Products December 22, 2006

AXA Equitable Releases Fiduciary Info Product

AXA Equitable has unveiled the Fiduciary Toolkit, a resource available through its Retirement Strategies 401(k) product aimed at helping small to mid-size defined contribution plan administrators manage their fiduciary obligations.
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A news release said the Fiduciary Toolkit and its companion CD guide contain required forms and to-do checklists. The new offering guides plan fiduciaries through their obligations on:

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  • naming a fiduciary,

  • selecting plan providers,

  • plan design,

  • a model investment policy statement,

  • election of Employee Retirement Income Security Act (ERISA) 404(c),

  • employee communications,

  • employee education, and

  • investment review.

According to AXA Equitable, the new offering is designed to help those running small and mid-size plans avoid 10 common fiduciary problems, including not:

  • documenting fiduciary decisions,

  • maintaining supporting documentation related to the plan’s investment, administration, monitoring and management,

  • interviewing and gathering all the facts necessary to a make prudent decision regarding the choice of the service provider,

  • interviewing and gathering all the facts necessary to understand the fee arrangements regarding the plan, its service providers and its investments,

  • monitoring the service providers and revisiting the choices of those providers,

  • bidding out the job for service providers and documenting that process,

  • clearly understanding the various responsibilities of service providers,

  • forwarding employee contributions within a reasonable amount of time,

  • understanding the interrelationships of service providers and who is providing what services, and

  • clearly understanding what the plan is invested in, especially if the plan is using investment options such as hedge funds and financial derivatives.

More information about the company is at http://www.axa-equitable.com/.

Compliance December 22, 2006

Deutsche Asset Management Settles Alleged Market Timing Accusations

Deutsche Asset Management (DeAM) confirmed Thursday that it has settled proceedings with the Securities and Exchange Commission (SEC) and New York Attorney General Eliot Spitzer related to alleged improper market timing accusations against Deutsche Asset Management Inc. and Deutsche Investment Management Americas Inc., the investment adviser to many of the DWS Scudder Funds.
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According to a Deutsche news release, the firm is settling with Spitzer and the SEC under two separate proceedings. Under the terms of the settlement with Spitzer, Deutsche has consented, without admitting or denying any wrongdoing, to a payment of approximately $122 million, including approximately $102 million in disgorgement and/or restitution and a civil money penalty in the amount of $20 million. Under the SEC settlement, Deutsche has consented, without admitting or denying any wrongdoing, to disgorgement and/or restitution and a civil money penalty in the amount of $17 million, which will be deemed to be paid through the payments made under the Spitzer settlement.

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Deutsche said approximately the entire $122 million will be distributed for the benefit of shareholders of the affected funds in accordance with a plan to be developed by a distribution consultant. The announcement pointed out the alleged arrangements originated in businesses that existed prior to the current Deutsche organization and were terminated prior to the investigations, which began in the summer of 2003.

In addition to the payments, Deutsche has agreed to certain business changes, including, among other things, maintaining existing management fee reductions for certain funds for a five year period and the formation of Code of Ethics Oversight and Internal Compliance Controls Committees, the release said. Deutsche also said it continues to discuss a settlement with the Illinois Secretary of State regarding market timing matters and expects the settlement to provide for investor education contributions totaling approximately $4 million and a payment in the amount of $2 million to the Securities Audit and Enforcement Fund.

In January, Deutsche announced it was close to a settlement with Spitzer and the SEC and predicted the settlement would cost $134 million. The companies involved were accused of allowing market timing in the Scudder Funds and not using sufficiently strong measures to prevent the abusive trading practices during the 1999 to 2001 period.

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