Products July 31, 2019

Edelman Financial Engines Introduces Fiduciary Distribution Review

The program offers participants one-on-one sessions with a financial planner to discuss their various distribution options.

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Edelman Financial Engines has introduced Fiduciary Distribution Review, a program that gives retirement plan participants the opportunity to sit down with an Edelman financial planner in a one-on-one session to discuss their various distribution options.

By learning about the employee’s situation and goals, the planners are able to apply their deep knowledge of the employer’s 401(k) plan to give the employee recommendations that are in the employee’s best interests. The advice takes into account each individual’s forecasts of post-retirement income, including Social Security benefits and in-plan income options.

“Employers spend large amounts of time and money providing employees with access to high-quality and low-cost investment options in their plan,” says Christopher Jones, chief investment officer at Edelman Financial Engines. “They also provide crucial fiduciary oversight to ensure financial providers are protecting employees’ best interests. Over 3,200 companies have hired Financial Engines because of our industry-leading financial planning and investment advice, and our new Fiduciary Distribution Review program helps ensure that employees don’t squander their chances of achieving retirement security through poor decisions around plan distributions.”

Compliance July 31, 2019

SEI Agrees to Pay $6.8 Million to Settle Self-Dealing Suit

The defendants also agree to retain the services of an unaffiliated investment consultant to provide an evaluation of the design of the plan’s investment lineup and to review the plan’s investment policy statement, among other things.

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SEI Investments Company has entered into a settlement agreement to resolve claims in an Employee Retirement Income Security Act (ERISA) self-dealing lawsuit.

According to the Settlement Agreement, the defendants will pay $6.8 million to a Qualified Settlement Fund.

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In addition, SEI agrees that the following procedures shall apply to the management of its 401(k) plan on a prospective basis for a period of no less than three years beginning no later than the settlement effective date:

  • Defendants shall retain the services of an unaffiliated investment consultant to provide an evaluation of the design of the plan’s investment lineup and to review the plan’s investment policy statement;
  • SEI shall continue to pay all recordkeeping fees associated with the plan that it is currently paying and that would otherwise be payable from plan assets; and
  • SEI shall ensure that all of the plan’s investment committee members will participate in a training session on ERISA’s fiduciary duties.

The lawsuit claims the defendants offer “only designated investment options that generate fees for SEI and its affiliates and treat the plan as a captive customer of SEI in order to prop up SEI-affiliated investment products and advance SEI’s business objectives.”

The complaint further states that SEI investment products “are not competitive in the marketplace.”

“Participants would have been better served if defendants had investigated and retained non-proprietary alternatives,” the complaint states.

The Settlement Agreement needs to be approved by the court.

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