Compliance August 21, 2009

QVC Workers Cry Foul Over 401(k) Probe

QVC employees fired over alleged irregularities in their 401(k) withdrawals said they were treated unfairly.

Reported by

The employees said they were driven to seek the retirement money because of company cutbacks.

A news report from Raleigh, North Carolina, television station WRAL said the employees discharged over the flap were notified of their termination by phone call. Former employee Stephanie Williams suggested employees be asked to pay back the money instead of losing their jobs. “You act like we stole something. This was our money,” Williams told WRAL.

“If I say I used it for rent that’s what I used it for. My problem is they know we’re in a recession and they are having a hard time this year. Why don’t they think we’re having a hard time?” former employee Shirley Kelley added. “They cut our hours and (there were) no raises this year. We got families.”

One ex-QVC worker said QVC officials were also unfair in selecting which of the approximately 200 employees investigated for potential wrongdoing should be discharged. “I don’t think that’s fair because QVC right now still has people in there that should be out here with us,” former employee Barbara Pittman said, according to the news report. “I just feel like they totally did us wrong.”

Company spokeswoman Tara Hunter defended QVC’s actions. “As the plan administrator of its 401K Plan, it is QVC’s responsibility to ensure that the plan is operating properly and complying with all applicable legal requirements, including the distribution of hardship withdrawals,” she said. “Accordingly, QVC initiated the investigation into the alleged irregularities and took appropriate actions in accordance with its internal operating principles.”

Previous news reports indicated the withdrawals were loans.

Employees whose 401(k) activity was probed received an August 5 letter from the company saying they would have to meet with the company to prove their hardship was legitimate (see “QVC Loan Probe Continues“). On August 19, the company announced that the investigation was complete, but declined to release details about how many people had been terminated (see “QVC Ends 401(k) Loan Investigation”).

The Markets August 21, 2009

Fund Flows Have Fourth Good Month

July was the fourth consecutive month in which long-term fund flows equaled or surpassed $50 billion, according to Strategic Insight (SI), an Asset International company and sister company to PLANADVISER.

Reported by

Rebecca Moore

Investors deposited $36 billion into bond funds and $14 billion into equity/hybrid funds in July, the SI data show.

Three-quarters of the flows into equity funds went to international/global equity funds. Taxable bond funds collectively garnered $28 billion of bond fund flows for the month, with flows coming into all major categories.

Evidence that investors remain cautious is found in the fact that July marked the fourth straight month of $30 billion-plus bond fund flows. Total bond fund flows year-to-date through July are nearly $200 billion, more than double the volume in the corresponding period last year, SI said.

Flows into asset allocation funds-of-funds rose to $5.4 billion in July, up from $3.7 billion in the prior month. Flows into lifecycle strategy funds-of-funds remained steady, while the net new intake of other kinds of specialized funds-of-funds programs saw an uptick in July. Year-to-date, funds-of-funds have brought in a total of $21 billion in net new cash flows.

Exchanged-traded funds (ETFs)/exchange-traded notes (ETNs) across all asset classes and legal structures garnered about $12 billion in July, with flows driven by Small-Cap Core, S&P 500 Index, Emerging Markets, Dedicated Short Bias, and Natural Resources funds. Year-to-date through July, ETFs/ETNs have collectively drawn an estimated $47 billion in net new flows, compared to about $40 billion in the first seven months of 2008.

Money-market mutual fund assets declined by about $45 billion in July as investors shifted to higher-yielding investments.

Among the largest fund firms (firms with more than $20 billion in long-term fund assets under management), those garnering the most long-term fund flows in July were Vanguard ($12.2 billion); PIMCO/Allianz Global ($8 billion); Barclays Global Investors ($4.4 billion); Fidelity ($3 billion); and JPMorgan Funds ($2.3 billion). Among smaller managers of long-term funds, those that led in long-term fund flows in July were TCW, Lazard Asset Management, Matthews Asian Funds, Manning & Napier Advisors, TIAA-CREF, and InvescoPowerShares.

Registered users can receive more detailed information at www.sionline.com.