John Hancock Unveils K Plan Investment Warranty

October 3, 2005 ( - John Hancock Retirement Plan Services has unveiled a Fiduciary Standards Warranty - a promise that plan losses arising from its investment option selection and monitoring process will be restored and that John Hancock will pay any resulting litigation costs.

According to a John Hancock news release, the warranty provides K plan sponsors and participants with assurances that Hancock’s investment selection and monitoring process satisfies fiduciary standards established under the Employee Retirement Income Security Act (ERISA). The company said that the warranty is being offered at no extra cost to plan sponsors.

Under the warranty John Hancock promises that the investment alternatives:

  • have been selected and monitored by John Hancock using a process that satisfies the ERISA prudence requirements for investment selection
  • are appropriate for long-term investors such as 401(k) participants
  • offer a broad range of investment alternatives, as prescribed under ERISA

“We recognize that fund selection and monitoring is an important part of the due diligence process, and we are confident that our investment selection and monitoring process meets the highest fiduciary standards,” said Susan Bellingham, Senior Vice President for Marketing Development, Retirement Plan Services, in the news release. “We are committed to helping employers meet the highest fiduciary standards for selection and monitoring of the investments they offer their 401(k) participants.”

Plans that offer at least one investment option in designated asset classes and lifestyle portfolios covering five risk categories will automatically qualify for the new warranty, the company said.

The warranty applies to all the funds in the John Hancock lineup, not just those managed by John Hancock.

Efforts by plan sponsors to get some help on meeting fiduciary responsibilities represent a growing trend across the country (See  (k)Plans: Buyer Beware ).