Transamerica/Aegon Sued

[scagnt83]

Trans/Aegon is being sued by their own employees for excessive fees and conflicts of interest in their 401k plan which uses Transamerica Retirement Services as Administrator & Recordkeeper. The Plan also uses 16 Aegon managed investment options.

This looks really really really bad for Aegon! The plan is paying triple the fees vs. the 90th percentile of similar plan's fees.... there is no way to justify that when the majority of those fees are going to the plan sponsor....

And the Aegon managed funds were just purchasing other Aegon managed funds with similar profiles. Basically they were layering fees on top of fees on top of fees for no reason.

Then to make it even worse they had subadvised investments where Aegon was charging much higher than the average to just choose the fund manager.

I hope they get raked over the coals on this one. They deserve it.

PLANADVISER.com - Aegon Sued Over Management of Its Retirement Plan

 

[moonlightandmargaritas]

Doesn't Obama have his panties in a wad over this kind of stuff?

 

[scagnt83]

Doesn't Obama have his panties in a wad over this kind of stuff?

Actually he does. Just last week he made some statements about the new definition and regs surrounding the Fiduciary Standard that is currently being pushed by the DOL.

 

[wln417]

Are you referring to this?

http://www.whitehouse.gov/sites/default/files/docs/cea_coi_report_final.pdf

 

[scagnt83]

Are you referring to this?

http://www.whitehouse.gov/sites/default/files/docs/cea_coi_report_final.pdf

Yep. They issued that report and he made a few comments on it in a press conference.

All of the data they cite as to why IRA holders are getting screwed compared to 401k holders does not take into account that IRA holders on average are older than 401k holders so they have more conservative and lower yielding investments. It also does not take into account the fact that a 401k plan can leverage a large pool of assets to get discounts in pricing. It also does not account for the differences in service models and the difference in hard vs. soft costs that they each have and how that effects investors of different wealth brackets.

In otherwords it takes a bunch of data that at its core is mostly true, and it perverts it into a generalized agenda focused policy which will have little effect on large investors but will severely limit access to advice for the small investor.

 

[VolAgent]

Yep. They issued that report and he made a few comments on it in a press conference.

All of the data they cite as to why IRA holders are getting screwed compared to 401k holders does not take into account that IRA holders on average are older than 401k holders so they have more conservative and lower yielding investments. It also does not take into account the fact that a 401k plan can leverage a large pool of assets to get discounts in pricing. It also does not account for the differences in service models and the difference in hard vs. soft costs that they each have and how that effects investors of different wealth brackets.

In otherwords it takes a bunch of data that at its core is mostly true, and it perverts it into a generalized agenda focused policy which will have little effect on large investors but will severely limit access to advice for the small investor.

And Aegon just played right into his hand. 160 bps versus an average of 30 bps for similar sized plans? That is a HUGE difference. And all they were doing was just inserting another asset manager to collect another fee?

How would you like to be calling on a company using TA/Aegon for their 401k.

"Well Bob, did you see this article about their own company 401k? It makes you wonder, would they treat you and your employees and better than they treat their own employees?"

 

[scagnt83]

And Aegon just played right into his hand. 160 bps versus an average of 30 bps for similar sized plans? That is a HUGE difference. And all they were doing was just inserting another asset manager to collect another fee?

How would you like to be calling on a company using TA/Aegon for their 401k.

"Well Bob, did you see this article about their own company 401k? It makes you wonder, would they treat you and your employees and better than they treat their own employees?"

Yeah it is so unethical its not even funny. You expect to occasionally find 1 of the 3 things they were doing... but all 3 in one single plan?? They are bending those employees over big time!

And yeah, Trans has a horrible 401k platform that is filled with proprietary funds from what I remember.