PLANSPONSOR - October/November 2018 - 11

was vacated by the 5th U.S. Circuit Court
of Appeals. The agency said it is considering
regulatory options in light of the 5th
Circuit opinion and has on its timeline that
a final rule will be issued next September.
TPA Owners Indicted for
Retirement Plan Theft
A federal grand jury indicted a Red
Oak, Texas, couple, Wendy and Jeffrey
Richie, who allegedly embezzled $14.5
million from retirement plans they
managed, announced a U.S. attorney
for the Northern District of Texas. The
couple are co-owners of Vantage Benefits
Administrators and were charged with
conspiracy, theft from an employee
benefit plan, wire fraud and aggravated
identify theft. According to the indictment,
Vantage served as third-party
administrator (TPA) for dozens of retirement
funds, including several 401(k)
plans. With her husband's knowledge,
Ms. Richie-posing as various beneficiaries-allegedly
submitted fraudulent
distribution requests to the retirement
fund custodian, Matrix Trust Co. Instead
of depositing the money into beneficiaries'
accounts, however, she transferred
it into Vantage's operating account. The
couple allegedly used those funds to
pay Vantage payroll and other operating
expenses, as well as personal expenses
such as mortgage and escrow payments,
farming equipment and home décor.
PBGC Asks That More
Information Be Added to
Reportable Event Filings
The Pension Benefit Guaranty
Corporation (PBGC) has asked the Office
of Management and Budget (OMB) to
extend approval for collection of information
under PBGC's regulation Reportable
Events and Certain Other Notification
Requirements, with modifications. PBGC
proposes in this renewal request that all
reportable event filings include controlled
group information, company financial
statements and the plan's actuarial valuation
report. Currently, there are five
reportable events where some or all of
that information is not required.
Protecting ESOPs
A group of legislators is calling out the
Department of Labor (DOL) for engaging
in enforcement activities against
employee stock ownership plans (ESOPs)
without providing meaningful guidance.
Twenty-seven members of Congress
sent a letter to President Donald Trump,
saying the DOL " has released very
little guidance on substantive issues
including, for example, valuation. " The
letter was also sent to Secretary of Labor
Alexander Acosta, Assistant Secretary of
Labor Preston Rutledge and Solicitor of
Labor Kate O'Scannlain.
Court Pares Down
401(k) Self-Dealing Suit
A federal judge has pulled apart a lawsuit
against Neuberger Berman and other
defendants that alleged they violated the
Employee Retirement Income Security
Act (ERISA) by maintaining the Value
Equity Fund. This fund, it says, " was
larded with high fees and has suffered
from consistently abysmal performance "
in Neuberger Berman's 401(k) plan. A
U.S. district judge of the U.S. District
Court for the Southern District of New
York left only the plan's investment
committee as a defendant and moved
forward only the prohibited transaction
claim, dismissing all other defendants
from the suit and dismissing the breach
of fiduciary duty claims.
Washington University
403(b) Lawsuit Dismissed
The U.S. District Court for the Eastern
District of Missouri has ruled against
plaintiffs in a consolidated 403(b) lawsuit
alleging a variety of breaches of the
Employee Retirement Income Security
Act (ERISA). The case was initially filed
a year ago June and names as defendant
Washington University in St. Louis,
alleging multiple violations of ERISA
over the school's selection and monitoring
of its 403(b) plan investments,
selection and monitoring of plan recordkeepers
and the plan's loan program. Of
note, this lawsuit was consolidated with
a second complaint similarly alleging
that plan officials " utterly abdicated their
fiduciary duties to act prudently and
loyally " by turning the plan over to TIAA
and Vanguard Group. The decision indicates
that the CREF Stock Account and
CREF Money Market Account were not,
as plaintiffs allege, " locked in to the
plan " and could in fact be removed due
to performance concerns. " Rather, these
two options were merely bundled with
the TIAA Traditional Annuity, and that
bundle could be removed, " the decision
says. " The court holds that bundling
services or revenue sharing are common
and acceptable investment industry practices
that frequently inure to the benefit
of ERISA plans. "
Sponsors Must Submit
IRS Voluntary Correction
Program Docs Digitally
According to IRS Revenue Procedure
2018-52, in general, beginning April 1,
2019, plan sponsors must use the www
.pay.gov website when filing a Voluntary
Correction Program (VCP) submission
and paying applicable user fees. Procedure
2018-52 modifies and supersedes Revenue
Procedures 2016-51 and 2016-42, the
most recent prior consolidated statements
under the Employee Plans Compliance
Resolution System (EPCRS). According to
the IRS, this update to the 2016-51 publication
is " a limited update and is published
primarily to set forth the new VCP submission
procedures. " -PS
For in-depth coverage of these topics and more, go to plansponsor.com/compliance.
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PLANSPONSOR - October/November 2018

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