The Markets November 29, 2007

MG Trust Introduces New Suite of Target-Date Funds

MG Trust Company, a wholly owned subsidiary of Matrix Financial Solutions, has announced the availability of its new target-date collective funds.
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The suite of MG Trust Target Date Collective Funds include eight diversified portfolios with target retirement dates ranging from 2015 to 2050, in five-year increments. The funds are structured to provide participants with the appropriate levels of risk to produce positive returns throughout different stages in their careers, according to MG Trust Company, a wholly owned subsidiary of Matrix Financial Solutions.

The funds are powered by the industry leading research and due diligence of Prima Capital and are based upon Prima Capital’s proprietary research model technique, MG said in a press release.

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“Embedding Prima Capital’s high-level research and due diligence into the MG Trust Target Date Collective Funds is another competitive advantage and great benefit to the end user. Prima Capital typically works solely with major banks and institutions. We are now able to offer the same level of service to retirement plan participants,’ said John Moody, President, Matrix Settlement and Clearance Services, in the announcement.

According to MG Trust, additional highlights of the MG Trust Target-Date Collective Funds include:

  • 100% open architecture platform, with no conflicts of interest in manager selection or portfolio structure
  • Deep research and transparent advice delivered through cutting-edge technology to allow the TPA or retirement adviser to better serve the needs of the plan sponsor
  • Ongoing monitoring of managers which enables best practices management and regular portfolio rebalancing
  • Fully disclosed fees
  • Institutional quality research and due diligence provided by Prima Capital
Compliance November 29, 2007

West Virginia Adviser Barred from ERISA Work

An investment adviser from Charleston, West Virginia accused of misusing $600,000 from a 401(k) plan he trusteed has agreed that he will no longer work with Employee Retirement Income Security Act (ERISA) plans.
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Chief U.S. District Judge Joseph R. Goodwin of the U.S. District Court for the Southern District of West Virginia approved a consent order with Knox Fuqua, the owner of the Charleston investment firm KHF Advisors LLC settling the matter. According to a U.S. Department of Labor (DoL) news release, Goodwin’s order provides that KHF won’t serve in a fiduciary capacity or as a consultant for compensation to any ERISA plan.

Fuqua worked with the Community Health Systems 401(k) Plan, sponsored by a Beckley, West Virginia health care provider, according to court documents.

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He was accused of using plan assets to acquire certificates of deposit in June 2005 in the name of his private investment fund, the Fixed Income Fund. He then used the CDs as security for a loan from the bank to the Fixed Income Fund, the DoL alleged.

After Fuqua didn’t pay his interest due on the loan, the bank threatened to liquidate the CDs as payment for the loan. The DoL also alleged the bank participated in the improper actions of Fuqua because it knew that the assets in the plan account belonged to the 401(k) plan.

In 2006, the DoL a temporary restraining court order requiring that two certificates of deposit representing the plan assets be held until the case was resolved.

“Our legal action bars this defendant from holding a position of authority that presents an opportunity to misuse the assets of employee benefit plans in the future,’ said Mabel Capolongo, director of the Philadelphia Regional Office of the Employee Benefits Security Administration (EBSA).

Goodwin’s order in Chao v. Fuqua Civil Action No. 2:06-cv-0137 is here.

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