American Agrees to Pay $22 Million to Settle Proprietary Funds Case
The case accused American Airlines of including affiliated funds in its retirement plan investment lineup though they were more expensive and lower-performing than other funds.
A preliminary settlement agreement
has been submitted for court approval in a case accusing American
Airlines of including affiliated funds in its retirement plan investment
lineup though they were more expensive and lower-performing than other
funds.
The core of the plaintiffs’ claims relate to the use of American Beacon Funds in the plan.
AMR Corp., American Airlines’ parent company, created a line of mutual
funds that were managed by another subsidiary of AMR Corp. This fund
manager was later renamed American Beacon Advisors, Inc. in 2005.
Earlier this year, a federal district court judge refused to dismiss the
case.
The gross settlement amount is $22 million, of which $12
million will be contributed by the American Airlines defendants or their
agents or insurers and $10 million will be contributed by American
Beacon or its agents or insurers.
According to the settlement agreement
“the Settling Parties, as defined below, have concluded that it is
desirable that this matter be finally settled upon the terms and
conditions set forth in this Settlement Agreement.” American Airlines
and American Beacon deny any wrongdoing or liability with respect to any
of the allegations or claims.
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Most Americans With Set Financial Goals Don't Forego Savings
Those who are progressing with their goals are more likely to have a retirement plan, life insurance and at least one investment account, Lincoln found in a survey.
Lincoln Financial asked survey
participants for open-ended responses about their 2017 financial goals,
and found that priorities for those individuals with specific goals tend
to focus on some key themes: reducing debt, general savings and saving
for retirement.
While about one-third of the general population
set specific financial goals, the number jumps up to just less than half
of Millennials. Many Americans (55%) also made New Year’s resolutions
for 2017. Thirty-six percent of those resolutions focused on finances or
career, others mostly focused on health and fitness.
Most
Americans (72%) say they are progressing with their resolutions in some
way, versus 28% who are challenged in moving forward. Those who are
successful with their goals use extra funds to pay down debt. Fifty
percent of the individuals surveyed say debt is a financial issue, and
14% say it is a “major” issue. However, those who show progress toward
their resolutions make reducing debt a priority. About one-third of this
group would use any leftover money each month toward paying debt.
Lincoln
found those who are successful with their goals don’t sacrifice
savings. When money is tight, this group is likely to sacrifice
vacations—31% have actually done so in the past year. However, they
never skimp on savings. Nearly 60% say they have never sacrificed
savings. In addition, Americans who are successful with their financial
goals leverage financial products. Those who are progressing with their
resolutions are more likely to have a retirement plan (52%), life
insurance (45%) and at least one investment account (44%).
NEXT: Addressing financial fears
“Those who are progressing toward their goals and resolutions are
first and foremost working to ensure they have a solid foundation to
build upon,” says Dick Mucci, president of Group Benefits at Lincoln
Financial. “Putting some extra money toward debt, savings and insurance
coverage certainly pays off in the long run—and those who have financial
goals understand this.”
Forty-six percent of Americans say they
are excited about having enough money for retirement, but 35% are
intimidated by saving for it. This number is highest for Generation X,
47% of whom say they fear saving for retirement. In addition, 42% of
Americans are afraid of unforeseen health or accident expenses.
“The
things that excite and scare us in regards to money are the same for a
reason—they impact one another and are critically connected,” says
Mucci. “Without the right protections in place, an accident or illness
can derail retirement savings. But if you focus on the outcomes you want
and ensure you take the steps to get there, you’ll wind up in a good
place. An employer-sponsored retirement plan is a great way to build
savings, and insurance coverages offered through the workplace can help
protect against the financial challenges that could come with an
unexpected injury or illness."
The study—Financial Focus: Goals
and Reflections of Today’s Consumer—found most Americans feel
“comfortable” or “stable” when it comes to their money—but a significant
portion of the population (24%) say they are “barely getting by” or
worse.
Results of the 2017 Financial Focus Study are based on an online survey
of 2,500 adults 18 years of age or older across the United States,
conducted in 2017. More findings can be found here.