Products June 27, 2019

MassMutual Pairs with CommonBond on Student Loan Refinancing Program

The program is becoming available on a rolling basis in local communities across the U.S. through MassMutual's network of financial advisers, currently 9,000 strong.

Reported by

MassMutual has partnered with CommonBond to offer a new student loan refinancing program with a rate advantage. The program is becoming available on a rolling basis in local communities across the U.S. through MassMutual’s network of financial advisers, currently 9,000 strong.

MassMutual notes that student loan debt in the U.S. is now over $1.5 trillion, which prevents many people from saving for the future. Many MassMutual financial advisers work with clients who have student loan debt on a daily basis, and now with this program, they can engage in a broader discussion and set of strategies to help them save and pay for what’s important in their lives.

“Paying off student debt is often the first significant financial obligation for millions of Americans to achieve their goals in life,” says John Vaccaro, head of MassMutual Financial Advisors and the father of two Gen Zers. “With this program and through our broader offerings, younger generations have access to tools they need to reduce student debt and get on the path to a sound financial future. As an example, reallocating even $100 a month from the time you graduate college to the time you retire can lead to six-figure savings.”

Through a seamless borrowing experience and options for lower monthly payments and lower interest rates, CommonBond opens the door for individuals with student loan debt to achieve other financial objectives. This new program enables people to potentially pay off their loans faster and save thousands of dollars in interest. And, when someone refinances, CommonBond funds the education of a student in the developing world through its “Social Promise.”

Compliance June 27, 2019

Gucci to Pay $1.2M to Settle Excessive Fee Lawsuit

Of that amount, $395,000 will go to class counsel, and there were no conditions of change to plan design or processes in the settlement agreement.

Reported by

Gucci will pay $1.2 million to settle a lawsuit alleging the company and its benefits committee breached their fiduciary duties under the Employee Retirement Income Security Act (ERISA) by offering plan investments with excessive fees, among other things.

The defendants were accused of charging excessive administrative and investment fees to plan participants. In particular, the plaintiff claimed the defendants failed to “fully disclose to participants the expenses and risks of the Plan’s investment options; breached their fiduciary duties under ERISA by allowing unreasonable expenses to be charged to participants for administration of the Plan; and breached their fiduciary duties under ERISA by selecting and retaining opaque, high-cost, and poor-performing investments instead of other available and more prudent alternative investments.”

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

The complaint also stated that Gucci America was “particularly egregious” in regards to offering proprietary funds from its service provider Transamerica Retirement Solutions as investment options for participants.

Of the gross settlement amount, $395,000 will go to class counsel and $5,000 will go to the plaintiff as compensation for class representation, upon final approval of the court.

The settlement agreement says the defendants admit no wrongdoing or liability with respect to any allegations in the complaint.

There were no conditions of change to plan design or processes in the settlement agreement as has been seen in a few other cases that have settled.

The lawsuit against Gucci is an example of the trend of excessive fee lawsuits moving to smaller plans. A lawsuit filed by a participant in the Checksmart Financial 401(k) Plan was time-barred by a federal district court, and a $500,000 settlement was reached in a lawsuit alleging that fiduciaries to the $500 million 401(k) program offered by Pioneer Natural Resources USA breached their ERISA duties regarding investments and investment fees.

More recently, a participant in the Greystar 401(k) Plan filed a proposed class action excessive fee lawsuit against the firm. In 2017, the Greystar plan submitted financial information and other forms to the federal government under plans with assets between $100 million to $250 million.

«