Compliance October 21, 2019

Parties in Lawsuit Against Allina Health System Agree to Settle

The lawsuit accused Allina Health System defendants of allowing one provider free-reign to add funds to Allina's 403(b) and 401(k) plans, and of failing to monitor investment service providers.

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Participants in the Allina Health System 403(b) Retirement Savings Plan and 401(k) Retirement Savings Plan have reached an agreement with defendants to settle a lawsuit challenging plan investment decisions, among other things.

The complaint filed in 2017 suggested plan officials ceded discretion to a provider to add any mutual fund it wished, “regardless of whether the funds were duplicative of other options, had high costs, or were performing poorly.” The plaintiffs also claimed their 401(k) and 403(b) plan fiduciaries failed to adequately monitor investment services providers.

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Without admitting any liability or wrongdoing, the Allina defendants agree to deposit $2.425 million into a settlement fund. The settlement fund will be used to pay case contribution awards to the named plaintiffs, attorney’s fees and expenses, costs and expenses incurred by the plans’ recordkeeper and the settlement administrator to implement the settlement and proceeds awarded to a class of participants represented by the lawsuit.

The settlement agreement still needs the court’s approval.
Deals & People October 21, 2019

Principal and Wells Fargo Make Technology Integration Progress

“These digital and service model investments support our efforts to bring the best from both organizations to provide unparalleled value to participants, clients, advisers and consultants,” says Renee Shaaf at Principal.

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Principal Financial Group has revealed key technology details in its ongoing integration of the Wells Fargo Institutional Retirement & Trust (IRT) business. Technically, the firm has announced its choice of technology platforms for its Trust and Custody business, its nonqualified plans business, and its employee stock ownership plan (ESOP) business segments.

Principal’s acquisition of Wells Fargo was first announced early in 2019 and more recently made final. Through the acquisition, Principal doubled the size of its U.S. retirement business and brought on board new institutional trust and custody offerings for the non-retirement market while also expanding its discretionary asset management footprint.

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Moving forward, the firm’s leadership has selected the current SEI platform to serve trust and custody clients. The Principal platform, on the other hand, will be used to serve ESOP and nonqualified plans. Last month, Principal announced its retirement recordkeeping platform would also serve 401(k) plans and defined benefit customers.

Renee Shaaf, president of retirement and income solutions at Principal, says the collective tech infrastructure will be flexible, robust and efficient. It is also meant to provide “a solid foundation to build enhancements in the future.”

“We’re committed to delivering a results-driven, customer-first experience,” Schaaf says. “These digital and service model investments support our efforts to bring the best from both organizations to provide unparalleled value to participants, clients, advisers and consultants.”

Offering more detail about what these developments mean, Shaff explains that Principal will retain the SEI trust accounting platform Wells Fargo IRT uses today to support the combined organization. She says using the existing trust accounting platform provides a familiar, reliable, high-quality interface for clients and employees, and builds additional capabilities for Principal.

According to the firms, clients will benefit from single login access to account information across the trust accounting and additional reporting platforms, including access to performance measurement for domestic and multi-currency investment portfolios.

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