Corporate Retirement Plans Advised to Monitor, Investigate, and Consider Suing Over Mutual Fund Trading Improprieties

Ann Combs, assistant secretary to the Employee Benefits Security Administration, an agency in the Labor Department, recently announced what is expected of corporate retirement plans in connection with the investigations of various mutual fund firms.

First, Combs urged companies to monitor how their plans may be affected. Second, Combs suggested that companies that manage or advise 401(k) plans should contact the mutual fund firms to determine what if any impact the trading improprieties will have on their plans.

Third, Combs said, "Fiduciaries may also ultimately have to decide whether and how to participate in lawsuits or settlements arising from the improper mutual fund activities." 401(k) managers may face liability if investors suffer as a result of the mutual funds selected for their plans.

Source: Wall Street Journal, October 21, 2003