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Just a reminder that the deadline for employers to send these notices is October 14. If you need more information, click here or call the office.

Lowes 401k suit

The suit is ongoing – this is the kind of thing we work hard to avoid for our clients.

The core of the fiduciary breach complaint is summarized as follows in case documents: “Lowe’s imprudently selected and retained the Hewitt Growth Fund for the Plan, in consultation with Hewitt (which served as the plan’s fiduciary investment consultant), despite the fact that (1) the Hewitt Growth Fund was a new and largely untested fund at the time it was added to the plan; (2) the Hewitt Growth Fund was underperforming its benchmark at the time it was added to the plan and continued to underperform after it was added to the plan; and (3) the Hewitt Growth Fund was not utilized by fiduciaries of any similarly-sized plans and was generally unpopular in the marketplace.”

For the full article, click here

Walgreens sued over underperforming funds

The complaint says the target-date funds used in the plan and as the designated default investment were underperforming since they were selected, resulting in a great loss to participants.
By Rebecca Moore / PLANSPONSOR

The complaint notes that as fiduciaries, the Walgreen defendants must prudently curate the plan’s investment options. They must regularly monitor plan investments and remove ones that become imprudent. The lawsuit alleges that the defendants breached these fiduciary duties by adding to the plan in 2013 a suite of poorly performing funds called the Northern Trust Focus Target Retirement Trusts and keeping these funds in the plan despite their continued underperformance.

Despite a market “teeming with better-performing alternatives,” the plaintiffs say, Walgreen selected the Northern Trust Funds, which already had a history of poor performance. According to the complaint, they had significantly underperformed their benchmark indexes and comparable target-date funds since Northern Trust launched the funds in 2010.

The lawsuit contends it was predictable that the Northern Trust Funds continued underperforming through the present. For nearly a decade, these investment options performed worse than 70% to 90% percent of peer funds, according to the complaint. The plaintiffs say not only does Walgreen refuse to remove the funds, it has actually added Northern Trust funds to the plan’s investment lineup, and selected the Northern Trust target-date funds as the plan’s default investment.

Additional Items through High Deductible plan at no charge

The IRS has issued new guidelines, expanding the field of what is considered preventive care to include an additional list of 14 new items and services. This means that certain treatments, specifically for conditions such as heart disease, asthma, diabetes, osteoporosis, liver disease and depression, now can be covered as preventive care by a HDHP without affecting Health Savings Account (HSA) eligibility.

Surprise out of network bills

Out-of-network healthcare can be costly and is often something patients try to avoid. But when an emergency occurs, a visit to an in-network hospital can still result in an unpleasant surprise — a highly expensive medical bill because the patient was treated by an out-of-network physician.

Surprise billing and related costs are increasing among inpatient admissions and emergency department visits to in-network hospitals. From 2010 through 2016, 39% of more than 13 million trips to the emergency department at an in-network hospital by privately insured patients resulted in an out-of-network bill, a new study published by medical journal JAMA Internal Medicine finds.

“This is becoming a bigger and bigger issue,” says Kim Buckey, president of client services at DirectPath. “We’ll probably see more employers working at state and federal level to put some pressure on their representatives to do something about this. They’re paying their share of these higher out-of-network costs and it’s hitting their bottom lines as well as their employees.”

September 2019
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Reeve Conover is a Registered Representative. Securities offered through Cambridge Investment Research, Inc., a Broker/dealer member FINRA/SPIC. Cambridge and Conover Consulting are not affiliated. Licensed in SC, NC, NY, CT, NJ, and CA. - SIPC - Brokercheck