Another financial services firm has agreed to some procedural changes and a monetary settlement regarding the proprietary funds it offered in its own 401(k) plan.
The $6.8 million settlement (ostensibly net of $2.2 million in attorney fees, named plaintiff award and costs) will be spread over about 5,600 current and former participants.
The settlement, which requires court approval, also noted that SEI must “ensure that investment committee members participate in a training session on ERISA's fiduciary duties” and will retain the services, for at least three years, of an “unaffiliated investment consultant to provide an evaluation of the design of the plan’s investment lineup and the review the plan’s investment policy statement.”
SEI also agreed to pay all plan recordkeeping fees, rather than paying them from plan assets, for at least three years.
The suit – typical with the plethora of proprietary fund suits filed over the past couple of years – alleged that the defendants “use the Plan to serve their own interests,” offer participants 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 settlement was announced in mid-May, just before the suit was slated to go to trial.
This is the latest in a long list of financial firms settling such claims, including MFS ($6.875 million), Eaton Vance ($3.45 million), Franklin Templeton ($4.3 million), BB&T ($24 million), Jackson National ($4.5 million), Deutsche Bank ($21.9 million), American Airlines Group Inc. ($22 million), Allianz SE ($12 million) and TIAA ($5 million).