Taking a page from an earlier 403(b) university excessive fee settlement, the Schlichter law firm has made a new allegation of fiduciary breach in a 401(k) suit – the unauthorized use of participant data.
More specifically, the recent suit against Shell Oil defendants noted that “Plan participants have an expectation that their Confidential Plan Participant Data will be protected by the Plan sponsor and not disclosed outside of the Plan for nonplan purposes, such as allowing the Plan’s recordkeeper to proactively solicit participants to invest in retail financial products and services” – and then argued that the use of that data by the plan’s recordkeeper “…to solicit the purchase of nonplan retail financial products and services” constituted a breach of their fiduciary duties to the plan/participants.
Setting aside the legality of that argument, it’s clear that there is, and should be, a great deal of sensitivity regarding the use of participant data. This week, we’d like to know if this issue has arisen with your plan sponsor clients, how your recordkeeper partners view the issue, and what position, if any, you/your firm has taken on the issue.
Reply to this week’s NAPA-Net Reader Poll at https://www.research.net/r/SMH6V96.
And we’ll have the “participant” data summed up for you on Friday!
