Products November 29, 2010

Putnam Cuts Expense Ratios on Absolute Return Funds

November 29, 2010 (PLANSPONSOR.com) - Putnam Investments and the Board of Trustees of the Putnam Funds announced that the total expense ratios across its four Absolute Return Funds have been reduced by as much as 54%.
Reported by

Since the Absolute Return Funds are included as underlying investments in the Putnam RetirementReady Funds, the firm’s suite of 10 target-date/lifecycle retirement funds, the expenses for those funds also have been reduced, by as much as 24%.  

According to the announcement, the new total expense caps, which limit recurring costs such as management and service fees, were implemented retroactive to November 1, 2010, to align with the beginning of the new fiscal year of the Absolute Return Funds.  

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

The new total expense caps are: 

  • Absolute Return 100 Fund – 0.40% of fund average net assets; 
  • Absolute Return 300 Fund – 0.60%; 
  • Absolute Return 500 Fund – 0.90%; and 
  • Absolute Return 700 Fund – 1.10%. 

 

The total expense caps represent a contractual obligation of Putnam to limit the Funds’ total expenses through at least February 28, 2012.  

The company said nearly 9,000 financial advisers from more than 500 broker-dealers use the Absolute Return Funds in portfolio construction. A recent Putnam national survey of 256 financial advisers about their views on absolute return strategies found growing understanding and use of these strategies.   

Three in five advisers surveyed (59%) were likely or certain to recommend them to their clients. The same number (59%) said that a major strength of absolute return funds was their ability to help minimize portfolio volatility, and 37% saw them as an effective hedge against inflation.   

For more information, visit http://www.putnam.com.
Compliance November 29, 2010

DoL Sues Trustee for Misuse of Plans’ Assets

November 29, 2010 (PLANSPONSOR.com) - The U.S. Department of Labor has sued trustee Colette Mordo for alleged misuse of more than $4.6 million in plan assets of the Sadimara Knitwear Inc. and the Stallion Knits Ltd. defined benefit pension plans.
Reported by

The suit, filed in the U.S. District Court for the Southern District of New York, alleges that Colette Mordo authorized the plans to make improper loans and transfers of plan assets over several years to parties in interest, including members of the Mordo family, and two other companies Mordo owned.  The loans and transfers from both plans amounted to more than $4.6 million.    

According to a news release, the lawsuit states that Colette Mordo, husband Matthew Mordo and son Alan Mordo were all participants in the plans, as were employees, officers and/or owners of the companies, which makes them parties in interest with respect to the plans.  Matthew and Alan Mordo are both deceased.  Colette Mordo also had ownership in two other companies, International Design Concepts LLC and Apparel Group International LLC, which are parties in interest because of her ownership.  

Get more!  Sign up for PLANSPONSOR newsletters.

The suit alleges that, between 2002 and the present, plan trustees and fiduciaries, including Colette Mordo, excluded eligible employees from participation in the plans and/or otherwise interfered with eligible employees’ ability to accrue benefits under the plans.  In addition, the suit alleges that she allowed participants who received benefit distributions from the plans to be paid less than they were entitled to receive.  

The news release said the suit asks the court to order Colette Mordo to restore all losses incurred by the plans, plus lost opportunity costs that resulted from her improper actions, and to permanently bar her from serving as a fiduciary to any ERISA-covered plan in the future.  The suit also asks the court to appoint an independent fiduciary to administer these plans and to order the plans to offset any benefits owed to Colette Mordo against the amount she owes the plans.

«