Products April 8, 2020

Nationwide Joins List of Providers Offering CARES Act-Related Help to Participants

The retirement plan provider is waiving fees and accelerating transaction processing for those taking withdrawals or loans related to the COVID-19 pandemic.

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Individuals seeking to access their retirement savings to help get through repercussions of the COVID-19 pandemic are getting some help from Nationwide, as a result of the recently enacted Coronavirus Aid, Relief and Economic Security (CARES) Act.

The company says it will waive or reimburse any Nationwide-imposed fees for loan initiation, distributions or hardship withdrawals. For those participants in plans that adopt provisions of the CARES Act, the fee waiver is effective from March 27 through September 30.

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Nationwide’s retirement plan business has also elevated and accelerated processes to respond to customer needs and is ready to provide participants with educational resources to help them determine whether retirement plan withdrawals or loans are the best option for their families.

“We stand ready to help individuals make the best choice for their financial futures in these difficult times,” says Nationwide Retirement Plans President Eric Stevenson. “Our highly experienced staff is prepared to deliver extraordinary care to participants, assisting them with their COVID-19 related distribution requests and also helping them understand the long-term impact these provisions may have on their retirement savings and future financial well-being.”

For participants who want to learn more about these provisions, information is available at https://www.nationwide.com/personal/bulletin/cares-act.
Compliance April 8, 2020

Parties in JPMorgan Self-Dealing Suit Reach Settlement

The lawsuit alleged plan fiduciaries acted for their own benefit by forcing participants to choose among costly investments managed by JPMorgan and BlackRock.

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In a letter from attorneys for the defendants, a federal judge was informed that all parties have reached an agreement to settle a lawsuit alleging self-dealing by fiduciaries of JPMorgan’s 401(k) plan.

“We represent defendants in the above-referenced action, and write jointly with plaintiffs to notify the court that plaintiffs and defendants have reached an agreement in principle to settle this action on a class-wide basis,” the letter states.

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JPMorgan Chase Bank was hit with a string of proposed class action lawsuits in early 2017, with this one filed in January of that year, alleging similar allegations. Plaintiffs argued the company’s 401(k) plan fees were not properly controlled and that conflicts of interest damaged net-of-fee performance.

“Plan’s fiduciaries breached their duties of loyalty and prudence to the plan and its participants by failing to utilize an established systematic review of the investment options in its portfolio to evaluate them for both performance and cost, regardless of affiliation to JPMorgan Chase. … This failure to adequately review the investment portfolio of the plan led thousands of plan participants to pay higher than necessary fees for both proprietary investment options and certain other options for years,” the original complaint stated. The text of the lawsuit dives into detail of the retirement plan’s investment menu, suggesting prudent plan fiduciaries would have moved to replace a number of proprietary investment options with alternatives from the wider market.

The lawsuit alleged plan fiduciaries larded the plan with proprietary fund investment options that charged excessively high fees that inured to the benefit of affiliates of JPMorgan and one of JPMorgan’s closest business partners, BlackRock Institutional Trust Co. It argued that, instead of acting for the exclusive benefit of the plan and its participants and beneficiaries, plan fiduciaries acted for the benefit of themselves by forcing participants to choose among costly investments managed by JPMorgan and BlackRock.

According to the letter, “The parties anticipate that they will finalize the settlement agreement and submit a motion for preliminary approval of the settlement by May 22, 2020.”

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