Compliance August 19, 2016

Law Firm Files Four More Lawsuits Against University 403(b) Plans

This is the second lawsuit filed against Columbia University this week.
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The law firm of Schlichter, Bogard & Denton has filed four more lawsuits against major universities for excessive fees in its 403(b) plans.

Cornell University, Columbia University, Northwestern University and the University of Southern California are the latest targets. This is the second lawsuit filed this week against Columbia University, as another law firm filed a complaint with similar allegations.

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As with the previous lawsuits filed by Schlichter, the complaints call out the large number of investment options offered to participants, high expenses for these investment options and the use of multiple recordkeepers, resulting in duplicative expenses for recordkeeping services.

The lawsuit against the University of Southern California notes that in March 2016, the university made certain changes to its plans. It removed one of the plan’s four recordkeepers for future contributions, eliminated hundreds of mutual funds, removed certain fixed and variable annuity investment options, and froze contributions to certain other fixed and variable annuity investment options. The changes made by the university resulted in participants now being offered a total of approximately 34 investment options, rather than 340, across the plans’ three remaining recordkeepers.

However, the complaint says, despite these changes, the defendants in the case continue to include high-priced investment options in the plans, retain three recordkeepers, and continue to allow excessive recordkeeping fees to be charged to the plans. The complaint also alleges that as part of the communications about the changes to participants, the university acknowledged that the plans’ previous structure caused the plans to pay unreasonable recordkeeping and investment fees.

The Northwestern University complaint also notes that in 2016, the university eliminated hundreds of mutual funds provided to plan participants and selected a tiered structure comprised of a limited core set of 32 investment options.

Attorneys feel the distinctions between 403(b)s and 401(k)s may give 403(b)s different arguments in such lawsuits.

Deals and People August 19, 2016

Retirement Industry People Moves

Voya Hires Two New Leaders; PCS Hires New Regional VP; and Segal Group Announces New Senior Vice President.
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Voya Hires Two New Leaders

Voya Financial, a retirement products and services provider, has hired Miles Edwards as its senior vice president and leader of operations for its retirement business.

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Michele White will join the company as senior vice president and leader of its Enterprise Contact Centers, effective September 6.  

In his new role, Edwards will be responsible for all functions supporting Voya’s corporate and tax-exempt markets retirement plan segments, as well as its retail phone-based investor channel and the Voya Financial Advisors broker-dealer operations.

Prior to Voya, Edwards served as senior vice president of the FASCore operations of Great-West Financial doing business as Empower Retirement. He led all administration and operations services. During his 20 years with Empower, Edwards oversaw various components including participant call center activities, transaction processing and plan implementation. He holds a master’s degree in business administration from Vanderbilt University and a bachelor’s degree from Bates College.

White will be responsible for strategy, processes and performance management across all customer service access points.

She comes to Voya from Mass Mutual Financial Group, where she most recently served as vice president of client services and senior leader of its West Coast operations. In this role, she managed an organization of more than 500 customer associates. White oversaw call centers, interactive voice response (IVR) correspondence, tax reporting and more. She earned a master’s degree in business administration from Western New England University and a bachelor’s degree from Charter Oak State College.

Edwards and White will be based in Voya’s Windsor, Connecticut, office and report to Nan Ferrara, senior managing director of Operations for Voya Financial.

NEXT: PCS Hires New Regional VP

PCS Hires New Regional VP

PCS, a fiduciary recordkeeper, announced that Karen Benewith has joined the team as vice president of sales for the Western region. Benewith replaces Jordan Migneault, who will return to the company's Philadelphia headquarters and serve as executive vice president of client experience.

"We are thrilled to have Karen Benewith join our sales team," said PCS CEO Mark Klein. "She knows the retirement plan business and she understands the needs of our adviser and plan sponsor clients. Our business approach demands the highest level of service and expertise, and Karen is a great fit."

Benewith has more than 20 years of experience in management, client services, and business development in a number of industries. She spent the last six years working as a retirement consultant with Schwab. Benewith holds FINRA Series 7, 66 and 9/10 securities licenses. She has also earned the Qualified 401k Administrator (QKA) and Qualified Plan Financial Consultant (QPFC) designations from the American Society of Pension Professionals and Actuaries (ASPPA), as well as the Accredited Investment Fiduciary (AIF) designation from fi360.

"I am excited for the opportunity to work for a quality plan provider that prides itself on offering a complete and sophisticated retirement solution,” says Benewith. “PCS has a great story to share and offers plan sponsors and advisers state-of-the-art tools and top-notch fiduciary support. Reputation and outstanding product offering were a huge factor in my decision to join PCS."

NEXT: Segal Group Announces New Senior Vice President

Segal Group Announces New Senior Vice President

Segal Group President and CEO, Joseph A. LoCicero has announced that Daniel A. Levin has joined the firm as its new senior vice president and health actuary.

Levin brings more than 20 years of experience in health care consulting, business development and client-relationship management. He has overseen matters affecting employer-sponsored medical, drug, disability and paid time-off benefit programs. He has also worked with active, non-Medicare retiree and Medicare retiree issues. He specializes in Affordable Care Act strategic analyses, as well as modeling for employers, valuations of other post-employment benefits (OPEB), and retiree health design strategy, Segal Group says. 

 

- Javier Simon and Amanda Umpierrez

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