Tag Archives: 401(k)

ILN Today Post

Revenue Sharing: Risks, Rewards, and Reality for Plan Fiduciaries

Practically all companies that sponsor a 401(k) plan hire a third party to administer and recordkeep their plan. These third party administrators, or “TPAs,” offer different kinds of service packages. The most commonly used is the “bundled service arrangement” under which a TPA provides a variety of plan-related services for one fee. Under most bundled service arrangements, this fee is paid partially or entirely through “revenue sharing,” which refers to payments made to the TPA by some of the mutual funds that are made available under the plan. Many plan sponsors prefer bundled service arrangements because they don’t have to negotiate a fee for each service the TPA provides and because fees are paid through revenue sharing (i.e., fees do not have to be paid by the plan sponsor or charged directly to participant accounts).

Read More

Read full article

Employee Benefits Alert: Plan sponsors of ESOPs and 401(k)s take note

On February 22, 2012, the Sixth Circuit issued a ruling in Pfeil v. State Street Bank and Trust Co., reversing the district court’s dismissal of the case and allowing it to proceed. In so doing, the Sixth Circuit held that the Kuper/Moench presumption of prudence does not apply at the motion to dismiss stage, and that ESOP fiduciaries must do more than allow participant control over a variety of investment options in order to rely on the ERISA Section 404(c) safe harbor defense. These holdings by the Sixth Circuit distinguish it from the rulings of other Circuit Courts, and include potential lessons to be learned by ESOP and 401(k) fiduciaries. 

Read full article