Products June 9, 2021

Alegeus Announces Launch of New HSA Solution

Its features include fractional trading up to eight decimal points, auto-rebalancing and real-time account opening and trading. 

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Alegeus has announced that it will launch its modern health savings account (HSA) solution at the 2021 Alegeus Client Success Summit on June 15 and 16.

An extension of the Alegeus HSA experience, the investment solution features real-time and fractional trading, a fully automated robo adviser, and a range of investing models for every investor experience level. The product will be powered by DriveWealth, a cloud-based brokerage infrastructure firm.

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The solution will feature a fully embedded investment experience, available on both mobile and desktop, that is native to the Alegeus platform and does not require redirecting consumers to a partner site. Other features include managed, self-directed and brokerage investing models; exchange-traded funds (ETFs); fractional trading up to eight decimal points; auto-rebalancing; and real-time account opening and trading.

Consumers can expect to receive alerts when they’re eligible to invest and will be able to open an investment account immediately upon eligibility.

“We’re proud to disrupt the HSA market with a true health and wealth experience that will serve as a differentiator for our clients in an increasingly competitive space,” says Mark Waterstraat, chief customer officer at Alegeus. “This new investment solution is one part of a broader series of HSA enhancements that will allow our clients to compete in the market with a value-differentiated, best-in-class HSA solution.”

Compliance June 9, 2021

Estee Lauder Excessive Fee Suit Moves to Pretrial Conference

A district court judge has denied the defense’s motion to dismiss without offering any explanations for his reasoning in court documents.

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Judge Jesse Furman of the U. S. District Court of the Southern District of New York has denied the defense’s motion to dismiss an excessive fee case filed against cosmetics company Estee Lauder and ordered it to file an answer to the amended complaint no later than June 28. The two-page court order doesn’t offer any reasoning for the denial.

Of note, the court allowed the parties to redact narrow references to recordkeeping fees from their memoranda of law, without giving a reason as to why. It said the redacted information played little to no role in the court’s decision. Furman said the court would explain the reasons for denying the motion to dismiss at an initial pretrial conference to be held next month.

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The original lawsuit, which was filed against Estee Lauder, its board of directors and the retirement plan’s investment committee, accused  the defendants of breaching their fiduciary duties under the Employee Retirement Income Security Act (ERISA) by failing to prevent the plan from paying lower investment and recordkeeping fees. The plaintiffs claimed the defendants failed to objectively and adequately review the plan’s investment portfolio with due care to ensure that each investment option was prudent, in terms of cost, and maintained certain funds in the plan despite the availability of identical or materially similar investment options with lower costs and/or better performance histories.

The lawsuit also said that from 2014 to 2018, the private label collective investment trust (CIT) target-date funds (TDFs) and other active funds in the plan charged “grossly excessive fees” and that there were comparable or superior choices available. Further, the lawsuit charged that the plan’s fiduciaries didn’t track recordkeeping expenses, including direct compensation and revenue-sharing, and that the plan had not issued any requests for proposals (RFPs) to benchmark the recordkeeping fees since 2014.

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