Compliance May 9, 2014

New Mexico Bank Settles EEOC Suit

May 9, 2014 (PLANSPONSOR.com) – BOK Financial Corporation will settle a lawsuit brought by the U.S. Equal Employment Opportunity Commission (EEOC), which alleged discrimination based on both age and gender.
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The Albuquerque, New Mexico-based BOK, which does business as the Bank of Albuquerque, will pay $230,000 and furnish other relief under the settlement. Besides the monetary relief, BOK has also agreed to refrain from any future discrimination; post an anti-discrimination notice; provide staff training; and to report to the EEOC on its compliance with these terms.

The EEOC originally filed its suit, EEOC v. BOK Financial Corporation dba Bank of Albuquerque, (CV 11-01132-ALB-RCB-LAM), in 2012 with the U.S. District Court for the District of New Mexico in Albuquerque (see “EEOC Alleges Bank Fired Employees Due to Age and Gender”).

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The suit alleged that the bank fired two managers, Elizabeth Morantes and Yolanda Fernandez, who were long-time employees, because of their gender and because they were over 40 years of age. The EEOC said the bank’s purported reasons for firing the women were based on criteria that were not applied to younger male managers and employees.

Such alleged conduct violates Title VII of the Civil Rights Act, which prohibits discrimination on the basis of sex, as well as the Age Discrimination in Employment Act, which bars discrimination on the basis of age, for those 40 and older.

Investing May 9, 2014

Another Light Trading Month for DC Participants

May 9, 2014 (PLANSPONSOR.com) – Aon Hewitt’s 401(k) Index shows April was another light trading month for defined contribution (DC) plan participants.
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For April, the average daily transfer volume stood at 0.024% of participant balances. While this value is slightly higher than March’s value of 0.021%, it is well below historical daily levels, according to the index.

Since Aon Hewitt began tracking this data in 1997, average monthly trading activity has been close to 0.05%, but April marked the sixth consecutive month that trading activity was below 0.03%. Total transfer activity across the index was $349 million (0.22%), with two days in April showing above normal activity.

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In this context, a normal level of relative transfer activity is defined as when the net daily movement of participants’ balances as a percent of total 401(k) balances within the index equals between 0.3 times and 1.5 times the average daily net activity of the preceding 12 months.

The index also reveals that when net transfers occurred, DC plan participants favored fixed-income funds for 67% of trading days in April, up from 57% in March. Overall, net transfer activity moved away from diversified equities (i.e., equity assets excluding company stock) by $49 million, or 0.03%.

In April, the index indicates that the asset classes that experienced net inflows included bond funds, with gains of $120 million (34%), and international funds, with a gain of $111 million (32%). Next in line were large U.S. equity funds and specialty/sector funds, both with about $35 million (10%) of the monthly inflows. Company stock funds again topped the net outflow activity, with $203 million (58%) transferring out, followed by small- and mid-U.S. equity funds, with $74 million (21%) and $57 million (16%), respectively, transferring out.

On average, participants’ overall equity allocation remained at 65.4% at the end of April, virtually unchanged from the March value of 65.5%. Employee contributions to equities declined slightly from 66.6% in March to 66.1% in April.

U.S. equities, as measured by the S&P 500 Index, started the second quarter of the year out on a positive note, returning 0.7% during April. Non-U.S. equities also posted gains during the month. The MSCI All Country World ex-U.S. Index returned 1.4% during April. Although they underperformed the developed markets, emerging markets also increased during April, gaining 0.4% during the period. The fixed-income market rebounded from a poor March, returning 0.8% in April as the 10-year Treasury yield decreased slightly to 2.65%.

More information about the April results of the index can be found here.

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