PLANADVISER - July/August 2020 - 5

its proposed rule seeking to restrict
the use of environmental, social and
governance (ESG)-themed investments
within tax qualified retirement plans
governed by the Employee Retirement
Income Security Act (ERISA). The senators
wrote, plan sponsors and fiduciaries
" should be able to consider whether
or not companies have established
diverse leadership teams, whether
they foster inclusive or discriminatory
workplaces, and whether they engage
in a variety of other practices that may
impact a company's performance.
" ESG-based investing is a key way
to grow a plan's assets in a manner
consistent with its corporate principles
without sacrificing investment
returns, " the letter states. " Racial
justice, corporate diversity and
other ESG factors are increasingly
a consideration in investment decisions.
Further, contrary to the skepticism
and assumptions underlying
the department's proposed rule, ESG
investments often outperform traditional
investments and the overall
financial markets, including over the
past
several
years,
showing
investors
can achieve strong returns while
driving positive change. "
 Fidelity to Pay $28.5mm
To Settle Lawsuit
Defendants in a suit accusing Fidelity
Investments and parent company FMR
LLC of self-dealing in the company's
own 401(k) plan have agreed to pay
$28.5 million to settle the case. The
defendants agree that, on a prospective
basis beginning no later than 30 days
after the effective date of the settlement,
one or more plan fiduciaries will
undertake monitoring plan recordkeeping
fees and the plan's investment
options, other than investments available
through the plan's self-directed
brokerage account. According to the
settlement agreement, it is entered
into " solely for the purpose of avoiding
possible future expenses, burdens
or distractions of litigation, " and all
defendants deny any wrongdoing.
The lawsuit accused plan fiduciaries
of using the plan as an opportunity
to promote Fidelity's mutual fund
business at the expense of the plan
and participants. According
to the
complaint, the defendants loaded the
plan exclusively with Fidelity-affiliated
investments, without
investigating
whether plan participants would have
been better
served by investments
managed by unaffiliated companies.
The suit alleges that the defendants
knew that their conduct was
unlawful because they had previously
settled a similar lawsuit.
 Man Accused of Fleecing
Boeing Retirement Plan
A federal grand jury has indicted an
Orange County, California, man on
charges that he fraudulently obtained
access to Boeing employees' retirement
accounts. The grand jury heard
sufficient evidence to charge Hao Vo
for the theft of hundreds of thousands
of dollars from Boeing employees'
accounts. According to the indictment,
from January 2019 to June 2019, Vo
obtained the personal identifying information
of various Boeing employees,
along with information about their
retirement accounts. He then allegedly
made fraudulent withdrawal requests
for checks and electronic money transfers
totaling hundreds of thousands of
dollars, the indictment claims.
Federal prosecutors say Vo knew
that notifications and checks related
to these fraudulent requests would
be mailed out, and so he placed holds
on the Boeing employees' mail with
the U.S. Postal Service. Once the mail
was held, Vo allegedly intercepted it
by presenting to a postal employee a
fraudulent California driver's license
with a Boeing employee's personal
identifying information, and a fraudulent
note purportedly written or signed
by the Boeing employee, authorizing
Vo to pick up the employee's mail.
The indictment states that Vo also
cashed checks written to himself from
the fraudulently opened bank account
by using the Boeing employee's forged
signature and endorsed the checks
himself. In total, Vo attempted to
obtain approximately $783,328 from
Boeing employees' retirement accounts
and actually obtained approximately
$360,847, the indictment alleges.
 $300mm Plan Faces
ERISA Fiduciary Breach Lawsuit
Plaintiffs have filed a new Employee
Retirement
Income
Security
Act
(ERISA) lawsuit in the U.S. District
Court for the Eastern District of Pennsylvania,
naming as defendants the
CDI Corp. and its board of directors,
among others. The claims echo those
detailed in the numerous ERISA challenges
raised in recent years, but this
litigation is distinguished by the relatively
small size of the plan in question.
Court documents show that,
as of December 31, 2018, the plan
had roughly $263 million in assets
entrusted to the care of its fiduciaries.
It is much smaller than the $1 billionplus
retirement plans that, historically,
have tended to be the focus of
ERISA litigation.
Beyond this fact, the lawsuit closely
resembles many others in its focus on
excessive fees and share-class issues.
The plaintiffs claim that, during the
proposed class period of July 7, 2014, to
the present, the fiduciary defendants
failed to objectively and adequately
review the plan's investment portfolio
with due care to ensure that
each investment option was prudent
in terms of cost and performance.
The complaint
further alleges
that
the plan inappropriately maintained
certain funds in the investment lineup
presented to participants, despite
the availability of identical or similar
investment options with lower costs
and/or better performance histories.
Additionally, the plaintiffs claim that
the defendants failed to select the
lowest-cost share class for many of the
funds in the plan.
 Relationship With Recordkeeper
May Have Caused Excessive Fees
A lawsuit has been filed against Koch
Industries, Koch Business Solutions
and the Koch Benefits Administrative
Committee alleging violations of their
Employee Retirement
Income Security
Act (ERISA) duties with respect
to certain Koch-affiliated defined
contribution (DC) plans. These include
the Georgia-Pacific Hourly Plan, the
Georgia-Pacific Savings Plan, the Koch
Plan and the Flint Hills Plan. -PA
planadviser.com July-August 2020 | 5
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PLANADVISER - July/August 2020

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