A settlement has been reached in this previously reported case in which fiduciaries of the Anthem $5.1 billion 401(k) Plan allegedly failed to leverage the Plan’s size to afford access to low fee investments and offered a low yielding money market fund rather than a stable value fund which would provide a better return. The suit also alleged excessive recordkeeping fees for a plan of its size, referencing a reasonable recordkeeping fee of $30 per participant verses the historical range with Vanguard of between $42 and $94 per participant. In addition to a $23.65 million settlement, which includes participants’ recoveries as well as attorneys’ fees and administrative expenses, the Anthem Plan Pension Committee is required to publish a fund fact sheet for those participants invested in the money market fund explaining the risks, historical returns, as well as the advantages of diversification. Plaintiffs’ counsel will monitor compliance with the settlement for a period of three years. Additional settlement terms include the requirement that fiduciaries conduct an RFP for recordkeeping services (on a total fixed fee basis and per participant basis) within the first 18 months of the settlement period, and within 30 days of a decision pursuant to the RFP, provide a summary analysis to the plaintiffs’ counsel. By the end of the first year, the Pension Committee also agreed to hire an independent investment consultant to review and report on the Plan’s investment lineup and make recommendations as necessary, meet to review the report, and evaluate any recommendations within 150 days of receipt of report.
www.napa-net.org; April 10, 2019.