Products January 16, 2025

Product & Service Launches – 1/16/25

BlackRock’s LifePath Paycheck reaches a milestone; HSA Store launches a mobile app; Green Leaf Launches 401(k) Solution; and more.  

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BlackRock’s LifePath Paycheck Closes 2024 With $16B in AUM 

Since launching in April 2024, BlackRock’s target-date offering that provides the option for guaranteed lifetime income, LifePath Paycheck, has accumulated $16 billion in assets under management, the company announced. 

At least six employer plans—including Avangrid, Adventist HealthCare Retirement Plans and the Tennessee Valley Authority Retirement System—have announced the inclusion of the product in their plans. It is also available to BlackRock employees. 

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LifePath Paycheck provides plan participants with the option for a guaranteed stream of income for life, payable by insurers, and is now available as an investment selection for more than 200,000 eligible employees across the plans. Fidelity Investments and Bank of America have enabled access on their recordkeeper platforms and other recordkeepers, including Voya Financial, are also planning to offer the solution, according to BlackRock’s announcement. 

HSA Store Launches ExpenseTracker Mobile App 

HSA Store, an online store dedicated to selling products and services eligible for use with a health savings account, launched a new mobile app to help HSA users save time and money by easily tracking their HSA spending, either online or in retail locations.  

The HSA ExpenseTracker app is free and available for download in Apple’s App Store and on Google Play. 

“The … app makes it easy for individuals and families to track where, when, and how they purchase HSA-eligible products—whether they are shopping online at HSA Store, at their local drugstore or other online retailers. They can even connect other online accounts to the app to streamline HSA tracking across platforms,” said Itamar Romanini, vice president and general manager of the HSA Store, in a statement. “Tracking expenses is important because HSAs are tax-advantaged accounts and individual account holders are responsible for proving eligibility, in the event they are ever audited by the IRS.” 

Green Leaf Launches 401(k) Solution 

Green Leaf Business Solutions LLC, a partner in human resources and payroll solutions for the cannabis industry, launched GreenPath 401(k)—a retirement plan offering specifically for the legal cannabis industry. 

First Citizens Bank will serve as the custodial agent and banking partner for the plan, and Green Check will provide the account onboarding and verification services for the entire coalition of financial partners.  

Vanguard, CuraFin Advisors and Mid Atlantic Trust are also helping to administer the pooled employer 401(k) plan, according to the announcement.  

Schwab Asset Management to Launch Core Bond ETF 

The asset management arm of the Charles Schwab Corp. announced the launch of the Schwab Core Bond ETF. This is the business’s second actively managed fixed-income exchange-traded fund after the August 2024 launch of the Schwab Ultra-Short Income ETF.  

The first day of trading of the ETF is expected to be on or about February 5. 

The ETF has an expense ratio of 0.16% and aims to provide total return while generating income through investing in U.S. dollar-denominated debt securities. 

Compliance January 15, 2025

Bechtel Managed Account QDIA Lawsuit Dismissed

The complaint accused the engineering and construction firm of defaulting participants into a high-fee option that provided no benefits compared with a target-date fund. 

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A federal judge in Virginia dismissed for a second time a lawsuit filed against Bechtel Global Corp., its board of directors and its trust and thrift plan committee alleging the company defaulted plan participants into a managed account that did not justify the associated fees. 

U.S. District Judge Anthony Trenga granted the dismissal on January 10, stating that plaintiff Debra Hanigan’s second amended complaint failed to allege a “meaningful benchmark” to support her excessive fee claim. 

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In Hanigan v. Bechtel Global, Hanigan originally argued in May 2024 that without participant engagement, the managed account did not produce results worth the additional fees, particularly when target-date funds could have produced similar results at a lower cost.  

According to her complaint, as of February 2024, approximately 63% of Bechtel’s plan participants were enrolled in the managed account, called the Professional Management Program, and it was the qualified default investment alternative for the 401(k) plan. From 2018 to 2023, the managed account participants paid an average of approximately $940 per year in investment, administrative and recordkeeping fees. Approximately 65% of participants do not provide any personalized information to influence the asset allocation within the managed account. 

The managed accounts were run by Edelman Financial Engines as provided by recordkeeper Empower. 

Hanigan also argued that using the managed account as the QDIA for the plan “significantly and imprudently” increased the administrative fees paid to the recordkeeper from participants when compared with defaulting them into TDFs.  

Trenga had previously dismissed the suit in October 2024 for similar reasons, but the judge allowed an opportunity to amend the suit to address the plaintiff’s failure to provide meaningful benchmarks. 

However, Trenga’s recent decision found that Hanigan’s claim that the asset allocation models for the managed account were comparable to a TDF option was neither factual nor plausible. He stated that the managed account engages in a level of asset allocation and management that are not present in a TDF and that Hanigan failed to demonstrate that the asset allocation and investment management of a TDF and a managed account are similar. 

Trenga further ruled that the fact that some participants did not provide personalized information for the managed account does not change this analysis.  

Additionally, because Hanigan did not plausibly allege another breach of fiduciary duty, her claim alleging a failure to monitor was also dismissed. 

The plaintiff was represented by law firms Fitzerald Hanna & Sullivan PLLC and Walcheske & Luzi LLC, and Bechtel was represented by Go

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