Thrivent Financial, an American not-for-profit financial services organization, recently entered into a settlement agreement with the U.S. Department of Labor (DOL) over allegations that it breached its fiduciary duty to retirement plan participants.
The settlement, which was announced on September 28, 2021, requires Thrivent to pay $2.5 million to compensate for losses to the retirement plans of its participants. The DOL had alleged that Thrivent breached its fiduciary duty by failing to monitor and control the plan`s investment options and failing to ensure that participants paid reasonable fees for plan administration.
According to the DOL, Thrivent`s failure to monitor and control the investment options in the plan resulted in participants paying higher fees for underperforming investments. The DOL also alleged that Thrivent failed to ensure that the fees charged for plan administration were reasonable, thereby causing participants to pay excessive fees.
As part of the settlement, Thrivent has also agreed to undertake certain remedial actions, including reviewing and revising its investment policy statement and fee disclosures, conducting regular performance reviews of the plan`s investment options, and retaining an independent fiduciary to review the plan`s fees and expenses.
Thrivent has stated that it cooperated with the DOL during the investigation and is committed to addressing the issues raised in the settlement agreement. The organization has also stated that it remains committed to serving the best interests of its participants.
The settlement agreement highlights the importance of fiduciary duty in the management of retirement plans and the need for plan sponsors to monitor and control plan investments and fees. With the increasing focus on retirement plan fiduciary duty, plan sponsors should remain vigilant in ensuring that their plans are administered in the best interests of their participants.
In conclusion, the Thrivent Financial settlement agreement with the DOL underscores the need for fiduciary responsibility in managing retirement plans and the consequences of breaching this duty. Plan sponsors must be proactive in ensuring that their plans are well-managed and that the interests of their participants are protected.