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Rating:DCIO: Retail Mutual Funds Burn Wal-Mart and Merrill Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, December 09, 2011

DCIO: Retail Mutual Funds Burn Wal-Mart and Merrill

News summary by MFWire's editors

Fundsters trying to sell retail mutual funds through giant 401(k) plans, beware. Bank of America Merrill Lynch and Wal-Mart have agreed to pay $13.5 million to end a lawsuit over fees in the Wal-Mart 401(k) plan, which were driven up thanks to the use of retail fund shares.

See our sister publication, The 401kWire, for more on the suit. CFO Daily News, Employee Benefit News, PlanAdviser and Reuters also covered the news.

Merrill, the recordkeeper for the $11.7-billion, 1.25-million participant Wal-Mart plan, will cover $10 million of the settlement. And up to $4 million of that money could go to the plaintiffs' attorneys on the case, led by Keller Rohrback.

The settlement could scare both 401(k) recordkeepers and plan sponsors away from using retail investments inside of larger plans, where separate accounts, collective trusts and institutional shares are available. 

Edited by: Neil Anderson, Managing Editor

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