Principal has agreed to pay $3 million into a settlement fund (inclusive of attorney’s fees) and reduce plan fees by at least $8.1 million, reducing administrative expenses to its own company sponsored retirement plans from 14 to 7 basis points. Principal also agreed to add a self-directed brokerage window to its defined contribution plans and permit participants to invest in non-proprietary funds. Plaintiffs in the lawsuit, Principal employees with accounts in the Principal plans, claimed that Principal only offered proprietary products as investments in the plans, with Principal, its officers and subsidiaries standing to profit from the plan fees. They also alleged that the defendants breached fiduciary duties by entering into a recordkeeping arrangement with Principal.
www.napa-net.org; November 30, 2015.