Products April 20, 2020

BrightPlan Offers Financial Wellness Platform at No Cost During Pandemic

Everyone needs to review their budget and financial goals in light of economic uncertainty and the recent stock market correction, BrightPlan says.

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BrightPlan, a financial wellness benefits provider, announced it is making its platform available at no cost during the coronavirus crisis to companies with more than 1,000 employees.

One tangible measure of heightened financial anxiety is that employees are checking their retirement portfolios three times more than normal, according to BrightPlan data. Working with employers, BrightPlan has also found that employees look to their employers for financial guidance during periods of economic uncertainty.

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This initiative is intended to assist employers in helping their employees make good financial decisions during the economic upheaval resulting from the coronavirus outbreak. Everyone needs to review their budget and financial goals in light of economic uncertainty and the recent stock market correction, BrightPlan says.

Its goals-based financial wellness platform addresses each aspect of personal finance—budgeting, spending, savings, debt management, investing, insurance and estate planning. BrightPlan delivers certified fiduciary advice through its mobile app, integrated with experienced financial advisers, enabling employers to make this benefit available immediately to their employees.

The firm says its budgeting and financial planning capabilities can be particularly useful in calculating the benefit of government assistance programs, which include the temporary suspension of mortgage and student loan payments, the deferral of federal and state tax payments, and penalty free withdrawals from individual retirement accounts (IRAs) and defined contribution (DC) retirement plans.

“BrightPlan’s financial wellness solution helps employees gain clarity and control of their personal finances during a period of uncertainty,” says Marthin De Beer, founder and CEO of BrightPlan. “For employers, reducing financial stress helps their employees stay focused, which helps organizations achieve their objectives. This is a moment that matters to employees. Providing comprehensive financial wellness support immediately for employees is a way for employers to act now without having to worry about budgets.”

More information about BrightPlan is at https://www.brightplan.com/connect-with-us.
Compliance April 20, 2020

Parties Assent to $12.5M Settlement of Putnam ERISA Lawsuit

Under the terms of the proposed settlement, Putnam will pay $12.5 million into a common fund for the benefit of settlement class.

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The parties in the Employee Retirement Income Security Act (ERISA) lawsuit known as Brotherston v. Putnam have reached a proposed settlement.

The case has been playing out in the U.S. District Court for the District of Massachusetts.

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According to the text of the settlement agreement, the settlement resolves the plaintiffs’ class action claims against a number of Putnam defendants, including Putnam Investments LLC, Putnam Investment Management LLC, Putnam Investor Services Inc., the Putnam benefits investment committee and the Putnam benefits oversight committee.

Under the terms of the proposed settlement, Putnam will pay a gross settlement of $12.5 million into a common fund for the benefit of settlement class, which numbers at approximately 6,000.

“This is a significant monetary recovery for the class and falls well within the range of court-approved settlements in similar ERISA cases,” the agreement posits. “Moreover, the settlement also provides for prospective relief.”

Among other things, the agreement stipulates that the defendants will maintain an investment policy statement for the plan, and the Putnam benefits investment committee, dubbed the “PBIC,” “will now independently review the at-issue Putnam funds in the plan.”

“Defendants will maintain a charter for the PBIC that outlines the duties and fiduciary responsibilities of the PBIC and establishes its general quarterly meeting schedule,” the agreement stipulates. “Defendants will maintain an investment policy statement for the plan; defendants will maintain a suite of low-cost third-party passive collective investment trust (CIT) options in the plan; PBIC will meet no less than quarterly, and such meetings shall include two meetings a year to review Putnam options in the plan, with Putnam senior investment representation attending to review the funds; one meeting a year to review the third-party passive CIT options in the plan with representatives of the third party CIT provider(s); one meeting a year to review the plan’s qualified default investment alternatives [QDIAs]; and one meeting a year to review PanAgora options in the Plan with PanAgora representatives; and defendants will arrange annual training on ERISA fiduciary duties for plan fiduciaries.”

According to the agreement, these changes are intended to address the allegedly defective procedures that plaintiffs identified regarding defendants’ process for managing the plan’s investment lineup and remedy specific conduct cited by the court in connection with the partial trial of this matter.

The settlement agreement further points out that the general structure of the settlement is similar to one approved by the same court in another ERISA case involving alleged self-dealing within proprietary funds, known as Price v. Eaton Vance Corp.

Like many ERISA lawsuits, Brotherston v. Putnam has a complex and lengthy procedural history. Underlying the entire care are the original allegations that Putnam engaged in self-dealing to promote the firm’s mutual fund business and maximize profits at the expense of the plan and its participants. The defendants were also accused of allowing excessive fees as a result of a lack of monitoring and replacing investments.

Back in 2017, the district court found that Putnam followed a prudent process for selecting and monitoring funds in its retirement plan and that participants’ comparison of Putnam mutual funds’ average fees to Vanguard passively managed index funds’ average fees was flawed. However, the 1st U.S. Circuit Court of Appeals vacated the District Court’s judgment in part and remanded the case for further proceedings, leading to the current settlement agreement.

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