Good data could help avoid lawsuits

Charles Massimo at CJM Fiscal Management points out that "miseducation" of plan participants can lead to plan participants suing their 401(k) plan sponsor.  He says, "Investment advice is required by law to be in the plan participant’s best interest; however investment education is not subject to this standard."

At Inveska, we believe that the investment data distributed by most 401(k) plans is inadequate, but that good data that is in the best interests of plan participants could help avoid lawsuits.

Consequences for bad funds

The Moneywatch blog has an amazing post by Nathan Hale about a group of employees suing their employer over bad funds offered in their 401(k).  An article by Jilian Mincer and Linda Stern covering the lawsuit reports, "It's one of some three dozen lawsuits filed in recent years in the ongoing tussle over 401(k) costs."  What makes this lawsuit so interesting is that the employer is Ameriprise Financial, who put their own funds into the 401(k) plan.  The employees say that these funds were more expensive than those offered by other managers.

Sure, the story is particularly hilarious when the company being sued is the one that makes the funds.  But remember that all 401(k) plan sponsors are fiduciaries - the interests of the people in the plan go above the interests of the sponsor and the company.

Inveska helps you make sure the funds in your plan can be trusted.