USI Advisors Inc., Glastonbury, Conn., will pay $1.3 million to 13 defined benefit pension plans to settle charges brought by the EBSA over improper fee disclosure, the agency announced Thursday.
The Employee Benefits Security Administration claimed that between 2004 and 2010, USI Advisors, which made investments in mutual funds on behalf of the 13 pension funds, received 12b-1 fees but failed to fully disclose them or credit the amounts to the pension funds.
Under the terms of the settlement, USI Advisors agreed not to provide bundled investment advisory and actuarial services to any ERISA-covered defined benefit plan client without first entering into a written agreement specifying the services provided and all compensation and fees received from any investment or transaction related to them.
“You cannot use your fiduciary authority to receive an additional fee or to receive compensation from third parties for your own personal account in transactions involving plan assets,” said Phyllis C. Borzi, assistant secretary of labor for the EBSA, in a statement. New fee disclosure regulations “will require fiduciaries like USI to be more transparent about the fees they receive when dealing with their plan clients.”
Calls to USI Advisors, a subsidiary of USI Consulting Group and a Goldman Sachs Capital Partners, were not returned.
