For Better or Worse- Lack of Spousal Consent Can Cost You

A woman who claimed that a plan distribution form indicating her consent to her late husband’s distribution election was never properly notarized and therefore invalid has the agreement of a federal judge

The husband had elected a split distribution: one half in a lump sum and one half in an annuity without survivor benefits. The husband passed away after having received the lump sum distribution and two annuity payments. The wife then sued over the waiver's validity.

ERISA requires that the distribution waiver form be witnessed by a plan representative or a notary. In this case the notary had stamped the document without the wife present The US District Court threw out the waiver form signed by the woman, finding it had not been properly witnessed by a plan representative or a notary as required by ERISA.

The form did not include a standard declaration that the wife had executed the form in front of the notary. The plan argued that the requirement of a witness was a mere technicality that should not invalidate the wife's signature, but the court disagreed.

While acknowledging that outside of ERISA courts have found flaws in notarizations to be insufficient to defeat the validity of a document, the court noted that those cases "did not involve the ERISA strict requirements leading to the loss of benefits by a surviving spouse."

The case is Alfieri v. Guild Times Pension Plan, 2006 E.D.N.Y. 2006.

For more information visit The Retirement Center

Do You Make This Mistake When You Reveal Your Age to the 401k Administrator?

For years, Maria Zdzienicki told her employer, Con Edison, that she was born in 1939. She provided Con Edison with sworn documents, such as immigration papers, confirming this to be true. Years later, when her pension benefits were about to begin, she reportedly told the company that she had actually been born five years earlier, in 1934. She claimed that she was therefore entitled to a larger pension benefit. In support of this claim, she submitted copies of her Polish birth certificate, Polish marriage license, and Polish passport.

The Con Edison pension plan administrator denied her request for additional benefits, citing the reason that there was sufficient evidence in the record to conclude that Maria was born in 1939, irrespective of what the Polish documents indicated.

Maria sued in federal court under ERISA, arguing that the plan administrator's decision was arbitrary and capricious. The parties stipulated that the administrator did not attempt to investigate the authenticity of the Polish documents. Zdzienicki conceded that the plan granted discretionary authority to the administrator to determine eligibility for benefits, decide factual questions, and resolve issues regarding plan administration.

In ruling for the defendants, the federal court found that "the plan administrator's decision to calculate Zdzienicki's pension benefits was not arbitrary and capricious and therefore did not violate ERISA."
The court explained that the administrator's decision was supported by voluminous documentary evidence, including Zdzienicki's sworn statement at the outset of her employment, her United States government issued Certificate of Naturalization, her New York State driver's abstract, her diploma from the Warsaw University of Technology, her 1990 COBRA forms, her employment authorization form and her 1993 medical laboratory reports. Also supporting the decision was the fact that Zdzienicki did not attempt to correct Con Edison's records of her date of birth until April 2003, when her pension payments were about to begin. This was 23 years after she first told the company that she was born on July 30, 1939.

It would not have been unthinkable for the Con Edison administrator to conclude that if Zdzienicki were truly born in 1934, she would have informed the company of that fact in 1990, when it twice sent her forms showing that her pension benefits would be calculated using 1939 as her year of birth, or at least in 1999, when, had Zdzienicki been born in 1934, she would have turned 65 and thus would have been entitled to pension payments at that time. Thus, "a reasonable mind" could view the evidence in the administrative record "as adequate to support the conclusion" that Zdzienicki was born on July 30, 1939.

The cite is Zdzienicki v. Consolidated Edison Co. of New York, 2006 WL 2482668 (S.D.N.Y. Aug. 29, 2006).


For more information , Contact Lawrence Groves @ The Retirement Center.http://www.solo-k.com
Street Smart Benefit Strategies

Why Do I Need my Spouse's Consent for 401(k) Loan

As a spouse has an interest in the accrued benefit of a participant, the plan does not satisfy the survivor annuity requirement unless the plan provides that, at the time the participant's accrued benefit is used as security for a loan, spousal consent to such use is obtained. Consent is required even if the accrued benefit is not the primary security for the loan.

No spousal consent is necessary if, at the time the loan is secured, no consent would be required for a distribution under $5,000. Spousal consent is not required if the total accrued benefit subject to the security is not in excess of the cash-out limit ($5,000) in effect under 1.411(a),11(c)(3)(ii).

The spousal consent must be obtained no earlier than the beginning of the 90-day period that ends on the date on which the loan is to be so secured. The consent must be in writing, must acknowledge the effect of the loan and must be witnessed by a plan representative or a notary public.

Participant consent is deemed obtained at the time the participant agrees to use his accrued benefit as security for a loan for purposes of satisfying the requirements for participant consent under sections 401(a)(11), 411(a)(11) and 417.

Change in status.

If spousal consent is obtained or is not required at the time the benefits are used as security, spousal consent is not required at the time of any setoff of the loan against the accrued benefit resulting from a default, even if the participant is married to a different spouse at the time of the setoff. Similarly, in the case of a participant who secured a loan while unmarried, no consent is required at the time of a setoff of the loan against the accrued benefit even if the participant is married at the time of the setoff.

Renegotiation.

For purposes of obtaining any required spousal consent, any renegotiation, renewal, or refinancing that revises a loan shall be treated as a new loan made on the date of the renegotiation, refinancing, renewal, or other revision.


Internal Revenue Code 1.401(a) -20 Q & A 24

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http://www.solo-k.com for additional information

Fidelity Bonds under The Pension Protection Act of 2006

Fidelity Bonds under the
Pension Protection Act of 2006

Before PPA-2006, each person subject to the bonding
requirement had to be covered by a bond in an
amount equal to at least 10% of the plan assets
handled by such person, with a minimum bond
amount of $1,000, and a maximum of $500,000

PPA-2006 raises the maximum bond amount to
$1,000,000 for a plan that holds employer securities,
regardless of whether a bonded person actually
handles employer securities. Although a technical
explanation states that Congress did not consider a
plan to hold employer securities if it owns them
through a broadly diversified fund, the scope or
effect of this indication is unclear. The technical
explanation refers to mutual funds and index funds.
Since Mutual Funds are not considered to hold Plan Assets,
having employer securities in a Mutual Fund does not incur the
higher bonding. However, Hedge Funds holding Employer Securities
as an option under the plan would be subject to the higher bondng requirement.

For more information visit Street Smart Benefit Strategies

Recovery Funds for 401k Plans

The Securities and Exchange Commission (SEC) has entered into settlement agreements with certain mutual funds relating to alleged late trading and market timing activities. Pursuant to the settlements, distribution funds have been created to make distributions to affected qualified retirement plans. For each distribution fund, an independent distribution consultant has been appointed to distribute the settlement fund

This page lists the SEC enforcement cases in which a Receiver, Disbursement Agent, or Claims Administrator has been appointed. Funds that are recovered and available for investors will be distributed according to an approved plan.

For example:

1. Funds from Banc of America totaled $350,000,000,


2. from Banc One totaled $50,000,000,


3. from Capital Alliance totaled $250,000,000,


4. from MFS totaled $50,000,000 and


5. from Bridgeway Capital Management totaled $5,000,000.

In addition to seeing whether a claims fund has been established
for each orgnaization listed, you may want to find out whether a private class action has been filed against the company you invested in.

For additional information, please visit the SEC website: http://www.sec.gov/divisions/enforce/claims/alphatelcom.html

• 12daily Pro

• 4NExchange, LLC, Paul R. Grant and Ronald Bassett

• A.B. Financing Investments, Inc. (ABFI) and Anthony Blissett

• Advanced Financial Services, Larry W. Tyler, et al.

• Alanar, Inc., et al.

• Alliance Capital Management, L.P.

• Alpha Telcom, Inc.

• American Express Financial Advisors Inc.

• American Express Financial Corporation

• Ashbury Capital Partners, L.P., Ashbury Capital Management, L.L.C., and Mark Yagalla

• Banc of America Capital Management, LLC, BACAP Distributors, LLC, and Banc of America Securities, LLC

• Banc One Investment Advisors Corporation

• Bridgeway Capital Management, Inc. and John Noland Ryan Montgomery

• Cash 4 Titles, Charles Richard Homa, and Michael Gause

• Cash Link Systems, Inc. et al.

• Centennial Technologies, Inc. Insider Trading‚ÄîEmanuel Pinez

• Charis Johnson, LifeClicks, LLC, and 12daily Pro

• CIBC World Markets Corp. and Canadian Imperial Holdings Inc.

• Colin Nathanson, et al.

• Columbia Management Advisors, Inc. and Columbia Funds Distributor, Inc.

• Computer Associates International, Inc.

• Credit Bancorp, Ltd.

• Credit First Fund, LP, David R. Lund, et al.

• Cross Financial Services, Inc.

• Cyprus Funds, Inc. and Latin American Services Co., Ltd.

• David M. Mobley/Maricopa Investment Fund, Ltd.

• David Tanner d/b/a/ Capital Enhancement Club, et al.

• D. H. Blair & Co, Inc

• Donald Matthew Greth and Brenda B. Melton

• D.W. Heath & Associates, Inc. et al.

• Edward D. Jones & Co.

• Elfindepan S.A., et al

• Emvest Mortgage Fund, LLC, Emvest, Inc., and Milon Lyle Brock

• Enron

• Euro Security Fund Distribution Plan

• Federated Investment Management Company, Federated Securities Corp. and Federated Shareholder Services Company

• Fidelity National Capital Investors, Inc.

• First American Reliance, Inc.

• First Choice Management Services, Inc. and Gary Van Waeyenberghe

• First Command Financial Planning

• Franklin Advisers, Inc.

• Freedom Financial, Inc., et al.

• Genesis Leasing IX, Inc. et al.

• Geneva Group and Nicholas Garcia

• Glen Eugene Miller, LD&B Management, Inc., Rich Barlow, Acquire Venture Fund Group, et al.

• Global Express Capital Real Estate Investment Fund I, LLC et al.

• Global Money Management, L.P., LF Global Investments, LLC, and Marvin Friedman

• Global Telelink Services, Inc.

• Great White Marine & Recreation, Inc.

• Grant Thornton LLP, Doeren Mayhew & Co. P.C., Peter M. Behrens, CPA, Marvin J. Morris, CPA and Benedict P. Rybicki, CPA

• Health Maintenance Centers, Inc. et al.

• Philip D. Phillips, individually and d/b/a American Heartland Sagebrush Securities Investments Inc. and Sagebrush Securities, American Heartland, Inc., et al.

• Pilgrim Baxter & Associates, Ltd., Gary L. Pilgrim and Harold J. Baxter

• PinnFund USA, Inc.

• Southern Financial Group, Inc.

• Spear & Jackson, Inc.

• Steve Madden Ltd.

• Strong Capital Management, et al.

• Superior Opportunities, Inc.

• Systems of Excellence and Charles O. Huttoe

• Terry L. Dowdell, et al.

• TLC Investments & Trade Co., et al.

• Travis E. Correll, individually and doing business as Horizon Establishment, et al.

• Tri Energy et al.

• Uniprime Capital Acceptance, Inc. and Alfred J. Flores

• Viatical Capital, Inc., d/b/a Life Settlement Network, Life Investment Funding Enterprises, Inc., Charles D. York, and Robert K. Coyne

• Virtual Cash Card, et al.

• Virtual Private Marketplace, Ltd., Gary L. Moody, Steven R. Moody, and Billpay Systems LLC

• Vivendi Universal, S.A.

• Wheat, First Securities, Inc. f/k/a First Union Capital Markets Corp. and Teressa L. Cawley

• William L. Brotherton and International Business Consortium, Inc.

• World Class Limousines, Inc., 1-800-GET-LIMO, Inc. and 1-800-GET-LIMO Service, Inc.

• WorldCom


• Heartland Financial Services, Inc.

• Homestore, Inc.

• Horizon Establishment

• Huntington Bancshares, Inc.

• i2 Technologies, Inc.

• The Infinity Group Company

• International Capital Management, Inc.

• International Equity Advisors, LLC and Richard Roger Lund

• International Funding Association, Ronald Stephen Holt, et al.

• International Management Associates, LLC et al.

• Invesco Funds Group, Inc. and AIM Advisors, Inc.

• Invest Better 2001

• IPIC International, et al.

• Itex Corporation, et al.

• Jack Brown, Jules Fleder et al.

• James R. Harrold, et al.

• James P. Lewis, Jr., Financial Advisory Consultants, et al.

• Janus Capital Management LLC

• John Wayne Zidar et al.

• Jordan Enterprises LLC, et al.

• J.T. Wallenbrock & Associates, Citadel Capital Management Group, Larry Toshio Osaki, and Van Y. Ichinotsubo

• K.L. Group, LLC, et al.

• Kenneth Roy Weare, also known as Roy Weaver, J&K Global Marketing Corporation, and AAA-Auction.com, Inc.

• KS Advisors, et al.

• Le Club Prive S.A.

• Learn Waterhouse, Inc. et al.

• LinkTel Communications, Inc.

• Lotus Development Corporation

• Mark D. Montana, individually and d/b/a M & M Properties, and M & M Financial, Inc., et al.

• Massachusetts Financial Services Co., John W. Ballen, and Kevin R. Parke

• Megafund Corporation

• Merrill Scott & Associates, Ltd., et al.

• Michael Lauer, Lancer Management Group, LLC, and Lancer Management Group II, et al.

• Millennium Financial, Ltd. and Newpont Fiduciaries & Nominees, S.A.

• Mobile Billboards of America, Inc., et al.

• Morgan Stanley DW, Inc.

• Mutual Benefits Corp., et al.

• MX Factors, LLC et al.

• Net World Marketing, Inc.

• New Times Securities Services, Inc, New Age Financial Securities, Inc. and William Goren

• NJ Affordable Homes Corp. and Wayne Puff

• North American Medical Products, Inc.

• Northshore Asset Management LLP, et al.

• Ohana International, Inc., Financial Solutions, and Christiano Hashimoto

• PA Fund Management LLC f/k/a PIMCO Advisors Fund Management LLC et al.

• Par Three Financial Group, Inc. and Melvin D. Ruth

• Pension Fund of America LC, et al.

• Presto Telecommunications, Inc.

• Putnam Investment Management LLC

• Putnam Investment Management LLC

• Qwest Communications International Inc.

• Resource Development International LLC, et al.

• RS Investments Management, Inc. et al.

• Sebastian International Enterprises, Inc.

• W.L. Ware Enterprises and Investments, Inc. and Warren L. Ware

• Web Hosting Headquarters Partnership

• Wellington Bank and Trust, Ltd. et al.

• Wellness Universe, et al.

• Wellspring Capital Group, Inc. and Blake A. Prater

Specific Examples of penalties and profit disgorgement include:

Admin. Proc. File No. 3-11818

$375,000,000 from Bank of America

(image placeholder)
In the Matter of
Banc of America Capital Management, LLC, BACAP Distributors, LLC, and Banc of America Securities, LLC,
Respondent.

(image placeholder)
On the basis of this Order and Respondents' Offers, the Commission finds that:
Summary

1. From as early as July 2000 and continuing through July 2003, Banc of America Capital Management, LLC ("BACAP") and its predecessor entity Banc of America Advisers, LLC, the investment adviser to all mutual funds, or series, in the Nations Funds mutual fund complex (the "Nations Funds") as well as BACAP Distributors, LLC ("BACAP Distributors"), the distributor and administrator for Nations Funds, allowed certain market timing clients to engage in short-term or excessive trading and never disclosed this fact to other investors.

Administrative Proceeding File No.3-11359

$250,000,000 from Alliance Capital
(image placeholder)
In the Matter of
ALLIANCE CAPITAL MANAGEMENT, L.P.,
Respondent.
(image placeholder)AMENDED ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTIONS 203(e) AND 203(k) OF THE INVESTMENT ADVISERS ACT OF 1940 AND SECTIONS 9(b) AND 9(f) OF THE INVESTMENT COMPANY ACT OF 1940, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER

I.Summary

1. This proceeding concerns Alliance Capital's negotiated, but undisclosed, arrangements with market timers -- arrangements that benefited Alliance Capital to the detriment of investors in mutual funds managed by Alliance Capital. In those arrangements, Alliance Capital provided "timing capacity" in mutual funds to known timers in return for or in connection with the timers' investments of "sticky assets" in Alliance Capital managed hedge funds, mutual funds and other investment vehicles, from which Alliance Capital earned management fees. Alliance Capital's single biggest timer received at its height $220 million in timing capacity in Alliance Capital mutual funds in return for investments at agreed ratios in hedge funds managed by some of the same portfolio managers. The prospectuses for these mutual funds gave the misleading impression that Alliance Capital sought to prevent timing in these mutual funds. Alliance Capital failed to disclose that, in fact, it negotiated agreements to permit timing in return for the sticky assets. At their height in 2003, Alliance Capital had over $600 million in approved timing in its mutual funds. Alliance Capital permitted these arrangements despite awareness of the harmful effects timing can have on mutual funds and the ability to detect and prevent inappropriate timing in mutual funds. By entering into these arrangements, Alliance Capital breached its fiduciary duty to the mutual funds in which it arranged the timing.
2. In addition to the arrangements, Alliance Capital accommodated timers through other means. In part in order to enable the portfolio manager of one mutual fund to deal with the effects of timers in his fund, rather than simply prohibit timing in the fund, Alliance Capital obtained approval of the mutual fund's board and shareholders to lift a restriction on futures trading in the fund. Alliance Capital failed to disclose to the fund's board or shareholders that one of the reasons for recommending the proposal was to accommodate better the Alliance Capital-approved timers.
3. Finally, Alliance Capital provided material nonpublic information about the portfolio holdings of certain mutual funds to at least one of the timers. This disclosure enabled that timer to profit from market timing in declining markets.

Administrative ProceedingFile No. 3-11450
$50,000,000 from MFS
(image placeholder)
In the Matter of
Massachusetts Financial Services Company,
Respondent.
(image placeholder) NOTICE OF PROPOSED PLAN FOR THE DISTRIBUTION OF A FAIR FUND AND OPPORTUNITY FOR COMMENT

THE PROPOSED PLAN OF DISGORGEMENT

The Distribution Plan generally provides for distribution "fairly and proportionately to the MFS Funds the total disgorgement and penalty ordered in [the Order] based upon the amounts of brokerage commissions coded for fund 'Sales' attributed to each fund." The MFS Funds are the registered investment companies for which MFS is the investment adviser, including the retail mutual funds, registered closed-end funds, MFS Variable Insurance Trust, MFS Institutional Trust, and variable annuity and variable insurance funds known as MFS/Sun Life Series Trust and Compass Accounts. The proposed plan provides that each MFS Fund shall receive a proportionate share of the funds paid by MFS comprised of $1 (one dollar) in disgorgement and a civil money penalty of $50 million (fifty million dollars).
For the Commission, by its Secretary, pursuant to delegated authority.
__________________________Margaret H. McFarlandDeputy Secretary

ADMINISTRATIVE PROCEEDING File No. 3-11530
$50,000,000 From Banc One
(image placeholder)
In the Matter of
BANC ONE INVESTMENT ADVISORS CORPORATION AND MARK A. BEESON,
Respondents.
(image placeholder) ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER PURSUANT TO SECTIONS 203(e), 203(f), AND 203(k) OF THE INVESTMENT ADVISERS ACT OF 1940, AND SECTIONS 9(b) AND 9(f) OF THE INVESTMENT COMPANY ACT OF 1940


The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted pursuant to Sections 203(e), 203(f), and 203(k) of the Investment Advisers Act of 1940 (“Advisers Act”), and Sections 9(b) and 9(f) of the Investment Company Act of 1940 (“Investment Company Act”) against Banc One Investment Advisors Corporation (“BOIA”) and Mark A. Beeson (“Beeson”) (collectively, “Respondents”).


In anticipation of the institution of these proceedings, Respondents have submitted Offers of Settlement (the “Offers”) which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission’s jurisdiction over them and the subject matter of these proceedings, Respondents consent to the entry of this Order Instituting Administrative and Cease-and-Desist Proceedings, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Sections 203(e), 203(f), and 203(k) of the Investment Advisers Act of 1940, and Sections 9(b) and 9(f) of the Investment Company Act of 1940 (“Order”), as set forth below.


On the basis of this Order and Respondents’ Offers, the Commission finds that:

1. From at least March 2002 through April 2003, BOIA, an investment adviser, and Beeson, President and Chief Executive Officer of One Group Mutual Funds (“One Group”) and a senior managing director of BOIA, violated and/or aided and abetted and caused violations of the antifraud provisions of the Advisers Act and the Investment Company Act by: (1) allowing excessive short-term trading in One Group funds by a hedge-fund manager that was inconsistent with the terms of the funds’ prospectuses and that was potentially harmful to the funds; (2) failing to disclose to the One Group Board of Trustees or to shareholders the conflict of interest created when Respondents entered into a market-timing arrangement with a hedge-fund manager that was potentially harmful to One Group, but that would increase BOIA’s advisory fees and potentially attract additional business; (3) failing to charge the hedge-fund manager redemption fees as required by the international funds’ prospectuses when other investors were charged the redemption fees; (4) having no written procedures in place to prevent the nonpublic disclosure of One Group portfolio holdings and improperly providing confidential portfolio holdings to the hedge-fund manager when shareholders were not provided with or otherwise privy to the same information; and (5) causing One Group funds, without the knowledge of the funds’ trustees, to participate in joint transactions raising a conflict of interest in violation of the Investment Company Act.

2. In addition, between June 1999 and May 2003, BOIA further violated the antifraud provisions of the Advisers Act and the Investment Company Act by: (1) allowing excessive short-term trading in One Group funds by a Michigan market-timer that was inconsistent with the terms of the funds’ prospectuses and that was potentially harmful to the funds; (2) failing to disclose to the One Group Board of Trustees or to shareholders the conflict of interest created when BOIA entered into a market-timing arrangement with a Michigan market-timer that was potentially harmful to One Group, but that would increase BOIA’s advisory fees; (3) failing to charge a Texas hedge fund redemption fees as required by the international funds’ prospectuses when other investors were charged the redemption fees; and (4) having no written procedures in place to prevent the nonpublic disclosure of One Group portfolio holdings and improperly providing confidential portfolio holdings to certain other entities.

3. The One Group funds’ prospectuses stated that One Group restricted excessive exchange activity in all One Group funds. BOIA enforced those provisions. But despite the prospectuses’ language, Beeson entered into an agreement with hedge-fund manager Edward J. Stern (“Stern”) pursuant to which Stern executed approximately 300 exchange transactions within certain One Group funds. This agreement was made in the hope that it would lead to additional business from Stern for various BOIA affiliates. The transactions, which occurred between June 2002 and May 2003, earned Stern a profit of approximately $5.2 million. In connection with some of those transactions, BOIA and Beeson also failed to charge Stern approximately $4 million in redemption fees, as required by those funds’ prospectuses.

4. Also despite language of the One Group funds’ prospectuses, from June 1999 to December 2001, BOIA allowed a Michigan market timer to execute approximately 100 exchange transactions in One Group international funds, resulting in a profit to the market timer of approximately $1.24 million. Further, in March 2003, certain BOIA employees allowed a Texas hedge fund to execute two exchange transactions in the international funds without collecting approximately $840,000 in redemption fees required by the prospectuses.

5. Finally, BOIA regularly provided listings of the confidential portfolio holdings of many One Group funds to favored clients (including Stern), prospective clients, and consultants when that information was not provided to the public, to the possible detriment of the funds and


$5,000,000 from Bridgeway Capital Management
____________________________________
In the Matter of : Order Approving Plan of Disgorgement
: Distribution and Appointing Administrator
Bridgeway Capital Management, Inc. and :
John Noland Ryan Montgomery, :
Respondents. :
____________________________________:
On February 10, 2005, the Commission published notice of the Plan of Disgorgement
Distribution (“Plan”) proposed by the Division of Enforcement (“Division”) in this proceeding.
The Plan proposed that $4,407,700 of disgorgement and $458,764 of prejudgment interest paid
by respondent Bridgeway Capital pursuant to the Commission’s Order issued on September 15,
2004, be distributed pro rata among the eligible current and former shareholders of Bridgeway
Capital’s Aggressive Investors 1, Aggressive Investors 2, and Micro-Cap Limited mutual funds,
who were overcharged as a result of the misconduct described in the Commission’s September
15 order.

The Commission received no comments in response to the publication of the Division’s
proposed Plan.
The Division proposes in its Plan, as amended on March 16, 2005, that Stephen Webster,
Assistant District Administrator, Ft. Worth District Office, be designated as Administrator of the
Plan.

Accordingly,
IT IS ORDERED that the Plan is approved; and
IT IS FURTHER ORDERED that Stephen Webster is appointed as Administrator of the
Plan in accordance with the terms of the Plan.
For the Commission, by its Secretary, pursuant to delegated authority.
_____________________________
Jonathan G. Katz
Secretary

Visit http://www.solo-k.com The Retirement Center

Wells Fargo 401k Plans Robbed-Thousands $ Missing

Wells Fargo 401(k) Operations Manager Accused of Robbing 401k Customers Accounts

According to the Web site for KSTP-TV Eyewitness News, a Wells Fargo 401(k) retirement operations manager, has been accused of robbing 401k customer accounts.

The Operations Manager, overseeing the 401k daily fund operations, allegedly disbursed money from dormant 401k accounts and deposited it into his own separate account.

HOW THE 401K ACCOUNTS WERE ROBBED

Point-by-point, this retirement manager eluded what should have been Well s Fargo s own financial controls

• Requested false name changes on dormant accounts,


• Provided false Social Security numbers for the false names, then


• Requested the disbursements from the accounts and


• Reset the account information back to the original owners.

Where were the procedural controls? At each step in this alleged theft, there should have been procedural controls to prevent someone from taking these actions without either an independent review and / or supervisory authorization.

When a 401k plan s administration and assets are at the same organization, the risk of insiders bypassing their own procedural controls is always present.

FIVE ACTIONS TO PROTECT YOUR 401K NOW

You put your 401k funds into the hands of those who seem trust worthy. Whether it is greed or other financial need that results in their dereliction of duty, the abandonment of their obligations and responsibilities, you need to protect yourself and your plan s assets.

Here is what you should do now--

First:
Check with your plan administrator or record keeper to determine whether they are also holding your assets.

Second:
Request a SAS -70 or similar report of the procedural and financial controls on your 401k assets.

Third:
Require that all Plan information changes and plan distributions be authorized by a Plan Representative or Trustee.

Fourth:
Require an accounting of all disbursements from the plan and a report of all data changes of the plan on a quarterly basis.

Fifth- Last Resort:
Transfer your plan to an organization that can meet your financial and procedural control requirements.

By implementing the five actions now you can go back to sleeping peacefully again..

Want to see a complementary SAS 70 Report? Need a Procedural Control checklist? Contact Lawrence Groves at Lawrence@solo-k.com with your plan name and address . Visit The Solo 401k Center or The Women Entrepreneur

One Less Furrowed Brow for 401k Plan Sponsors

We got a sneak preview of the Dept of Labor's preliminary guidance on setting up 401k default investment options.

Under the guidance--which is subject to change--401k fiduciaries are now given a safe harbor on 401k investment management decisions and any breach that is "the direct and necessary result of investing a participant or beneficiary's account" in a default investment."

Investment managers and advisers, on the other hand, are solely responsible for any decisions they make with regard to the 401k investments or any resulting losses and do not get the same kind of relief.

In order to qualify for that 401k safe harbor, however, 401k fiduciaries must allow participants

1. the opportunity to move their investments into an alternate account
2. provide advance notice of the default investment and
3. invest the assets in a certain kind of qualified default investment.

Moreover, that default investment, which can be a lifecycle fund or a managed account, or other fund, must limit the presence of employer stock in the portfolio, as well as allow funds to be transferred.

The 401k fiduciary responsibility associated with selecting funds for the investment options in a 401k plan has now been tempered with this new preliminary safe harbor.

One less furrowed brow for plan sponsors.

Visit Solo 401k Solution or
Womens Solo 401k Center
Contact Lawrence at Lawrence@solo-k.com or call 727-277-4137