{"id":4551,"date":"2020-03-02T08:00:53","date_gmt":"2020-03-02T13:00:53","guid":{"rendered":"http:\/\/therosenbaumlawfirm.com\/blog\/?p=4551"},"modified":"2020-03-02T08:00:53","modified_gmt":"2020-03-02T13:00:53","slug":"fidelity-fends-off-one-fundsnetwork-claim","status":"publish","type":"post","link":"https:\/\/therosenbaumlawfirm.com\/blog\/?p=4551","title":{"rendered":"Fidelity fends off one FundsNetwork claim"},"content":{"rendered":"<p><span class=\"s2\">Fidelity has been under fire for its FundsNetwork 401(k) offering. The FundsNetwork is where various mutual funds, affiliates of mutual funds, mutual fund advisors, sub-advisors, investment funds, including collective trusts, and other investment advisors, instruments or vehicles that are offered to the plans through Fidelity\u2019s FundsNetwork pay Fidelity to be a part of the fund lineup.<\/span><\/p>\n<p><span class=\"s2\">A class-action lawsuit by a participant of T-Mobile\u2019s 401(k) plan claimed the payments were \u201csecret payments to Fidelity for its own benefit in the guise of \u2018infrastructure\u2019 payments or so-called relationship-level fees\u201d in violation of ERISA\u2019s prohibited transaction rules.\u201d Fidelity isn\u2019t the only bundled provider with this type of fund lineup where fund companies make payments to be a part of the network.<\/span><\/p>\n<p><span class=\"s2\">The case was thrown out because Fidelity wasn\u2019t a fiduciary and there was no proof that these \u201cshelf-space payments\u201d increase participants\u2019 costs. Shelf space payments aren\u2019t OK with me, but it is a giant loophole through the fee disclosure rules because there is no nexus between these payments and costs charged directly or indirectly by any plan provider to the plan. <\/span><\/p>\n<p><span class=\"s2\">Shelf-space payments will continue to exist as long as the Department of Labor doesn\u2019t close the loophole that allows it.<\/span><\/p>\n<p><span class='st_sharethis' st_title='{title}' st_url='{url}' displayText='ShareThis'><\/span><\/p>","protected":false},"excerpt":{"rendered":"<p>Fidelity has been under fire for its FundsNetwork 401(k) offering. The FundsNetwork is where various mutual funds, affiliates of mutual funds, mutual fund advisors, sub-advisors, investment funds, including collective trusts, and other investment advisors, instruments or vehicles that are offered &hellip; <a href=\"https:\/\/therosenbaumlawfirm.com\/blog\/?p=4551\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n<p><span class='st_sharethis' st_title='{title}' st_url='{url}' displayText='ShareThis'><\/span><\/p>","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/therosenbaumlawfirm.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/4551"}],"collection":[{"href":"https:\/\/therosenbaumlawfirm.com\/blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/therosenbaumlawfirm.com\/blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/therosenbaumlawfirm.com\/blog\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/therosenbaumlawfirm.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4551"}],"version-history":[{"count":1,"href":"https:\/\/therosenbaumlawfirm.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/4551\/revisions"}],"predecessor-version":[{"id":4552,"href":"https:\/\/therosenbaumlawfirm.com\/blog\/index.php?rest_route=\/wp\/v2\/posts\/4551\/revisions\/4552"}],"wp:attachment":[{"href":"https:\/\/therosenbaumlawfirm.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4551"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/therosenbaumlawfirm.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4551"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/therosenbaumlawfirm.com\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4551"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}