Participants January 10, 2017

Millennials Keenly Interested in Employers With 401(k) Plans

Eighty percent would prefer to work for a company that offers a retirement plan.
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Eighty percent of Millennials said they would prefer to work for a company with a 401(k) plan, according to a survey by Fisher Investments 401(k) Solutions. However, 80% of Millennials failed Fisher’s 401(k) IQ in the Workplace Quiz, indicating that they are in need of education about retirement planning.

Millennials rely the most on information about retirement planning from individual contacts, be they friends, relatives or co-workers, dispelling the notion that they rely solely on the Internet. They also said they would like their retirement provider to reach out to them personally.

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However, only 25% of Millennials working at companies with 200 or fewer employees are enrolled in their plan. Millennial women are less confident than Millennial men in their ability to pick investments. They are also less likely to be enrolled in their company’s plan and more likely to fail the 401(k) IQ Quiz.

“We’re encouraged that the vast majority of Millennials recognize that 401(k) plans can be indispensable to meeting their long-term savings goals,” says Nathan Fisher, managing director of Fisher Investments 401(k) Solutions. “However, when you get down to the nuts and bolts of planning, it becomes clear there’s an education gap. What’s interesting is the reliance and trust Millennials place on advice from their immediate network instead of retirement providers.”

KRC Research conducted the online survey of 1,013 employees for Fisher Investments, conducted in early October.

 
Compliance January 10, 2017

J.C. Penney to Settle Stock Drop Suit

The company has agreed to pay $4.5 million to resolve a lawsuit alleging it failed to drop the company stock fund from its retirement plan after it was no longer a prudent investment.
Reported by

A federal court judge has preliminarily approved a settlement in a class action against J.C. Penney Corp. over its handling of the company stock fund in its retirement plan.

Under the terms of the settlement, J.C. Penney will pay $4.5 million to resolve allegations that it breached its fiduciary duties under the Employee Retirement Income Security Act (ERISA) by failing to prudently and loyally manage the plan’s assets and to adequately monitor the independent fiduciary and provide the independent fiduciary with accurate information. The lawsuit alleged that plan fiduciaries allegedly knew or should have known that the J. C. Penney Common Stock Fund was an imprudent investment under ERISA.

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According to the settlement agreement, defendants deny any and all liability to plaintiffs and the plan, and deny any and all allegations of wrongdoing made in the action. Defendants deny that some or all of them were fiduciaries under ERISA, or were acting as ERISA fiduciaries at the time of the events complained of, or to the extent that any of them were acting as fiduciaries, that any breach of fiduciary duty occurred in connection with the investment, acquisition, or retention of the J. C. Penney Common Stock Fund in the plan. Defendants further contend that they acted prudently and loyally at all times and in all respects with regard to the plan.

The settlement class includes all individuals, excluding defendants, who participated in the plan, and whose individual accounts held units of the J. C. Penney Common Stock Fund between November 1, 2011, and May 31, 2016.

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