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SEI Investments Agrees to Settle ERISA Self-Dealing Suit
In addition to a $6.8 million payment, defendants in the lawsuit agreed to certain procedures for plan management, including that the plan committee will be trained on Employee Retirement Income Security Act (ERISA) fiduciary duties.
SEI Investments Company has entered into a settlement agreement to resolve claims in an Employee Retirement Income Security Act (ERISA) self-dealing lawsuit.
According to the Settlement Agreement, the defendants will pay $6.8 million to a Qualified Settlement Fund.
In addition, SEI agrees that the following procedures shall apply to the management of its 401(k) plan on a prospective basis for a period of no less than three years beginning no later than the settlement effective date:
- Defendants shall retain the services of an unaffiliated investment consultant to provide an evaluation of the design of the plan’s investment lineup and to review the plan’s investment policy statement;
- SEI shall continue to pay all recordkeeping fees associated with the plan that it is currently paying and that would otherwise be payable from plan assets; and
- SEI shall ensure that all of the plan’s investment committee members will participate in a training session on ERISA’s fiduciary duties.
The lawsuit claims the defendants offer “only designated investment options that generate fees for SEI and its affiliates and treat the plan as a captive customer of SEI in order to prop up SEI-affiliated investment products and advance SEI’s business objectives.”
The complaint further states that SEI investment products “are not competitive in the marketplace.”
“Participants would have been better served if defendants had investigated and retained non-proprietary alternatives,” the complaint states.
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