Request a Proposal

MFS Excessive Fee Settlement

A proposed settlement has been filed in this case in which plaintiffs allege MFS failed to investigate non-proprietary funds in the company’s own retirement plans in lieu of a menu of predominantly MFS investment options, costing plan participants millions of dollars in excess fees. More specifically, MFS was accused of failing to select the least expensive share classes, investigate separate accounts or collective trust alternatives, monitor and control recordkeeping expenses, and remove and replace poor performing funds. According to the settlement terms, MFS “shall cause its insurers to pay” almost $6.9 million into a qualified settlement fund. After deduction of court approved attorneys’ fees, administrative expenses, and class representative compensation, the remainder will be allocated to class members as directed by the Court. Also, “for a period no less than three years beginning on the effective date of the settlement”, the QDIA must be one or more non-proprietary index target date funds. Additionally, MFS will be required to retain an independent third-party investment consultant to provide an annual review of the Plans’ investment lineup and Investment Policy Statement (IPS).

www.planadviser.com; June 18, 2019.
www.napa-net.org; May 13, 2019.