USI Advisors, from Connecticut, has been fined by the U.S. Department of Labor for a failure to disclose fees it was paid for 13 pension plans that it monitors. The fine is for $1.27 million and the firm agreed to pay the fine related to the 13 plans that it oversaw from 2004 to 2010.
The firm is a subsidiary of USI Consulting Group and is required by Labor Department rules to disclose any fees it is paid. The disclosure must be submitted to the firm’s clients.
“If you, as an investment adviser, are a fiduciary under ERISA with respect to plan investments in mutual funds, 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. Borzi is the assistant secretary of labor for employee benefits security.
The Labor Department began requiring advisers to disclose to employer clients all of the fees that they receive in the early days of July. Then, as of August 30, advisers also had to begin disclosing those fees to the participants in those retirement plans. The Boston office of the Labor Department is the office that fined USI. The new rules from the Labor Department could help prevent firms from being fined in the future.