Compliance April 24, 2013

Doctor Pleads Guilty to 401(k) Embezzlement

April 24, 2013 (PLANSPONSOR.com) – A doctor and owner of two medical facilities pleaded guilty to embezzlement from an employee benefit plan.
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The United States Attorney’s Office for the Middle District of Pennsylvania announced that Timothy Clark pleaded guilty on April 22 in federal court in Harrisburg, Pennsylvania, before U.S. District Judge Christopher C. Conner. Clark, who is the sole owner of Central Pennsylvania Pulmonary Associates (CPPA) and Sleep Disorder Centers of Central Pennsylvania, pleaded guilty to embezzlement from an employee benefit plan, executing a scheme to defraud health care benefit programs in connection with the delivery and payment of healthcare benefits and money laundering.

Clark is scheduled for sentencing on July 29, 2013.

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In June 2012, Clark was indicted on charges that from July 2010 through December 2011, as CPPA’s owner and trustee of the company’s 401(k) plan, he withheld employee 401(k) contributions and failed to deposit the withheld funds into their 401(k) plan. Clark instead maintained the employee 401(k) contributions in bank accounts that he controlled, causing his employees to lose approximately $25,000 of their retirement funds.

In July 2012, Clark was indicted on charges that from December 2007 through September 26, 2008, Clark, who provided critical care services to patients of Holy Spirit Hospital, intentionally inflated the amount of time the health care providers he employed spent with each patient, thereby fraudulently inflating the health insurance claims he submitted to Medicare, Highmark, Inc., and Capital Blue Cross. The dollar amount of the fraudulent claims exceeded $500,000. In the indictment’s six money laundering counts, Clark was charged with transferring approximately $103,000 obtained through the health care fraud to CPPA payroll and money market accounts.

Both cases are being prosecuted by Assistant United States Attorney Joseph J. Terz. 

Benefits April 24, 2013

Sponsors Still Need Convincing About Certain Plan Features

April 24, 2013 (PLANSPONSOR.com) - When interpreting how plan sponsors would describe the primary objective for their retirement plans, creating a secure retirement and offering a competitive benefit program were most often cited by advisers surveyed.
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According to the “2012 Perspectives Study: Retirement Plan Consultants” by Oculus Partners, plan sponsors are slowly warming up to the idea of addressing retirement income readiness for their participants; some are already taking real steps to initiate programs that address this issue.   

However, plan sponsors have not yet developed a philosophy about retaining participants in the plan post-retirement. Consultants said HR and Finance departments have differing views about this issue, and other than fee leverage, providers have not made a compelling argument either way.  

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Plan sponsors have not yet developed an interest in getting external qualified assets into the plan and keeping assets in the plan post-retirement. Oculus said this may reflect both sponsor and consultant views as to the benefits of these actions, as well as the inherent conflict many providers have between their IRA businesses and their plan businesses.

The survey also found that providers still have a task ahead to convince plan sponsors that more advanced automatic programs are both philosophically sound and not cost prohibitive.  

The number of investment vehicles and the types of investment service platforms continue to expand, but although the popularity of exchange-traded funds (ETFs) is growing in the retail wealth management market, there is still little interest among retirement plan advisers.   

Nearly 95% of consultants indicated that target-date funds were the qualified default investment alternative (QDIA) used by clients and, as such, have a prominent role in investment menu construction. Beyond that, responses indicated that simplified menus that are broad enough to cover most asset classes were also critical.  

Winning recordkeeping mandates does not appear to automatically drive investment management opportunities, according to the survey responses. Each must be won on its own merits.    

The study is available for purchase. More information is at www.oculuspartners.com.

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