Captive Insurance & 419 Plans Litigation: February 2014

Captive Insurance & 419 Plans Litigation: February 2014

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  1. The lawsuit, filed Tuesday in U.S. District Court in Massachusetts against Massachusetts Mutual Life Insurance Co, states that the firm "larded" its 401(k) program with overpriced and inferior investments and engaged in "blatant self-dealing" by making money selling its own services to the plan. MassMutual, headquartered in Springfield, Massachusetts, could not be reached immediately for comment.

    Coming a year after new Labor Department rules requiring employers to clearly disclose 401(k)fees to participants, the case filed by the firm of Schlichter, Bogard and Denton is a sign that retirement plan litigation isn't going away. It's also a sign that employee-funded defined-contribution retirement plans still are imperfect, despite improvements and increasing attention from regulators and activists like Schlichter.

    Mike Alfred, co-founder and chief executive officer of Brightscope, a firm that collects and publishes data about company retirement plans, says 401(k) fees have been coming down for year

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