PLANADVISER - March/April 2020 - 7

In an October ruling, the District
Court granted the defendants' motion
seeking to discredit certain expert
testimony generated by the plaintiffs.
At the same time, the ruling denied
the plaintiffs' motion to reject the
expert reporting of two pro-defense
witnesses.
As part of the settlement, SunTrust
will establish a $29 million settlement
account that will be distributed to
the class and will be used to pay the
attorneys' fees of nearly $10 million.
The agreement also states that the
defense continues to deny all of the
allegations made in the lawsuit.
 Settlement in Invesco
Self-Dealing Suit
Parties in a lawsuit accusing Invesco
401(k) plan fiduciaries of loading the
plan with proprietary investments
have agreed to settle for $3.47 million.
Besides the monetary settlement,
the defendants agreed to modify the
investment options offered through
the plan's self-directed brokerage
account (SDBA) so participants will be
permitted to invest in nonproprietary
exchange-traded funds (ETFs) along
with the proprietary ETFs offered to
participants.
The agreement says it is being
entered into for settlement purposes
only and " solely for the purpose of
avoiding possible future expenses,
burdens or distractions of litigation. "
It further states that the defendants
" specifically and expressly deny any
and all liability in connection with
any claims [that] have been made. "
In the underlying lawsuit, the
Invesco plan was accused of offering
too many investment options-nearly
all of them affiliated in some way
with Invesco-and of failing to use its
leverage as one of the larger employersponsored
retirement programs in the
U.S. to negotiate for reduced costs for
the benefit of plan participants.
 SEC Permits Annuity
Disclosure Summaries
The Securities and Exchange Commission
(SEC) announced it has adopted
a new rule and related regulatory
amendments to simplify and streamline,
for investors, disclosures about
variable annuities and variable life
insurance contracts.
SEC Chairman Jay Clayton says the
changes permit the use of " a concise,
reader-friendly prospectus designed
to improve investors' understanding
of the contracts' features, fees and
risks. "
He says the new framework's use
of " layered disclosure and technology "
will provide investors with a road
map so they can more easily access
the information they need to make an
pants for the purpose of cross-selling
proprietary non-plan products and
services unless the participant has
asked for or needs one of those products
or services.
In addition, the settlement agreement
states that any new recordkeeping
contract that the defendant enters into
either with the existing recordkeeper or
a new recordkeeper during the threeyear
period must include a provision
similarly restricting it from crossselling
proprietary non-plan products
and services to the plan's participants.
... the changes permit the use
of " a concise, reader-friendly
prospectus designed to improve
investors' understanding of the
contracts' features, fees and risks. "
informed investment decision. Under
this framework, detailed information
about a variable annuity or variable
life insurance contract must still be
made available online, and an investor
may choose to have that information
delivered on paper or in an electronic
format at no charge.
 Parties Settle in Oracle
ERISA Lawsuit
An agreement has been reached in
the lawsuit alleging that fiduciaries
of Oracle Corp.'s 401(k) plan mismanaged
the plan, thereby breaching their
duties under the Employee Retirement
Income Security Act (ERISA).
Under the agreement, the defendants,
or an entity acting on their
behalf, will deposit $12 million in an
interest-bearing settlement account.
In addition to the monetary component
of the settlement, the defendants
agreed that, for a period of three years,
they will instruct the plan's recordkeeper,
in writing, that in performing
previously agreed upon recordkeeping
services with respect to the plan, it
must not solicit current plan partici
Salesforce Faces Fee Litigation
Like so many other large U.S. employers,
Salesforce is accused of failing to take
advantage of the lowest-cost share class
available for many of the mutual funds
offered in its retirement plan investment
lineup.
The defendants are further accused
of failing to consider the use of collective
investment trusts (CITs), comingled
accounts or separate accounts as
alternatives to mutual fund offerings,
despite potentially lower fees.
Notably, case documents show
Salesforce has actually changed some
of the practices that are criticized in
the complaint. But the plaintiffs argue
that these changes were made too late
and that the plan fiduciaries should be
held financially liable for not making
these " prudent " decisions earlier.
The complaint was filed in the U.S.
District Court for the Northern District
of California and seeks class action
status on behalf of a sizable group of
retirement plan participants and beneficiaries.
Named as defendants are Salesforce
itself, its board of directors and its
investment advisory committee. -PA
planadviser.com March-April 2020 | 7
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PLANADVISER - March/April 2020

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