Products January 24, 2025

IRI, Cannex Introduce Baseline Values Tool for Annuities

The solution is intended to improve financial planning by integrating annuity options more directly into the modeling process.

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Aiming to simplify the modeling of deferred annuity products for financial professionals, the Insured Retirement Institute and Cannex Financial Exchanges Ltd. have debuted a new tool called IRI Baseline Values.  

According to Washington, D.C.-based IRI and Toronto-based Cannex, IRI Baseline Values will allow financial professionals to represent annuities inside their financial plans for clients, leading to better modeling of lifetime income options and protected growth.  

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The IRI Baseline Values report will be updated quarterly. IRI also published a reference guide and brief explainer document. 

According to IRI, it has also collaborated with several financial planning platforms to incorporate the IRI Baseline Values into their tools, meaning that even those unfamiliar with annuities can integrate them into plans and see how the products may help create lifetime income.  

“Baseline Values are a game-changer for financial professionals, making it easier than ever to include annuities in the conversation with clients,” said Katherine Dease, chief technology and innovation officer at IRI. “By simplifying the modeling process and integrating directly into leading financial planning tools, these values remove the complexity that often deters advisers from considering annuities.” 

Compliance January 23, 2025

JPMorgan Faces 401(k) Forfeiture Lawsuit

The banking giant is the latest company to face litigation over its use of forfeited 401(k) assets.

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Another plan sponsor has been accused of using forfeited 401(k) funds for its own benefit.

This time, JPMorgan Chase & Co. is the focus, with a plan participant claiming the firm breached its fiduciary duty under the Employee Retirement Income Security Act by using forfeited assets to decrease future employer contributions to the retirement plan, instead of using those funds to the “benefit of plan participants.”

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The initial complaint in Wright v. JPMorgan Chase & Co. et al. was filed on Tuesday in U.S. District Court for the Central District of California.

Daniel Wright, a participant in the JPMorgan Chase 401(k) Savings Plan, claims JPMorgan failed to engage in a reasoned and impartial decisionmaking process before deciding to use the forfeited funds in the plan to reduce the company’s own contribution expenses.

“[JPMorgan’s] wrongful conduct … caused the plan to receive fewer employer contributions than it would otherwise receive, and depleted plan assets,” the lawsuit states.

The complaint also alleges that JPMorganChase saved itself millions of dollars in contributions by allocating forfeitures in this way.

More than 30 other forfeiture lawsuits have been filed against employers since 2023, all with similar allegations of using forfeited funds to help reduce future employer contributions.

The IRS reaffirmed its position in 2023 that 401(k) plan forfeitures can be used to pay plan expenses, reduce future employer contributions or to make an additional allocation to participants. Some attorneys have also argued that if the practice is allowed in a plan’s documents, it should not be a violation of ERISA. The Department of Labor has yet to comment on this litigation trend.

Several large employers have been targeted by such lawsuits, most recently Amazon.com Inc. earlier this month. BMO Financial Corp. also recently filed a motion to dismiss a complaint against the firm’s use of forfeitures. Haffner Law PC, which represents Wright, is also representing plaintiffs in the BMO case, as well as a similar suit against Bank of America.

Some forfeiture lawsuits have been dismissed by district judges in recent months, including those against BAE Systems Inc., Thermo Fisher Scientific Inc. and Clorox Co. 

In the JPMorganChase case, the plaintiff, Wright, is asking that all assets and profits secured by JPMorganChase as a result of each violation of ERISA be disgorged and is seeking removal of the fiduciaries who “breached their duties.”

The JPMorgan Chase 401(k) Savings Plan had more than $44 billion in assets and 292,458 participants, according to its 2023 Form 5500 filing. Employees are fully vested in the plan after three years, according to the complaint.

JPMorganChase did not immediately respond to a request for comment.

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