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Retirement Plan Service Provider Faces ERISA Lawsuit

Mutual of America, an insurance company that also provides services in the small-plan marketplace, has found itself in the crosshairs of an ERISA lawsuit alleging a breach of its duties of loyalty and prudence to plan participants. The plaintiffs charge that they were subject to excessive fees as a result of the company’s adoption of its own proprietary closed-architecture recordkeeping platform. The system, they allege, caused participants to pay annual administrative fees roughly 10 times what they would have if the plan had researched and engaged a third-party recordkeeper to perform comparable (or even better) services.

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When Higher Fees May Be Justified

Due to the recent uptick in 401(k) lawsuits, it could be easy to assume that the best course of action is to always obtain the lowest possible fees across the board. But at the crux of these legal actions is the supposition that fees are too high for services provided. What’s considered reasonable isn’t a set dollar amount, and a reasonable fee might not have to be the lowest available, depending on the details and needs of a plan. Here are some instances where higher fees may, in fact, be justifiable.


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Benchmarking Retirement Plans With Alternative Investments

Alternative investments are assets that don’t readily fit into traditional categories like stocks, mutual funds and bonds. Instead, they can include assets like real estate, cryptocurrency, hedge funds, venture capital, private equity and even physical commodities. Changes in underlying technologies or other market factors, such as cryptocurrency platform Ethereum’s recent “merge” update and transition to a more energy-efficient protocol, can have significant impacts on alternative investment valuations, expenses and performance over time.

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Fears, Fees and Fiduciaries

The witching hour is fast approaching, as a full, blood red moon appears low on the horizon. Creatures of the night hunt for prey while you lie awake in bed, unable to sleep. Your mind races and your pulse quickens. You can’t get the image out of your head … the shadowy figures … the relentless pursuit … not settling for anything less than the utter destruction of your retirement plan. Suddenly, you hear a knock at the door. Please don’t let it be them! No, not the lawyers!

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Don’t Practice “Check the Box” Benchmarking

You’re a successful financial pro with a growing practice, but always on the lookout for ways to build your book of business. One day, a longtime wealth management client says they’re concerned about the fees for the retirement plan they sponsor at their growing medical practice. This situation offers a great opportunity to pick up their 401(k) — and potentially the personal accounts of the doctors and staff. You’d love to be able to offer a fast benchmark, but a live bid would take too long — and it’s not what’s called for in this prospecting scenario. But now, advisors have more benchmarking options that allow them to choose the right tool for each client situation. With PlanFees, you can move beyond “check-the-box” benchmarking to a more targeted, strategic and effective approach.

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RFP Express: Real Quotes at the Speed of Light

Keeping fees reasonable is a top concern for retirement plan sponsors. Rapid and accurate fee benchmarking is one of the best ways to help make sure clients aren’t paying excessive fees — and it can serve as a valuable prospecting tool to build your book of business.

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3 Types of Fiduciary Risk and Ways to Mitigate Them

Fiduciary responsibility compels plan providers to maintain a safe, fair and prudently managed plan for participants. Advisors should communicate openly to plan sponsors about their responsibilities and risks, which can vary depending on several factors including whether they’re engaged as a 3(21) or 3(38) fiduciary. Here are three types of fiduciary risk that your plan sponsor clients should be aware of, plus some ways to help mitigate them.

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