Hartford Scores a Hat Trick

The Hartford has managed a hat trick, announcing its third acquisition this month.

The acquisition of the defined contribution recordkeeping alliance business of Atlanta, Georgia-based Princeton Retirement Group, when completed, will position the Hartford to provide recordkeeping services to large financial firms which offer defined contribution plans to their clients. With the transaction, The Hartford adds an additional $7 billion in retirement plan assets across over 720 plans and approximately 170,000 plan participants, according to a press release.

“Our ability to grow our retirement plans business depends in part on being able to provide retirement programs under The Hartford’s brand while offering our services to companies that offer retirement plans under their own brand.” said John Walters, president of The Hartford’s U.S. Wealth Management Group and co-COO of The Hartford’s life operations. “As our third retirement plans acquisition in December, this agreement allows us to establish a foothold in a growing and profitable segment of the market while rounding out our service capabilities. We welcome the employees of the alliance business of the Princeton Retirement Group.”

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

“We are excited that through this transaction, we are able to offer the alliance partners of Princeton Retirement Group new services that can bring significant capabilities and opportunities for business growth.” said Michael Falcon, Managing Director and Head of the Retirement Group at Merrill Lynch, in making the announcement. “We’re pleased to continue to serve the majority of the Princeton Retirement Group business that is not part of the transaction through our core integrated benefits platform. This transaction offers us the opportunity for continued investment in growing our core capabilities for the retirement marketplace.”

Future Dispositions

On the close of the transaction, expected to occur during the first quarter of 2008, the approximately 200 alliance business employees will be offered positions with The Hartford. In addition, the company intends to maintain its current offices in Atlanta and Winston-Salem, NC. The terms of the agreement were not disclosed and it is not expected to be material to the company’s operations.

The alliance business of the Princeton Retirement Group, which is owned by Merrill Lynch, is a defined contribution recordkeeper based in Atlanta, Georgia, and Winston-Salem, North Carolina. The business provides recordkeeping and administrative services to other financial institutions’ retirement plans.

This announcement joins The Hartford’s recently announced agreements to purchase TopNoggin, an Ohio-based defined benefit administrative and consulting firm (See Hartford Extends DB Technology With Acquisition), and Boston-based Sun Life Retirement Services (U.S.), Inc. (RSI) (See Sun Life Sells US RK Biz to The Hartford).

Another ERISA Litigator Circles Morgan Stanley

The latest ERISA litigation firm to probe the company stock investment in the Morgan Stanley 401(k) Plan and the Morgan Stanley Employee Stock Ownership Plan is Milberg Weiss LLP.

The firm says it is “investigating whether certain fiduciaries of the plans may have violated the Employee Retirement Income Security Act of 1974 (“ERISA”) in at least two ways:

  1. by continuing to offer Morgan Stanley common stock as a 401(k) Plan investment option for participant contributions when it was imprudent to do so, and
  2. by maintaining the ESOP’s pre-existing heavy investment in Morgan Stanley equity when company stock was no longer a prudent investment for the 401(k) Plan and the ESOP.”

According to a press release, the Milberg investigation relates to “…whether certain fiduciaries of the plans knew or should have known that Morgan Stanley was concealing its large exposure to highly risky Collateralized Debt Obligations and the subprime mortgage market crisis, which has rendered Morgan Stanley common stock an imprudent, inappropriate and risky investment for the retirement savings of the 401(k) Plan’s and ESOP’s participants.” The firm says a case against Morgan Stanley and the fiduciaries of the plans has been filed in federal court in New York.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

Other Suits

Earlier this week Stull, Stull & Brody also announced the filing of a suit that is seeking class action status under the Employee Retirement Income Security Act (ERISA), on behalf of 401(k) participants who were in the Morgan Stanley Stock Fund investment option (see Morgan Stanley Hit with 401(k) Stock Suit). On December 14, 2007, Wolf Haldenstein Adler Freeman & Herz LLP filed a class action lawsuit (Egan v. Morgan Stanley & Co., et al.) in the United States District Court for the Southern District of New York, on behalf of all participants and beneficiaries of the Morgan Stanley 401(K) Plan from December 1, 2005 to present, whose accounts included investments in the stock of Morgan Stanley.

That suit named as defendants Morgan Stanley, Morgan Stanley & Co. Inc., certain officers and directors of Morgan Stanley & Co. Inc., the Global Director of Human Resources of Morgan Stanley, and the Investment Committee of the Morgan Stanley 401(K) Plan.

«