Illegal for an insurance company to steer participants into their prop

[Guest Breathnach]

Deceptive Sales Practices 401K

Does anyone know if it is a rule violation (erisa,Sec,Dept of Labor) for an insurance company to steer participants into their proprietary fixed annuity account where they make a higher fee ? The plan had several Mutual fund options but most of the plan assets went into the Insurance companys own fixed account.

[Jon Chambers]

To the extent that the decision to use proprietary product results from investment advice rendered by the insurance company, there is a violation of the ERISA prohibited transaction rules. So it depends how the dollars got to the insurance company products. Did participants choose the accounts on their own, or did the insurance company's advice steer them into the product? And be careful about the definition of "advice"--it's not obvious what is meant by that term. More information would be helpful.