Articles Posted in 401k Plans

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Securities attorneys are currently investigating claims on behalf of the customers of Christopher B. Birli and Patrick W. Chapin, who suffered significant losses as a result of misrepresentations and unsuitable recommendations of variable annuities. Reportedly, Birli and Chapin received significant sales commissions for allegedly unsuitable recommendations to their customers.

Customers Could Recover Losses for Unsuitable MetLife Variable Annuity Recommendations

On March 27, a complaint was filed with the Financial Industry Regulatory Authority Office of Hearing Officers against Birli and Chapin regarding the State University of New York retirement program. According to the complaint, Birli and Chapin recommended their customers switch MetLife variable Annuities with new ones held outside the retirement plan in MetLife IRA accounts.

Allegedly, Birli and Chapin circumvented their firm’s general prohibition of direct annuities exchange by recommending to their customers that they surrender their annuities to purchase another product available within the retirement program, wait 90 days, and then sell the second product in order to purchase the MetLife IRA annuity.

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Recently, Matthew D. Hutcheson, a financial advisor and radio personality, reportedly was indicted on federal charges. Investment fraud lawyers say Hutcheson, who is well known in the securities industry, has been indicted for funding his home renovations and purchasing interest in a golf and ski resort with his clients’ retirement plan funds. Hutcheson authored the “Retirement Plan Management: Compliance, Reporting and Ethics” course and hosted “The Retirement Hour with Matt Hutcheson” radio show.

“Retirement Plan Management: Compliance, Reporting and Ethics” Author Charged with Fraud

Hutcheson was a trustee and fiduciary to three multiple employer plans, according to the Boise U.S. Attorney’s Office. These plans were the National Retirement Security Plan 401(k), the Retirement Security Plan & Trust and the G Fiduciary Retirement Income Security Plan. According to the allegations against Hutcheson, he directed the G Fiduciary Plan’s record keeper to send $2,031,688 from the plan’s account via 12 wire transfers in 2010. The plan’s account was kept at Charles Schwab & Co. Inc., and the accounts that received the funds were for Hutcheson’s personal benefit or under his control.

Furthermore, in 2010 Green Valley Holdings was set up by Hutcheson, an entity that was used to acquire a ski lodge and golf course at Idaho’s Tamarack Resort. According to the complaint, he also allegedly funneled plan assets from Retirement Security Plan & Trust to help purchase an interest in the resort, amounting to $3 million.

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One of the largest concerns of every American, at some point in their lives, is how they will be able to make ends meet when they retire. Why is it, then, that almost 30 percent of Americans aren’t contributing enough to their 401(k) to get their full employer match? FINRA’s new Investor Alert, “Why Leave Money on the Table — Make the Most of Your Employer’s 401(k) Match” deals with this question and encourages greater 401(k) contributions by those not taking full advantage of this match.

FINRA Investor Alert: Taking Advantage of 401(k) Matching

Part of the problem could be age, and the fact that many young employees aren’t yet looking at their retirement seriously. According to a recent study, 43 percent of young workers age 20-29 don’t put enough money into their 401(k) to get their employers’ full match. According to FINRA’s press release on the Investor Alert, “Millions of workers, especially younger and lower-income workers who need it most, are leaving money — free money — on the table.”

Another factor lowering employee 401(k) contribution may be the state of the economy. With less money to go around, it’s often hard to put away for the future. However, hard economic times should be incentive to put away more to protect your retirement. According to FINRA Vice President of Investor Education Gerri Walsh, “Even in tough economic times, all employees still need to prepare for their retirement. Taking full advantage of a company’s 401(k) match is a no-cost way for workers to boost their retirement savings.”

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