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Massachusetts Sent Lump Sum Match Inquiries to Wrong Providers

Concerned that participants are being shortchanged by the practice of lump sum, end-of-year payment of matches (brought to light by AOL’s recent misfire), Massachusetts’ Secretary of the Commonwealth and chief securities regulator William F. Galvin sent a note to what he thought were the top 25 DC record keepers to determine how many people have been affected. The problem is that many of those providers do not currently offer those services and therefore will not be able to respond. In addition, many of the larger record keepers were not contacted.

Firms which have never offered record keeping or exited the business years ago that were contacted by Galvin’s office include BlackRock, State Street, Invesco, Legg Mason, Ameriprise and Galliard; while large DC record keepers like TIAA-CREF, Aon Hewitt, Great West, Wells Fargo and Xerox (formerly ACS/Mellon) were not. Fidelity, who was contacted, commented that only a small percentage of their 20,000 plans made the switch to lump sum, end-of-year payments.

For other states looking at the same issue, we offer NAPA Net’s list of DC record keepers as a guide.

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