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Compliance November 21, 2006
FL Sheriff Sues Nationwide Over Fees
A Florida Sheriff’s Department has sued Nationwide Life Insurance Co., over allegations Nationwide’s retirement plan fees unfairly allowed the company to make a profit through a revenue sharing arrangement.
Reported by Fred Schneyer
The suit was filed by Orange County Sheriff Kevin Beary and charged that Nationwide, the agency’s former provider, would offer mutual funds to deputies and other investors only if the family of funds also paid the company a fee, according to an Orlando Sentinel news report.
That arrangement allowed Nationwide to pocket an exorbitant level of fees – money that rightly should belong to the investors, Beary’s attorney Roger Mandel told the newspaper.
The lawsuit asks that Nationwide return to investors any profit made from charges to mutual-fund families since 1996, when the company is accused of beginning the practice.
According to the Sentinel, Sheriff Department officials became concerned within the past year after a consultant reviewing the department’s retirement plans advised the agency to ask Nationwide if it used revenue sharing.
The suit was filed in US District Court inColumbus,Ohio.