WACHOVIA BUYS AMERIPRISE RECORD-KEEPING UNIT: Banking group Wachovia Corp. will acquire the defined-contribution record-keeping business of Ameriprise Financial Inc. Terms of the deal, which is subject to federal approval, were not disclosed.The Ameriprise unit provided record-keeping and plan administration services to 225 defined-contribution retirement plans at the end of March - covering nearly 700,000 participants and administering about $28 billion in assets.
Ameriprise said that the sale was part of its strategy to focus on personal financial advisory, asset accumulation, income and protection services. The company will continue to provide investment management products and services, workplace financial education, and IRA rollover services to defined-contribution plans and retirement plan clients. Ameriprise's Financial Education and Planning Services will continue to provide workplace financial education to its more than 600 corporate clients, some of which are record-keeping clients.
Wachovia already operates on the same core record-keeping platform as Ameriprise, and has operations close to the existing Bloomington, Minn.-based unit. Charlotte, N.C.-based Wachovia, the No. 4 bank in the U.S., will merge the unit into its Wachovia Retirement Services. Wachovia has added some retirement services businesses from Bank of New York Co. and PNC Financial Services Group Inc. in recent years.
IRS UPDATES CORRECTION PROGRAM FOR RETIREMENT PLANNERS: The Internal Revenue Service has issued an updated and expanded revision of a revenue procedure governing its popular voluntary correction program for employee retirement plans - the Employee Plans Compliance Resolution System. Under the system, plan sponsors and other plan professionals can correct certain errors in employee retirement plans, in some cases without having to notify the IRS. Correcting plans in this way allows participants to continue receiving tax-favored retirement benefits, and protects the benefits of employees and retirees.
"We know that employers and plan administrators want to comply with the tax laws and regulations. But the law is constantly changing and has become fairly complex, so even tax professionals can sometimes make mistakes in this area," said Carol Gold, director of the IRS's Employee Plans Division, in a statement. She said that the two major issues causing problems were bad loans and the exclusion of some employees, particularly in 401(k) plans.
EPCRS includes three levels of correction programs.
"We think the changes to EPCRS will further encourage employers and plan sponsors to voluntarily correct problems associated with their plans," said Joyce Kahn, who directs the IRS's voluntary compliance program for employee retirement plans. "EPCRS is a popular program, and it has greatly helped many plan participants retain tax-favored retirement benefits."
The full details of the plan are available at www.irs.gov.
MORGAN STANLEY PAYS $15M FOR POOR E-MAIL RETENTION: Morgan Stanley & Co. will pay $15 million to settle a civil lawsuit from the Securities and Exchange Commission for failing to produce tens of thousands of e-mails that it requested as part of a probe.
In response to the suit, which was brought and settled on the same day, Morgan Stanley neither admitted nor denied the SEC's charges that the company failed to provide records and documents in a timely manner, as required by securities laws.
The SEC said that $5 million of the fine would go to the New York Stock Exchange and the NASD to settle separate, but related, proceedings.
According to the SEC, Morgan Stanley didn't diligently search for back-up tapes containing e-mails until 2005, and then couldn't produce some e-mails because the company had overwritten back-up tapes. In addition, the SEC said that Morgan Stanley made numerous misstatements about its e-mail retention. The SEC said that two of its investigations into conflicts of interest among Wall Street analysts were compromised by Morgan Stanley's actions.
As part of the settlement, Morgan Stanley will adopt and implement policies, procedures and training focused on the preservation and production of e-mail communications. The company will also hire an independent consultant to review the reforms.
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