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SEI Agrees to Pay $6.8 Million to Settle Self-Dealing Suit

"According to the Settlement Agreement, the defendants will pay $6.8 million to a Qualified Settlement Fund. In addition, SEI agrees that ... [1] Defendants shall retain the services of an unaffiliated investment consultant to provide an evaluation of the design of the plan’s investment lineup and to review the plan’s investment policy statement; [2] SEI shall continue to pay all recordkeeping fees associated with the plan that it is currently paying and that would otherwise be payable from plan assets; and [3] SEI shall ensure that all of the plan’s investment committee members will participate in a training session on ERISA’s fiduciary duties."

ERISA Self-Dealing Lawsuit Calls SEI Plan 'Captive Customer'

"According to the lead plaintiff, the DC plan in question offers only investment options that generate fees for SEI and its affiliates and treat the plan as a captive customer.... The complaint makes a variety of claims about widespread conflicts of interest in the DC plan industry, suggesting that financial services companies such as SEI deserve extra scrutiny.... [T]he lead plaintiff says defendants did not meet their fiduciary obligations to regularly evaluate each investment option within the plan on its merits relative to alternative available options."

IRS Issue Snapshot: Calculation of Plan Compensation for Sole Proprietorships

"If nonelective contributions ... on behalf of a sole proprietor (the SEI) are determined under a plan's formula as a percentage of the sole proprietor's Earned Income, then the Earned Income calculation is dependent on the SEI's contribution, but the SEI's contribution is also dependent on the Earned Income."

Controlling Pension Funding Volatility The Top Priority For Third Year In A Row

For the third consecutive year, an SEI Quick Poll found that pension plan sponsors view controlling funded status volatility as the top priority for their organizations. Not far behind, plan sponsors identified the need to improve the funded status of their pension plans as the second most important priority this year.

New Mortality Tables Released for Retirement Plans

"The change to the new table, from RP-2006 to Pri-2012, will impact liabilities generally within +/-1%.... Blue-collar workers may see decreases for females and older males (up to 1.5%) and increases for younger males (up to 1.7%). White-collar may see decreases (up to 1%) and larger decreases for the older population. Those with no-collar may see increases for younger participants (males up to 1% and females up to 0.3%) and decreases for older (over age 75) participants."

Survey Results: Multiemployer Pension Plan Sponsors

"Nearly half (44%) of those polled plans' current funded status is 'endangered' or worse. Trustees with plans currently in the red zone status are not entirely confident the plan will meet the targets in its rehabilitation plan.... 62% of trustees polled are increasing contributions to alternative investment classes in an effort to improve overall health of the plan"

Redesign of DC Plans Focuses on Building the Right Oversight Process Moving Forward (PDF)

17 pages. "As plan trustees seek to offer the best possible investment approach, more are decoupling asset management from recordkeeping, virtually ending the bundled experience of 'all things in one place.' ... [T]he need for more effective plans requires more accountability and oversight. This requires a thorough process for monitoring the plan and making timely decisions about changes to the plan and investments."

DC Plan Sponsors Can Build Better Lineups and Reduce Fiduciary Risks through a Discretionary Investment Approach

"Factors like investment complexity, increased fee pressure, litigation and the increased reliance on DC plans as the primary retirement savings vehicle, place tremendous pressure on plan sponsors.... [S]imply choosing brand-name funds, passively managed funds or funds provided by recordkeepers are no longer automatically safe choices.... [P]lan sponsors and committees are often understaffed, stretched for time or simply lack the expertise to effectively manage and monitor complex investment portfolios."

Defined Contribution Plan Sponsors Embracing Non-Recordkeeper Target Date Funds

"[N]on-recordkeeper or off-platform target date funds (TDFs) continue to grow in popularity among plan sponsors. While ninety percent of survey respondents said they currently offer TDFs as an investment option in their plan, the use of recordkeeper TDFs and non-recordkeeper TDFs is essentially split evenly. Those plans with over $1 billion in assets ... are leading the way with 64 percent offering non-recordkeeper TDFs."

Do DC Plans Need to Be Redesigned? (PDF)

16 pages. "DC plan core lineups, not including target-date series, continue to offer a significant number of funds.... A significant use of non-recordkeeper funds is a sign that the unbundling of asset management and recordkeeping is underway.... Quality of investment options and how they perform are the foremost priorities of plan sponsors, more so than costs or fees and risk of litigation.... The revision of DC plans will come down to how proactive plan sponsors are in creating a sophisticated retirement plan that can be used by participants to adequately save for retirement."