Proposal To Protect Retirees’ Nest Eggs Becomes Latest Lobbying Flashpoint

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NEW YORK — Just before retiring from her job as a manager at Krispy Kreme in 2006, Jerri Young got a letter at her home in West Des Moines, Iowa, telling her to call Principal Financial about her 401k. When she called, assuming that she was talking to an account manager looking out for her best interests, she was convinced to roll over almost $70,000 into a Principal IRA with a class of mutual funds.

Unbeknownst to her, Young was actually talking to a sales agent at a subsidiary of Principal. She felt deceived and sued Principal along with other plan participants, alleging that the company “failed to act solely in the interests of the participants and their plans and instead engaged in blatant and massive self-dealing.”

Essentially, the case asked a simple question: Is it too much to ask of professionals who give investment advice to retirement plan participants to have the best interests of those retirees in mind?

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fluidideas@gmail.com

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