Deals & People July 15, 2016

Retirement Industry People Moves

EPIC Advisors names director of client service; MassMutual names head of workplace distribution; and advisory firm offers financial management services to BancAlliance members.
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EPIC Advisors, Inc. has named Spiro J. Theodorakakos as its director of client service. Jeff Gillette, who previously performed the role, as well as that of director of finance, will focus solely on finance.           

As director of client service, Spiro will lead EPIC’s team of relationship managers, account managers, and client service specialists. Spiro joined EPIC in 2007 as a client administrator. Since then he has excelled in multiple client service, relationship management, and sales positions, most recently serving as a relationship manager. Prior to joining EPIC he spent time at Paychex in the 401(k) administration and service department.

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“With his personal and passionate approach to client service, Spiro embodies EPIC’s commitment to providing world-class service and premium retirement plan solutions,” says Manny Marques, president of EPIC. “His experience and personal devotion to his client’s and EPIC’s success makes him the ideal leader for our service team.”

Spiro has earned the Qualified 401K Administrator (QKA) and Qualified Plan Financial Consultant (QPFC) designations from the American Society of Pension Professionals and Actuaries (ASPPA) as well as the Accredited Investment Fiduciary (AIF) designation from fi360.

NEXT: PSCA Names New Directors

The Plan Sponsor Council of America (PSCA) announced the appointment of three new members to its board of directors.

Brandon Diersch is group portfolio manager (Capital Markets) at Microsoft in Redmond, Washington. Diersch serves on PSCA’s Investment and Non-Qualified Deferred Compensation committees, spoke at PSCA’s 69th annual conference, and will host PSCA’s Seattle City Event in September.

Robin Hope is director of human resources at Haag Engineering in Dallas, Texas. Hope is a PSCA member and has more than 20 years’ experience in human resource leadership.

Dawn Rich is director of benefits at Cardinal Health in Columbus, Ohio. Rich has more than 20 years’ experience managing employee benefit plans for large organizations.

“We are pleased to add these experienced leaders to our board,” says Steve McCaffrey, PSCA’s board chairman. “We are fortunate that these professionals are willing to help us advance our strategic initiatives, and serve the interests of the nation’s retirement plan sponsors and participants.”

Terms for new directors generally run three years.

NEXT: MassMutual Names Head of Workplace Distribution

Massachusetts Mutual Life Insurance Co. (MassMutual) has named Hugh O’Toole as head of workplace distribution.

O’Toole, a senior vice president, now leads all distribution and customer acquisition functions for MassMutual’s retirement plans and workplace insurance businesses, including the retirement and workplace sales teams, sales engineering and adviser engagement. He reports to Eric Wietsma, head of workplace solutions.

“Hugh brings extraordinary vision and focus to MassMutual’s goal of becoming the leading provider of holistic benefits solutions for employers and their employees,” Wietsma says. “As part of those efforts, we want to build stronger relationships with our key third-party distribution firms as well as the newly expanded MassMutual Financial Network. Our distribution capabilities, combined with our innovative workplace tools, clearly differentiate us in the marketplace.”

O’Toole is a veteran of MassMutual, having served in a variety of leadership roles for the retirement plans business. Most recently, O’Toole headed the Viability Advisory Group, which MassMutual purchased in November 2015. Previously, O’Toole served as head of sales for retirement plans for seven years, leaving in July 2014 to form Viability.

NEXT: Advisory Firm Offers Financial Management Services to BancAlliance Members

Personal Capital, an online financial advisory firm, and Alliance Partners, which manages the BancAlliance network, a national consortium of more than 200 community banks, announced a partnership.

Members of the BancAlliance network will now be able to offer their customers access to Personal Capital’s suite of personal finance tools and digital wealth management services, all wrapped in a co-branded experience. “This partnership is designed to broaden the scope of products and services that member banks currently offer to their customers, and provide bank customers with enhanced ways to understand, grow and manage their net worth,” the announcement said.

“We’re excited to provide our members with exceptional digital tools as they continue to plan for retirement,” says Brian Graham, CEO of BancAlliance. “Financial planning is complicated and something many people delay. With Personal Capital, we are able to give our members the best tools available today to help their customers plan for their own future. Moreover, our members will gain an entirely new marketing channel through Personal Capital.”

BancAlliance member banks cover 40 states and hold an average of $1.5 billion in assets.

To learn more about Personal Capital, visit www.personalcapital.com.

Compliance July 15, 2016

401(k) Participant Sues Target over Company Stock

Recognizing the new pleading standards set forth in Fifth Third v. Dudenhoeffer, the lawsuit suggests alternative actions plan fiduciaries could have taken rather than continuing to allow investments in company stock.
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A proposed class action lawsuit filed by a participant in Target Corporation’s 401(k) plan alleges the company violated its fiduciary duties under the Employee Retirement Income Security Act (ERISA) by continuing to allow participants to invest in the company stock fund when it was no longer prudent.

The class period is from February 27, 2013, to May 19, 2014, and the complaint cites failures in the company’s Canadian operations and failures to disclose the problems as reasons Target stock was trading at artificially inflated prices. The stock price precipitously dropped when failures were disclosed.

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As other courts have recognized that the new pleading standards set forth in the Supreme Court’s opinion in Fifth Third v. Dudenhoeffer require plaintiffs to suggest alternative actions plan fiduciaries could have taken that would not have violated securities laws or been perceived as doing more harm than good to the plan, the Target complaint offers several actions the company could have taken to prevent participant losses in the company stock fund.

The complaint says defendants could have (and should have) directed that all company and plan participant contributions to the company stock fund be held in cash or some other short-term investment rather than be used to purchase Target stock. “A refusal to purchase company stock is not a ‘transaction’ within the meaning of insider trading prohibitions and would not have required any independent disclosures that could have had a materially adverse effect on the price of Target stock,” the complaint says.

Defendants also should have closed the company stock fund itself to further contributions and directed that contributions be diverted into prudent investments based on participants’ instructions or, if there were no instructions, into the plan’s default investment option, the complaint suggests. Alternatively, according to the complaint, defendants could have disclosed (or caused others to disclose) Target’s true problems with its Canadian Segment so Target stock would trade at a fair value.

Other recommended actions noted in the lawsuit include:

  • Defendants should have sought guidance from the Department of Labor (DOL) or Securities and Exchange Commission (SEC) as to what they should have done;
  • Defendants could have resigned as plan fiduciaries to the extent they could not act loyally and prudently; and/or
  • Defendants should have retained outside experts to serve either as advisers or as independent fiduciaries specifically for the fund.

The complaint in Knoll v. Target Corporation is here.

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