Deals and People July 5, 2012

ABG-Pentegra Appoints Regional Director

July 5, 2012 (PLANSPONSOR.com)  - Alliance Benefit Group-Pentegra hired Esta Park as a regional director.
Reported by

Park will be responsible for business development in North and South Carolina.

“We are extremely pleased to have someone as talented and experienced as Esta join our organization,” said Pete Swisher, Pentegra’s senior vice president of national sales. “She will be a tremendous asset to ABG-Pentegra’s business development efforts in the Carolinas.”

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Park has more than 20 years of experience in the financial services industry and has spent more than 15 years working exclusively in the qualified plan arena. She began her career as a financial adviser for Interstate/Johnson Lane, followed by Merrill Lynch.

Park also spent 15 years as director of sales for Morehead Plan Administrator, a TPA in Charlotte, North Carolina, where she expanded her knowledge of qualified retirement plans.

Park is a graduate of The University of Richmond, Virginia, and also attended Campbell University School of Law, North Carolina.

Compliance July 5, 2012

DOL Claims Association Received Excessive Compensation

July 5, 2012 (PLANSPONSOR.com) - The National Rural Electric Cooperative Association (NRECA) has agreed to restore $27,272,727 to three association-sponsored employee benefit plans covered by the Employee Retirement Income Security Act (ERISA).
Reported by

The agreement follows an investigation by the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) that found the association selected itself as a service provider to the plans, determined its own compensation and made payments to itself that exceeded NRECA’s direct expenses in providing services to the plans, in violation of ERISA.  

Under the terms of the agreement, NRECA will not provide administrative services to the NRECA Retirement Security Plan, the NRECA 401(k) Plan and the NRECA Group Benefits Plan without entering into a written contract or agreement with the plans that must be approved by an independent fiduciary. The independent fiduciary must determine whether the use of NRECA to provide administrative services to the plans is prudent and reasonable, determine the categories of direct expenses that NRECA may charge to the plans and the methods of calculating those expenses, and monitor NRECA’s compliance with certain terms of the agreement.   

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The agreement also provides that during a 60-month period following the implementation date, NRECA shall discount the amount of permissible direct expenses for which it seeks reimbursement from all three plans in the amount of $22,727,272. The balance of the settlement payment, $4,545,455, already has been paid directly to the NRECA 401(k) Plan.    

“This settlement sends a clear message to plan fiduciaries that they cannot profit from selecting themselves to provide services to plans,” said Phyllis Borzi, assistant secretary of labor for employee benefits security. In addition to the amounts returned to the plans, NRECA will pay $2,727,276 in civil penalties.  

Headquartered in Arlington, Virginia, NRECA is a nonprofit trade association for electric power cooperatives. The sponsored plans are open to members of the trade association as well as the association’s employees. As of 2010, the latest information available, the NRECA 401(k) Plan had 68,970 participants, the NRECA Retirement Security Plan had 64,286 participants and the NRECA Group Benefits Plan had 73,644 participants.

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