Products November 2, 2010

RPAG Renovates Adviser Web site

The Retirement Plan Advisory Group (RPAG) updated its adviser-centric Web site, Knowledge Center, with improved navigation and document storage.
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RPAG, an independent retirement plan practice management firm and a subsidiary of National Financial Partners, announced the following improvements to the site: 

  • New titles for Header tabs, intended to mimic adviser’s sales and service processes 
  • Categorizes resources by samples, checklists, templates, articles & information, and training presentations 
  • Audited documents to include branding updates 
  • Re-organized Quick Links on the homepage for platform applications such as the Scorecard Generator and Compensation Calculator 
  • An expanded Newsletter section

“RPAG is committed to providing our advisers with world class tools, technology and training that allows them to be more effective in their day to day practice,” says Jami Chapman, Chief Operations Officer for RPAG. “The Knowledge Center aggregates all of the key elements of our practice management platform so our members work smarter, not harder,” he added.   

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Compliance November 2, 2010

Stock-Drop Suit Survives Initial Challenge

A federal judge in Kansas cleared the way for former YRC Worldwide employees to move forward with their stock-drop suit against the trucking company.
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U.S. District Judge John W. Lungstrum of the U.S. District Court for the District of Kansas applied the presumption of prudence typically used in stock-drop cases, in which fiduciaries in plans with company stock as a 401(k) plan investment option are presumed to have acted prudently.  He concluded that the plaintiffs had put forward a strong enough case up to this point to negate the presumption.

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The suit claimed the plan continued to offer the company stock option after it was no longer prudent; the share price plummeted from high of $25.96 per share in October 2007 to a low of $0.45 per share in March 2010.

In agreeing to let the case move forward, Lungstrum noted that the stock had become virtually worthless during the period covered by the suit. The court said the plaintiffs’ allegations went “far beyond” the substantial stock price drops that courts in other cases have found insufficient to rebut the presumption of prudence.

The court also pointed to several business practices of YRC that, in conjunction with the “calamitous decrease in share value,” showed YRC was facing a dire financial situation that endangered the viability of the company.

Lungstrum wrote: “Allowing the Plan’s holdings of Company stock to become essentially worthless could certainly defeat the purpose of the Plan, such that a reasonable fiduciary would be justified in overriding the Plan’s mandate to offer such stock as an investment option.”

While Lungstrum allowed the Employee Retirement Income Security Act (ERISA) fiduciary breach claims to proceed, he threw out a breach allegation that the plan did not disclose material information to employees who invested in company stock.

The court turned away the defendants’ contention that the plaintiffs’ imprudent investment claim was the equivalent of a claim that the defendants should have better diversified the plan. Lungstrum said he agreed with the plaintiffs that their imprudent investment claim was distinct from a failure to diversify allegation.

The case is In re YRC Worldwide Inc. ERISA Litigation, D. Kan., No. 09-2593-JWL.

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