Products April 8, 2010

MassMutual Adds Four Funds to Target-Date Offering

MassMutual's Retirement Services Division has added to its MassMutual Smart Architecture Investment Program with the addition of four new target-date funds.
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The addition of 2015, 2025, 2035, and 2045 funds brings MassMutual’s Select Destination Retirement Series to 10 fund options (Income, 2010, 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050)—all 10 of which rely on MassMutual’s asset allocation/risk management methodology, according to the firm.

The Select Destination Retirement Series taps into investment expertise from more than 20 firms representing a wide variety of investment management capabilities, MassMutual said.

“MassMutual’s philosophy emphasizes a long-term approach aimed at consistently growing assets during an investor’s working years and delivering balanced asset growth with inflation-adjusted income generation into and throughout retirement,” said Eric Wietsma, senior vice president and head of investments and product development for MassMutual’s Retirement Services Division, in an announcement.

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More information is available at www.massmutual.com/retire.

Compliance April 8, 2010

Lawyer Disqualification Move Rebuffed in 401(k) Suit

A federal judge in West Virginia has ruled that lawyers simultaneously representing plan administrators and plan participants do not necessarily have a legal conflict of interest that would prohibit the practice.
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U.S. District Judge Frederick P. Stamp Jr. of the U.S. District Court for the Northern District of West Virginia turned away the notion advanced by lawyers representing Huntington National Bank that the legal conflict of interest would arise from the fact that the plan administrators could be liable to participants for committing a fiduciary breach under the Employee Retirement Income Security Act (ERISA).

One Huntington National contention was that the plan administrators acted as plan fiduciaries, and could be held liable by the plan participants when the administrators decided to amend the plan to convert it from a managed plan to a participant-directed plan. The court said this type of action was not a fiduciary action under the Employee Retirement Income Security Act.

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Stamp’s ruling came in a lawsuit filed in 2005 by Marks Construction Co. of Clarksburg, West Virginia, and two 401(k) participants that alleged Huntington improperly liquidated assets when Marks converted its retirement plan to a defined contribution plan from a company-managed structure and also that the bank charged excessive fees.

The parties agreed to a settlement in early 2009, but Huntington went back into Stamp’s court to insist that if the plan suffered losses when it was converted to a DC plan, then Marks and its owners were responsible for such losses. However Stamp ruled that Marks Construction and its owners were not acting as plan fiduciaries when they approved the conversion from a company-managed plan to a participant-directed plan.

Finally Stamp asserted that even if a conflict of interest existed, Huntington National could not successfully force the other side’s lawyers off the case because the disqualification efforts came too late; the litigation was ongoing for more than four years and it was not until the late stages that the bank mounted its attempts to get the Marks lawyers thrown out.

The case is Marks Construction Co. v. Huntington National Bank, N.D. W.Va., No. 1:05CV73.

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