Compliance January 15, 2010

Bankruptcy Doesn’t Relieve Plan of ERISA Mandates

A Department of Labor (DoL) administrative law judge has rejected the appeal by a 401(k) plan administrator of an $86,500 civil penalty, ruling that bankruptcy did not relieve the administrator of requirements to properly file an annual report.
Reported by

A news release from the agency’s Employee Benefits Security Administration (EBSA) said the judge ordered the administrator of the Airport Hospitality, LTD 401(k) Plan to pay the penalty as assessed by EBSA. The administrator was charged with not properly filing a Form 5500 for the 2004 plan year because it did not include an acceptable independent qualified accountant’s opinion and an asset schedule.

The DoL judge found the plan administrator had sold its business locations without properly preserving plan records as mandated by the Employee Retirement Income Security Act (ERISA).

“Hotel workers are among the most vulnerable participants we protect,” said Ian Dingwall, chief accountant of EBSA, in the news release. “This case sends a strong message to employers that they must keep personnel and payroll documents for a sufficient time period so they can be checked for accuracy and completeness.”

The Markets January 15, 2010

Boutique Fund Managers See Growth in Down Economy

A listing of the fastest-growing active fund managers in 2009 includes mostly smaller firms.
Reported by

Strategic Insight (SI), an Asset International company, looked at active fund managers (among those that started 2009 with $1 billion or more in assets) that saw large growth in terms of 2009 net inflows as a percentage of total assets at the start of 2009 (organic growth), and found 15 firms that had organic growth of 50% or more in 2009.

The top five included Van Eck (119% organic growth), Manning & Napier Advisors (91%), Matthews Asian Funds (83%), Robert W Baird & Co (72%), and Hussman Econometrics (68%).

“The large number of smaller fund firms on this list attest to the strength of boutiques, whose focus and strong sense of conviction for their strategies/philosophies often prove attractive to investors in times of uncertainty,” said Avi Nachmany, director of research at Strategic Insight, in a press release.

Completing the list of the top 15 are:

  • Saturna Capital (67%)
  • Credit Suisse (66%)
  • Bessemer Trust (65%)
  • Lazard Asset Management (65%)
  • Sentinel Asset Management (63%)
  • Westchester Capital (61%)
  • TCW Management (57%)
  • Northern Trust (54%)
  • Kornitzer Capital Management (51%)
  • JPMorgan Funds (51%).

SI also noted the most popular actively managed mutual funds of 2009 displayed a wide range of investment styles. PIMCO Commodity Real Return topped the list of domestic equity funds with 6.7 billion in inflows; PIMCO Total Return led taxable bond funds with $49.7 billion; Ivy Asset Strategy saw the biggest inflows of international equity funds ($6.5 billion); and Wells Fargo Advisors Ultra Short Muni topped the list of tax-free bond funds with $6 billion in inflows.

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More information is available at www.sionline.com.

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