A federal judge has allowed an Employee Retirement Income Security Act lawsuit to procced.
The lawsuit against the Wake Forest University Baptist Medical Center, the board of directors of the University Baptist Medical Center, the retirement benefit committee and 30 unnamed individuals survived the defendants’ motion to dismiss, according to the order from District Court Judge William Lindsay Osteen, Jr., of the U.S. District Court for the Middle District of North Carolina.
“This court finds Plaintiffs should be afforded an opportunity to conduct discovery” as to whether participants were harmed because of high-cost mutual funds, Osteen Jr. wrote.
Defendants previously alleged—in the original and amended complaint—that the 403(b) university plan was mismanaged by plan fiduciaries because it was filled with excessive-fee investments, that the plan fiduciaries misused revenue sharing to pay for administrative expenses and that they failed to conduct periodic bids to the market to ensure that the recordkeeping and administrative costs remained competitive.
The defendants had sought to dismiss plaintiffs’ claims on the grounds of failure to state a claim and failure to state a claim upon which relief can be granted, according to the judge’s order.
The plaintiffs are former plan participants, according to court documents. The plaintiffs have alleged that because of the size of the Wake Forest University Medical Center 403(b) plan in 2019—$1.8 billion in retirement plan assets for 19,000 participants—the plan qualifies as a “jumbo” plan and as such plan fiduciaries should have been able to secure lower-fee arrangements with service providers.
Plaintiffs alleged that many of the mutual funds in the Wake Forest Baptist Medical Center 403(b) Retirement Savings plan were more expensive than comparable funds common to similarly sized plans with more than $1 billion of assets. For example, the defendants stated that the plan’s investment expense ratios for funds were up to 280%, in one case, and 273%, in another—higher than median expense ratios for funds in the same investment category.
TIAA is the plan’s recordkeeper and Capital Group’s American Funds provided target-date investments for the 403(b) plan.
A request for comment to the Wake Forest University Baptist Medical Center was not returned.
Buck appoints U.S. regional market leaders; Pacific Life announces new head of defined contribution lifetime income;Dorsey & Whitney names new partner; and more.
Pacific Life Announces New Head of Defined Contribution Lifetime Income
Pacific Life has named Michael Oler as head of defined contribution lifetime income for Pacific Life’s Institutional business. He will report to senior vice president and head of institutional customer solutions group Paul Hance.
Oler’s entire career has been in the financial services industry. After earning his bachelor’s in economics from Rutgers University, he began his career at PricewaterhouseCoopers, where he was responsible for the administration and recordkeeping of 401(k) plan clients.
Oler then served as a director at MetLife, where he led project management for new product implementations and strategic partnerships for their institutional income annuities business. Later, he joined BlackRock as a director, and was responsible for the product development and implementation of BlackRock’s retirement income strategies in both the defined contribution and retail adviser channels. Most recently, Oler served as retirement income product manager at T. Rowe Price, where he partnered with investments, distribution and marketing to develop and launch retirement income solutions.
Buck Appoints U.S. Regional Market Leaders
Buck, an integrated human resources, pensions and employee benefits consulting, technology and administration services firm, has announced the appointment of market leaders in three U.S. growth markets.
Brandon Bentz has been appointed as Philadelphia/Washington, D.C. market leader. Bentz has more than 20 years of experience in business development and sales operations and will continue to serve as adviser relations leader.
Jessica Strzepek will serve as New York/New England market leader. Strzepek joins Buck from Korn Ferry, where she served as client director, managing leadership development initiatives for Fortune 500 companies and leading a team of business development managers.
Tonia Vetter will serve as Southeast market leader. She joins Buck from Mercer, where she was responsible for client delivery excellence and satisfaction. With more than 20 years of experience as a health and benefits consultant, Vetter has helped clients implement innovative health care strategies to optimize their spending and improve outcomes for plan members.
Northern Trust Creates New Digital Assets and Financial Markets Group Leadership Role
Northern Trust has announced the appointment of Michael Buzza as global head of network management and market strategy. Buzza, previously Europe, the Middle East and Africa head of market advocacy and innovation research, will oversee the teams dedicated to providing market access and insights across the traditional securities services markets within the digital assets and financial markets group.
Over the course of 16 years at Northern Trust, Buzza has led strategic agent bank provider selection and was instrumental in a strategic investment in Zodia Custody, an institutional-grade crypto-asset custody solution created in conjunction with Standard Chartered.
PGIM Quantitative Solutions Makes Senior Appointment, Promotion
PGIM Quantitative Solutions, the quantitative and multi-asset solutions specialist of PGIM, has announced the appointment of Cyrus Cottin as head of international distribution, and the promotion of Pam Clancy to head of global consultant relations, effective immediately.
Based in London, Cottin reports to Brian Carroll, PGIM Quant’s head of global distribution. In his role, Cottin is responsible for developing and leading PGIM Quant’s distribution strategy across Europe and the Asia-Pacific region, as well as driving the expansion across both existing and new relevant markets. Cottin will support distribution efforts across the firm’s three key investment platforms: Quantitative Equity, Multi Asset and PGIM Wadhwani.
Cottin joins from Eastspring Investments, where he was director of distribution, Europe and the Middle East. Prior to this, he was head of distribution, Switzerland, France and Germany, for BrightSphere Investment Group, and held business development roles at Amundi ESG and Amundi Alternative Investments.
Reporting to Carroll, Clancy oversees a team of five, based across San Francisco, the Midwest, Newark and London. She is responsible for coordinating all global consultant activities and deepening relationships in the consultant community. Based in Newark, New Jersey, Clancy was previously head of US Consultant Relations.
PGIM Quant also recently appointed London-based Apostolos Katsaris as senior client portfolio manager for the PGIM Wadhwani liquid-alts platform.
Dorsey & Whitney Names New Partner
International law firm Dorsey & Whitney LLP has announced that David Tang has joined the firm as a partner in the investment management practice in New York.
Tang provides regulatory compliance advice to investment advisers, including private fund managers. He assists managers with the design and implementation of best practice compliance policies and procedures covering topics such as personal trading, marketing, insider trading, expert networks, alternative data, best execution, soft dollars, investment allocation, expense allocation, valuation, cross trades, short sales, conflicts of interest, privacy, business continuity, cybersecurity and recordkeeping.
Tang has successfully represented numerous investment managers through the SEC examination process. He also helps investment advisers prepare for SEC examinations by conducting privileged and confidential mock audits. Tang prepares and advises managers on compliance with new rules, such as the SEC’s new marketing rule. He regularly advises investment managers on SEC registration and available exemptions. In addition to regulatory compliance, Tang has deep experience in the formation and representation of private funds.
Tang joins Dorsey from the Investment Management Group of Seward & Kissel LLP, where he founded and led the firm’s regulatory compliance consulting business, providing legal counsel and outsourced support to investment managers. David received his J.D. from UCLA School of Law and his B.A. in economics and history from Binghamton University.
