Employee Fund Allocations

[coleboy]

Hi,

The client's plan assets were transferred over to the new recordkeeper back in August 2019. For a couple of participants, their money went into the money market account instead of the same funds it was in under the previous recordkeeper.

The person setting up the accounts failed to set up the funds properly when setting up these employees with the new recordkeeper.

These participants are now just realizing 18 months later that their money wasn't invested the way they thought it was.

My question is...how much responsibility do we as the TPA have in so far as making the accounts good earnings-wise? Should not some of that responsibility fall on the participants for not checking for 18 months to make sure their money was invested the way it needed to be?

 

Thank you!

[duckthing]

Two quick questions off the top of my head, and I'm sure others will have additional thoughts.

Who was "the person setting up the accounts"? Was this somebody in your office, the advisor's office, the client's office, etc.?

And... what does your service agreement with the client say?

[coleboy]

Hi, it was someone in our office. This was the only thing I could find in the Service Agreement.

[EPCRSGuru]

I suspect that this is not purely a legal question, but also a question about what is the right thing to do.  Having said that, my (large) employer did a comprehensive revision of its 403(b) plan investment lineup in September of 2010 and in 2018 we still had very senior people calling asking very irately what we had done with their account in Mutual Fund Company X, and how dare we.  And our communications included letters, brochures, emails, and in-person and online meetings.  I feel your pain.