disruptors. New financial tech firm Dream Forward Financial is positioning itself as a low-cost 401k provider, which its founder says will offer better digital services and operational transparency than traditional providers.
Source: Financial-Planning.com
Paper Shares Insights for Alternative Fund Managers Looking to DC Plans Summary: According to the paper, the retirement market may be the next frontier for the growth of liquid alternatives and underscores the critical role that education will play in the adoption of liquid alternatives among DC plan fiduciaries, advisors and participants.
Source: 401khelpcenter.com
NAPA Adopts Proactive Stance Against Fiduciary Standard Summary: Brian Graff, executive director and CEO of NAPA, says that the retirement business has at long last come onto Washington's radar, but the increased scrutiny is exposing a series of long-standing biases against retirement advisers that he fears will ultimately make it difficult for them to provide assistance to employees who need it the most.
Source: Benefitnews.com
Plan Automation
Auto Enrollment - Unforeseen Admin Costs Attributable to Small Account Balances Summary: An experience many plan sponsors encounter following the rollout of a 401k auto enrollment campaign is an increase in the number of non-participating individuals with relatively small account balances. These small accounts can significantly impact the costs of plan administration. With sufficient planning, auto enroll can be implemented without drastically altering costs, but what can be done when it's too late and the growth of small account balances begin costing you money?
Source: 5500audit.com
Mindless Pitfalls: Don't Leave 401k Automatic Enrollment Plans Alone Summary: The biggest advantage (and disadvantage) of automatic enrollment is that employees don't have to do anything. It's the essence of automatic enrollment. But it also makes people less responsible for their own retirement decisions. Punam Anand Keller, PhD, Tuck School of Business at Dartmouth discusses barriers to automatic enrollment plans and the solutions to overcome them.
Source: Invesco.com
Compliance and Regulatory Related
ERISA Civil and Criminal Enforcement Activity by DOL Is Trending Upward Summary: The Fact Sheet recently published by the Department of Labor documenting Fiscal Year 2014 civil and criminal enforcement activity under ERISA showed a continuing increase in the number of investigations conducted by DOL. Article reviews and charts this recent increase.
Source: Sutherland.com Summary: The DOL reports that it received 1,643 Voluntary Fiduciary Correction Program applications and 25,060 applications under the Delinquent Filer Voluntary Compliance Program. It is not a bad idea to take a serious look at the plans we sponsor and see if there are errors that we should self-correct -- which is better than having mistakes pointed out by a DOL auditing team.
Source: Foxrothschild.com
Marketplace News Principal Enhances Support for Participants Nearing Retirement Joe DeNoyior Named president of NAPA Retirement Resources Named NAPA 401k Leadership Award Winner Voya Adds PotentialPLUS Annuity to Retirement Offerings MassMutual Adds Eight New Sales Professionals Hancock Hires Sales VP for Central Texas Region EPIC Advisors Unveils New Branding Empower Institute Launched to Address Retirement Savings Issues
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