Products January 18, 2008

New CPI Division Assists 403(b)s with Vendor Management

CPI Qualified Plan Consultants, Inc., has created a new division to offer common remitter and compliance services to 403(b) retirement plan sponsors.
Reported by

CPI Common Remitter Services will offer the Common Remitter and Compliance Program (CRCP), which features three different service levels, allowing plan sponsors to choose the level of daily involvement they will have with the administrative aspects of their 403(b) retirement plans and the multiple vendors participating within their school district or tax exempt organization. In addition to plan documentation, vendor verification, required testing, and limits monitoring, CRCP also offers Internet and call center services for the plan sponsor and participants, the company said.

“Payroll processing can continue as usual, and the plan sponsor can include any number of vendors in the 403(b) plan to meet the needs of the plan participants,” said Jon Prescott, Chief Marketing Officer of the third party recordkeeping and administration company, in a company announcement.

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

Compliance January 18, 2008

Judge Tosses Fee/Commission Conspiracy Case against Workplace Insurers

After declaring that none of the six major insurance providers accused in a commission conspiracy were fiduciaries under the Employee Retirement Income Security Act (ERISA) a federal judge has cleared the companies of wrongdoing.
Reported by

Ruling in now-consolidated class-action cases filed by numerous employee benefit plans, a federal judge in New Jersey asserted that the providers did not breach their fiduciary duties through a fee/commission agreement with brokers for employer benefit plan business. Chief U.S. District Judge Garrett E. Brown Jr. of the U.S. District Court for the District of New Jersey granted a request from the defendant insurance providers and dismissed the cases.

The suits claimed that the ERISA fiduciary breaches occurred when the defendants did not disclose the amount of fees/commissions they paid to brokers for the employer plan business. The plaintiffs charged that the fees/commissions should have been disclosed on their Form 5500.

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

The defendants in the case were Hartford Life and Accident Insurance Co., Prudential Insurance Co. of America, Metropolitan Life Insurance Co., UNUM Life Insurance Co., AIG Insurance Co., and Connecticut General Life Insurance Co.

Brown accepted the insurance companies’ argument that while they may have exercised discretion in making benefit payment decisions, that did not mean they were ERISA fiduciaries in all situations. The court also ruled the plaintiffs had not proven their allegations that the insurance carriers misled them about the fee/commission arrangement when the plaintiffs asked about it.

The ruling in In re Employee-Benefit Insurance Brokerage Antitrust Litigation, D.N.J., No. 05-1079 (GEB), unpublished 1/14/08 is available here.

«