I love Clint Eastwood movies and one favorite is “In The Line of Fire’. John Malkovich is playing a wannabe Presidential assassin named Leary and Clint is playing Frank Horrigan, the Secret Service agent who is trying to catch him. For me, my favorite scene is when Clint and John Malkovich are on the phone and John calls Clint’s character a friend.
Frank Horrigan: I know who you are – Leary.
Mitch Leary: I’m glad, Frank. Friends should be able to call each other by name.
Frank Horrigan: We’re not friends.
Mitch Leary: Sure we are.
Frank Horrigan: I’ve seen what you do to friends.
Mitch Leary: What’s that supposed to mean?
Frank Horrigan: You slit your friend’s throat.
While not the same thing is slitting a friend’s throat, it is amazing to me how large 401(k) providers handle the 401(k) plans of their employees. I can attest that as someone who worked for a third party administrator once, I can tell you that our 401(k) plan wasn’t very good. It’s kind of like the old adage about the cobbler’s children having no shoes.
Mass Mutual just settled a class action lawsuit on their own 401(k) plan. Mass Mutual is forking over $30.9 million as well. In addition to the payment, MassMutual also agreed to keep the plan’s annual record-keeping fees no higher than $35 per participant for the next four years. The agreement includes a four-year ban on calculating record-keeping fees as a percentage of plan assets.
If Mass Mutual overcharges their own employees, does that mean they do it for their “real” clients? That’s not for me to say, that’s for an independent review to find out.