Policyholders saw an 85% bump in their premiums in 2015, despite assurances when they signed up that rates would not increase.
Sales reps failed to disclose conflicts of interest when recommending rollovers from employer plans to higher-fee managed accounts that often had worse performance, regulators said.
The defendants did not appear to solicit competitive bids for record-keeping services and allowed funds with high revenue-sharing to compensate service providers, according to the complaint.
The firm is buying Austin, Texas-based Trusted Capital Group, which has about 750,000 plan participants in its book of business.
The defendants succeeded in getting the case dismissed in 2018 at the district court level, a decision that was upheld by an appellate court in March 2020.
The deal to buy Arizona- and Southern California-based MJM401k adds 100 retirement plans and eight employees to SageView.
The DOL could issue guidance “to ensure that plan participants and beneficiaries with access to a brokerage window are adequately informed and protected under ERISA."
The 529 market can be more difficult to break into than the 401(k) world, which has an abundance of small plans that can be eager to hire fintech providers. States hiring 529 managers aren't likely to consider firms that don’t have track records.
So far, about 100 advisers, including those from 11 of the 15 biggest aggregator firms, have used the service, which recently began including quotes for pooled employer plans.
It’s unclear how much business PEPs have attracted in the first seven months they’ve been in existence, but some plan providers are banking on more demand on the 403(b) side, which could become eligible for the plan structure if Congress passes legislation.
