Products January 30, 2018

John Hancock Creates Financial Wellness Tool to De-stress Participants

The tool aims to relieve anxiety caused by personal finance woes.

Reported by

After its Financial Stress Survey found that 66% of respondents suffering moderate to extreme stress blamed it on their finances, John Hancock Retirement Plan Services created a new financial wellness tool to de-stress and engage plan participants.

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The Financial Wellness Assessment—which, according to John Hancock, will be free to all of its plans—provides tips on budgeting, debt management, saving, investing and other areas of personal finance that can be stressful. The resource also presents participants with a questionnaire about paying off debt, creating an emergency fund, saving for retirement, estate planning and health care. From the person’s answers, the tool assesses his needs and creates an action plan to address them. Additionally, it offers tips for customizing plan education programs.

“Our most recent Financial Stress Survey shows that much of the population still experiences financial stress and people need help managing their overall financial picture to alleviate [it] – and enable saving for retirement,” says Patrick Murphy, John Hancock president. “We see retirement as part of a holistic financial journey, and the more we can help our participants address the issues that may be a barrier to saving and reduce financial stress, the more we’ve achieved our ultimate goal of improving retirement readiness.”

The Financial Stress Survey was conducted in June 2017; more than 2,000 workers participated.

Compliance January 30, 2018

Self-Dealing Suit Filed Against Mutual of Omaha

The complaint alleges fiduciaries of Mutual of Omaha’s 401(k) plan violated their fiduciary duties by selecting numerous investment options because they paid fees to Mutual of Omaha or its subsidiaries.

Reported by

A new Employee Retirement Income Security Act (ERISA) lawsuit has been filed against Mutual of Omaha and its 401(k) fiduciaries.

 

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According to the complaint, the plan’s fiduciaries violated their fiduciary duties by selecting numerous investment options not to benefit the plan or its employees, but because they paid fees to Mutual of Omaha or its subsidiaries.

A request for comment from the firm has not yet been received.

In particular, the suit says fiduciaries selected United of Omaha-branded investment funds when each of these Omaha-branded funds invested all of its assets in another publicly available investment fund managed by an unrelated third party—causing the plan to pay a fee to United of Omaha in addition to the fee charged by the underlying fund’s manager when the plan could simply have offered the underlying fund and avoided paying any additional fee to United of Omaha. In addition, it says for several of the non-United of Omaha funds offered in the plan, the fiduciaries added on a fee in addition to the fee charged by the fund.

 

The complaint alleges the plan’s fiduciaries included several United of Omaha-branded Mutual GlidePath target-date funds, which charged plan participants more than non-plan investors paid to invest in those funds. In addition, the fiduciaries constructed several asset-allocation funds (the “Mutual Directions” funds), which automatically allocated participants’ savings to other funds based on risk parameters identified by the participants. United of Omaha added additional fees to the Mutual Directions funds in addition to those charged by the underlying funds.

 

Finally, the lawsuit claims plan fiduciaries elected to include in the plan a capital preservation option called the Guaranteed Account, which was managed by United of Omaha, despite scores of other better capital preservation funds on the market simply because the Guaranteed Account paid significant fees to United of Omaha.

 

The plaintiff in the suit seeks damages and equitable relief on behalf of the plan.

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