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COLLECTED WISDOM™ on Court and Legal Actions Related to Retirement Plans

A directory and index of articles that review what is happening in the courts and legal system.

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Another Employer Targeted With Forfeiture Fiduciary Breach, With a New Twist

Another national employer's 401k plan has been sued for a fiduciary breach in its use of plan forfeitures to reduce employer contributions with the plaintiff represented by a law firm new to this arena. The plan is the Wells Fargo & Company 401k Plan.

Source: Napa-net.org, June 2024

DOL Fiduciary Rule Challenge Gains More Support

The Hispanic Leadership Fund has filed an amicus brief in support of a suit brought by the Federation of Americans for Consumer Choice and others that "seeks to grant the motion to stay the Rule's effective date and to issue a preliminary injunction." It follows another amicus brief filed last week by the U.S. Chamber of Commerce in support of the legal challenge.

Source: Napa-net.org, June 2024

Participant-Plaintiffs Shift Argument, Outcome in TIAA Rollover Suit

A suit that challenged a program designed to "drive members from their ERISA plans and into TIAA-sponsored offerings, with little upside to those participants," has moved past a motion to dismiss. The suit, filed in September 2022 by plaintiffs against Teachers Insurance Annuity Association of America (TIAA) and TIAA-CREF, had asserted "...a variety of claims under the Employee Retirement Income Security Act of 1974."

Source: Napa-net.org, June 2024

District Court Denies Motion to Dismiss Forfeiture Complaint

The United States District Court for the Southern District of California found that the Plaintiff had made a plausible complaint for a violation of ERISA § 404(a)(1). In particular, the Court described the exact nature of the harm alleged by Plaintiff as well as its basis for concluding that Plaintiff's claim of disloyalty was plausible.

Source: Wagnerlawgroup.com, June 2024

TIAA Retirement Suit Foreshadows Future 401k Rule Litigation

A New York federal district court ruling tying TIAA to the alleged misconduct of its clients offers a rare glimpse at the upturned legal landscape awaiting pension servicers when a new 401k advice rule takes effect.

Source: Wagnerlawgroup.com, June 2024

Use of 401k Plan Forfeitures Continues to be Scrutinized in Litigation

Forfeitures typically occur when an employee leaves a company before fully vesting in the 401k plan, thus leaving the employer with excess contributions. In a handful of recent lawsuits, plan sponsors have been questioned about their use of forfeitures assets to reduce employer contributions in 401k plans.

Source: Plansponsor.com, June 2024

Lawsuit Against TIAA Over Managed Account Service Moves Forward

TIAA's request to dismiss an amended lawsuit filed against it regarding a managed account service for participants was denied by a federal district judge in New York, with an order for the firm to provide an answer by June 21. The plaintiffs alleged that TIAA breached its fiduciary duties to participants under ERISA for allegedly cross-selling the firm's adviser-managed account service known as Portfolio Advisor, which comes at a higher cost than remaining in the plan.

Source: Planadviser.com, June 2024

401k Lawsuits Over "Forfeited" Money Get a Lifeline

A new type of 401k lawsuit recently survived its first big challenge. Since one law firm began filing plan forfeiture cases last year, observers said they did not expect them to go very far. However, there are reportedly at least nine such lawsuits now pending, and the recent development in the Qualcomm case represents a tailwind for the plaintiffs.

Source: Investmentnews.com, June 2024

Bechtel Faces 401k Suit Over Default Managed Accounts

Engineering and construction firm Bechtel, its board, and its trust and thrift plan committee have been sued for allegedly defaulting plan participants into managed accounts that were not justified for the fees. The plaintiffs are seeking payment including "all profits which participants would have made if the defendants had fulfilled their fiduciary obligations."

Source: Planadviser.com, June 2024

TDF Fiduciary Hygiene: An Appropriate IPS, Customized Benchmarks, and Thorough Committee Minutes

On May 20, 2024, the United States District Court for the Northern District of California dismissed the plaintiffs' complaint in Bracalente v. Cisco Systems, Inc., holding that defendant Cisco did not violate ERISA's prudence requirement in selecting (and retaining) a suite of BlackRock target-date funds as the Cisco 401k plan's qualified default investment alternative. This article reviews the court's decision, highlighting three issues of practical significance for sponsor fiduciaries.

Source: Octoberthree.com, June 2024

Recent Developments in 401k Forfeiture Cases: Key Updates for Plan Sponsors

This article reviews two significant developments in the arena of 401k forfeiture cases that could have far-reaching implications for employers and plan sponsors. These recent legal decisions underscore the need for vigilance and proactive management of plan documents and forfeiture practices.

Source: Boutwellfay.com, June 2024

Bugielski v. AT&T Services, Inc.: Another Key Case Toward Defining the Future of 401k Litigation

SCOTUS may soon have yet another ERISA-related case to review. AT&T Services, Inc. recently petitioned SCOTUS for a writ of certiorari to review the Ninth Circuit's decision in Bugielski v. AT&T Services, Inc. AT&T presented the question for the Court as follows: Whether a fiduciary to an employee benefit plan causes the plan to engage in a prohibited transaction under Section 406(a)(1)(C) of ERISA by entering into a routine, arm's-length agreement for plan services.

Source: Fiduciaryinvestsense.com, May 2024

Nine Insurance Trade Groups File Suit Against DOL's New Fiduciary Proposal

The DOL went into the Memorial Day weekend with a fresh lawsuit seeking to undo its Retirement Security Rule filed by nine insurance trade associations. The associations filed the suit in the U.S. District Court for the Northern District of Texas, which is within the jurisdiction of the Fifth Circuit Court of Appeals. The associations cited the Fifth Circuit in the complaint because several years ago the court overturned a prior rule DOL intended to change the definition of what it means to give fiduciary advice for retirement investments.

Source: Planadviser.com, May 2024

South Carolina 401k Plan Smacked With Excessive Fee Suit

Another multi-billion-dollar 401k plan has been sued for what are allegedly excessive fees by a firm not previously noted in this genre. The suit alleges that, rather than acting for the exclusive benefit of the Sonoco Plan and its participants and beneficiaries, the defendants "allowed the Sonoco Plan's recordkeeper to receive excessive compensation for the services it provided."

Source: Napa-net.org, May 2024

Humana Prevails in Excessive Fee Suit

Evidence of a prudent process -- and a lack of valid comparator plans -- produced a win in federal court for the fiduciary defendants of a $6.5 billion plan in an excessive fee suit. The suit was filed four years ago. The claims were pretty vanilla for the genre, alleging that the plan fiduciaries breached the duties they owed to the plan, to plaintiffs, and the other participants of the plan.

Source: Napa-net.org, May 2024

Packaging Co. Hit With Excessive Fee Suit on $1.2B 401k

A South Carolina-based product packaging company's board and benefits committee is the latest to be hit with a lawsuit alleging excessive participant fees in its 401k plan. The complaint brought in the US District Court for the District of South Carolina Florence Division alleges a breach of fiduciary duty under ERISA for allowing for excessive fees in the $1.2 billion 401k plan, which was record kept by Empower.

Source: Planadviser.com, May 2024

Plaintiffs File Lawsuit Challenging DOL's Amendment of ERISA's Advice Fiduciary Rule

On May 2, 2024, a group of plaintiffs filed a complaint against the DOL challenging the validity of DOL's recently finalized amendment to the ERISA advice fiduciary regulation. This article highlights key claims plaintiffs are making in this case: that DOL's imposition of the general ERISA fiduciary obligations of prudence and loyalty on IRA advisers and its refusal to provide a carve-out for brokers as mere salespersons cannot be supported by the statute and that the 2024 amendment to the rule must be vacated.

Source: Octoberthree.com, May 2024

401k Forfeiture Fiduciary Breach Suit Sent to Arbitration

Roughly a half-dozen fiduciary breach suits have been filed against national employers alleging a breach of their fiduciary duties in how they applied forfeitures, one has now been sent to arbitration. Having filed both a motion to compel arbitration -- and to dismiss the action -- the Tetra Tech defendants point to an arbitration provision in the plan document that they claim precludes litigation without first having gone to arbitration.

Source: Napa-net.org, May 2024

Dismissal Expected Soon in Multiple 401k Forfeiture Proposed Class Action Lawsuits

At least nine pending proposed class action lawsuits challenging how companies use 401k forfeitures are facing rulings on motions to dismiss in the coming weeks. The pending cases include those involving large companies such as Mattel, Honeywell, Clorox, Intuit, and HP. In every case, benefits litigators are closely watching the outcomes of these and similar cases for trends and opportunities for future litigation.

Source: Hallbenefitslaw.com, May 2024

California District Court Dismisses Conclusory ERISA Fee Complaint Unsupported by Facts

In the past few years, hundreds of employers have been hit with proposed class actions challenging their "excessive" retirement plan fees. Plaintiffs have had mixed results in court. Recently a California federal court granted an employer win in an ERISA excessive fee case when it dismissed a proposed class action brought by an ex-employee of Schenker, Inc., a transportation logistics company.

Source: Erisalitigationadvisor.com, May 2024

Defense Contractor L3Harris to Pay $650k to Settle 401k Class Action

Aerospace and defense technology company L3Harris has agreed to settle an ERISA class action lawsuit for $650,000. Plan participants in the company's $5.2 million 401k plan claimed that the defense contractor violated ERISA by charging excessive fees and retaining expensive investment options. The settlement resolves the lawsuit before the court could rule on a pending motion for summary judgment.

Source: Hallbenefitslaw.com, May 2024

Who Owns Plan Forfeitures? New Cases Challenge IRS Guidance

Several lawsuits have been filed recently challenging 401k plan sponsors' use of forfeitures to reduce employer contributions. Is this a new phase in ERISA litigation or a wrong turn by plaintiffs' counsel? While it is always risky to predict how courts will rule on issues, motions to dismiss filed by defendants Clorox and Fisher Scientific target the holes in plaintiffs' cases. Further, it is not clear that participants would benefit even if plaintiffs were to prevail. Here are some of the reasons why using forfeitures to reduce employer contributions should not be restricted.

Source: Cohenbuckmann.com, May 2024

J.P. Morgan Sued for Data Exposure

A participant in a retirement plan managed by J.P. Morgan Chase & Co. has initiated legal action against the company following recent reports of a data breach where over 451,000 plan participants' details were exposed. According to the lawsuit filed in the U.S. District Court for the Southern District of New York on May 3, former Long Island Railroad employee Benjamin Valentine's personal information -- which he entrusted with J.P. Morgan on the mutual understanding that the firm would protect it against disclosure -- was "targeted, compromised and unlawfully accessed due to the data breach."

Source: Planadviser.com, May 2024

401k Advice Rule Puts New Fiduciaries in Litigation Crosshairs

A newly finalized rule from the DOL is poised to spur a new crop of suits under federal employee benefits law over alleged fiduciary breaches by defendants who previously weren't held to the strictest standard of care in handling retirement savers' funds. Lawsuits focusing on the extent to which an insurance agent, broker-dealer, or another party becomes a fiduciary by giving investment advice for a fee, a matter that hasn't been litigated frequently in federal courts, could emerge from the new fiduciary standard, according to benefits lawyers.

Source: Wagnerlawgroup.com, May 2024

Fifth Circuit Reverses Dismissal of 401k Fees Claims

The Fifth Circuit recently reversed a district court's dismissal of claims that the fiduciaries of a 401k plan breached the duty of prudence under ERISA by offering participants retail share classes instead of cheaper institutional share classes and causing the plan to pay allegedly excessive recordkeeping fees. The decision is notable for articulating the level of detail that may be sufficient in the Fifth Circuit for these kinds of claims to survive a motion to dismiss.

Source: Proskauer.com, May 2024

Settlements Struck in Several Excessive Fee Suits

The settlements are lining up in several so-called excessive fee suits -- including one at the 11th hour -- all with plaintiffs represented by Capozzi Adler PC. A considerable amount of time and energy has been spent in legal proceedings and the terms of any of these settlements are not yet known.

Source: Napa-net.org, May 2024

2024 DOL ERISA Investigation Update: Recent Publications Offer Insight Into Possible Areas of Focus

The DOL maintains a robust investigatory program for auditing employee benefit plans for potential ERISA violations. ERISA plan fiduciaries and service providers can expect the DOL to continue its ever-evolving enforcement program targeting both fiduciaries and nonfiduciary service providers. Recent reporting by the DOL provides insight into its current official and unofficial enforcement priorities and may help plan fiduciaries and in-house counsel seeking to track the DOL's enforcement activities.

Source: Morganlewis.com, May 2024

First Challenge of the DOL Investment Advice Fiduciary Final Rule

The fiduciary rule regulations are already being challenged by an advocacy group for independent insurance professionals claiming that the final rule creates heavy compliance burdens and hurts their ability to make commissions by unlawfully turning insurance agents into ERISA fiduciaries. The DOL responded to these and other numerous comments during the regulatory process and made certain changes and clarifications discussed in this article that narrow the contexts in which a covered recommendation will constitute ERISA fiduciary investment advice.

Source: Cohenbuckmann.com, May 2024

New Fiduciary Suits, TDF Demographics and a Prudent Process Primer

The new year has brought with it two new genres of ERISA litigation, including the first-ever case of an employee alleging a fiduciary breach by the employer's health care plan practices. That said, cases involving prudent selection and monitoring of investments persist and continue to dominate the ERISA litigation arena. Most importantly for plan sponsors, several victories for plan fiduciaries remind us that a prudent process generally prevails and may be effective in fending off litigation.

Source: Napa-net.org, April 2024

University 403b Excessive Fee, Fiduciary Breach Suit Sacked, Again

It's said that if at first, you don't succeed, try, try again, but if you're suing in federal court, you had better make your case. The suit in question this time -- which was last decided in favor of the fiduciary defendants almost exactly a year ago -- had alleged fiduciary wrongdoing in the Georgetown University 403b plan.

Source: Napa-net.org, April 2024

Paychex Seeks to Move ERISA Case Over Intercepted 401k Assets to Federal Court

Paychex plans to fight a New York retirement lawsuit, alleging fiduciary breach, but argues that it belongs in a federal court because the court is the correct authority for a case under ERISA, a federal law.

Source: Plansponsor.com, April 2024

An Accident Waiting to Happen: Annuities, Spreads, and Fiduciary Liability

The DOL recently filed an amicus brief in the pending Home Depot 401k litigation. The DOL summed up a fiduciary's duties vis-a-vis cost-consciousness. At first glance, the issue of reasonable expenses would seem to be fairly straightforward. However, cost issues are arguably potentially more complicated, especially in connection with more complicated investments such as annuities, which often lack the transparency of other investments. As a result, plan sponsors may mistakenly believe they understand an investment and its costs, while closer examination often reveals issues they had not initially considered.

Source: Fiduciaryinvestsense.com, April 2024

Columbus Regional Healthcare System Reaches $2M Settlement in ERISA Class Action

Columbus Regional Healthcare System, Inc. and a class of some 6,800 retirement plan participants, recently advised a federal district court that they have reached a $2 million settlement in their pending ERISA case. The parties' joint filing detailed the settlement terms, which would end the plan participants' class action lawsuit in which they accused plan sponsors of losing them millions in retirement funds by charging them excessive administration fees and offering them poor investment choices.

Source: Hallbenefitslaw.com, April 2024

Recent Trends in Excessive Fee Litigation

As plan sponsors and fiduciaries are no doubt aware, there has been a substantial uptick in excessive fee litigation over the past few years. This article discusses cases since the Supreme Court's decision in Hughes v. Northwestern Univ., which reaffirmed that a plaintiff must plead facts establishing the plausibility of his claim.

Source: Bakerbotts.com, April 2024

"Red Flags" Ignored Says 401k Fiduciary Breach Suit

A suit alleging fiduciary breaches says that sustained underperformance and massive fund outflows provided signals that plan fiduciaries ignored. More specifically, the suit claims that "Defendants failed to appropriately monitor the Plan's investments, resulting in the retention of unsuitable investments in the Plan instead of prudent alternative investments that were readily available at all times Defendants selected and retained the funds at issue and throughout the Class Period. Since Defendants have discretion to select the investments made available to participants, Defendants' breaches directly caused the losses alleged herein."

Source: Napa-net.org, April 2024

Law Firm Finds Another 401k Plan to Slap with Forfeiture Fiduciary Breach Suit

Yet another national employer has been slapped with a suit alleging a fiduciary breach in their disposition of forfeitures. The employer/plan in question this time is Mattel. The arguments put forth are no longer acknowledging that this practice is permitted by law, and at least in some cases, sanctioned by specific language in the plan document. The suit here emphasizes the exercise of "discretionary authority and control over how these Plan assets are thereafter reallocated."

Source: Napa-net.org, April 2024

ESG in 401k Plans in the Wake of Spence v. American Airlines, Inc.

Whether investment decisions for pension, 401k, and other plans covered by ERISA should be influenced by environmental, social, and governance factors has become a flashpoint, and, unlike most ERISA issues, the controversy extends into the political arena. The recent opinion of a federal district court denying a motion to dismiss claims that ESG factors were improperly applied for 401k plan investments shows that ESG can bring risk to fiduciaries, even if they are not pursuing ESG strategies.

Source: Ktslaw.com, March 2024

AllianceBernstein 401k Lawsuit Booted

The US District Court for the Southern District of New York dismissed the plaintiffs' claims without prejudice, meaning that they can file an amended complaint to address the legal shortcomings within 30 days. The lawsuit, which was filed in 2022, failed to show that the asset manager could have breached its duties of prudence and loyalty, and it did not successfully allege any prohibited transactions, the court stated.

Source: Investmentnews.com, March 2024

Defense Contractor L3Harris Settles ERISA Class Action

A Florida district court judge has administratively closed an ERISA class action lawsuit against defense contractor L3Harris after the parties settled following mediation, subject to court approval of class counsel's motion for preliminary settlement approval, to be filed within 60 days.

Source: Hallbenefitslaw.com, March 2024

DOL Defends ESG Rule Against 5th Circuit Appeal

The DOL filed with the U.S. 5th Circuit Court of Appeals a defense of its rule governing "Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights," sometimes called the environmental, social, and governance rule, as complying with ERISA.

Source: Planadviser.com, March 2024

Federal Court Approves $6.75 Million Settlement of LinkedIn ERISA Class Action Lawsuit

The U.S. District Court for the Northern District of California has given final approval to a $6.75 million settlement of a class action lawsuit filed by current and former LinkedIn employees regarding their investment options in the company 401k plan. The settlement covers more than 17,000 people participating in the company's retirement plan from August 14, 2014, to July 1, 2020.

Source: Hallbenefitslaw.com, March 2024

Defendants in ESG Litigation File Motion for Summary Judgment

On February 26, 2024, defendants in Spence v. American Airlines filed a brief in support of a motion for summary judgment. Defendants' motion comes just days after the court had handed down a decision denying defendants' motion to dismiss. In this article, the authors review the defendants' arguments in this case, mainly because they usefully raise the issues of proof and causation that vex challenges to the prudence (and loyalty) of certain proxy voting positions. They begin with a more abstract discussion of challenges to fiduciary proxy voting decisions, as a way of framing the specific arguments, and then try to get an understanding of what is going on in Spence.

Source: Octoberthree.com, March 2024

An Easy Read on the Past and Future of 401k Plan Litigation

There is a story in Plan Adviser on the past and future of ERISA litigation over 401k plans. It's a fun and short read, neither of which is normally true of articles on this subject. That's a little tongue-in-cheek, but that phenomenon is nobody's fault. At its core, the article presents the question of whether the long and highly contentious history of this area of litigation has actually benefited participants. There are three points from the Plan Adviser article that the author touches on here.

Source: Bostonerisalaw.com, March 2024

401k World: The Litigators

The era of plan litigation began, from the plaintiffs' view, seeking to protect workers from retirement plan negligence. From the position of many plan fiduciaries and their defense attorneys, the trend has spurred a host of copy-cat complaints aiming to wring settlements from large plan sponsors and providers. Whichever side is more accurate at any given moment -- or if it's some combination of both -- one thing is certain: DC litigation remains relatively robust. This PLANADVISER In-Depth story considers 401k litigation's present and future.

Source: Planadviser.com, March 2024

Plaintiffs Request Judge Approve Settlement in ERISA Data Breach Lawsuit

Retirement plan participants whose personal identifiable information was exposed in a 2021 data breach have asked a Georgia federal judge to approve an $8.733 million agreement to resolve allegations, which claimed national consultant Horizon Actuarial Services LLC failed to safeguard their sensitive data.

Source: Plansponsor.com, March 2024

Yale University Challenges Appeal in 403b Excessive Fee Suit

In a lengthy filing (109 pages), Yale University says the plaintiffs who lost their excessive fee case in a jury trial shouldn't get a "do-over." More specifically, the Yale fiduciary defendants in that case have filed the aforementioned brief stating that the Second Circuit need not concern itself with entertaining an appeal of that judgment, the first (and to date only) jury trial in this genre of cases.

Source: Napa-net.org, March 2024

The American Airlines ESG Fiduciary Case Exposed the Problem With Mandated Proxy Voting

On January 31, 2003, the SEC adopted Rule 206(4)-6(c) under its Rules and Regulations of the Investment Advisers Act of 1940. Since that time, it has revised that rule to account for some concerns that arose out of the original regulations. The question is whether they've addressed the real problem.

Source: Fiduciarynews.com, March 2024

The Hy-Vee Summary Judgment Record Highlights How Many Large Plan Sponsors are Unfairly Sued: Opinion

In March 2022, the prolific Capozzi law firm sued the jumbo Hy-Vee, Inc. defined contribution plan for excessive recordkeeping fees. The lawsuit was brought with false pretenses of alleged fiduciary malpractice based on misleading circumstantial evidence and false facts to survive a motion to dismiss. The Hy-Vee case is worth studying to understand the prejudicial effect of allowing the trial bar to serve as America's fiduciary regulator of plan fees and investment performance.

Source: Encorefiduciary.com, March 2024

$61 Million Settlement Finalized in GE ERISA Case

Final approval on the long-running GE ERISA case came with Judge Indira Talwani of the U.S. District Court for the District of Massachusetts granting a $61 million cash settlement in the case Haskins, et al. v. General Electric, et al. It marks the largest settlement ever in an ERISA case alleging a retirement plan improperly offered proprietary funds.

Source: 401kspecialistmag.com, March 2024

Price Chopper, Tops Owner Sued Over 401k

Northeast Grocery, the conglomerate that owns Price Chopper/Market 32 and the Tops supermarket chains, is being sued in federal court over its management of the 401k retirement accounts it offers to employees. The lawsuit alleges supermarket conglomerate didn't manage mutual fund fees, leading to lower overall returns for retirees.

Source: Timesunion.com, March 2024

Another 401k Plan Sponsor Faces Novel Suit Regarding Its Use of Forfeiture Funds

This latest suit alleges that the plan sponsor failed to use forfeiture funds to lessen plan administrative expenses, which would have reduced or eliminated the amounts charged to the accounts of plan participants for administrative expenses. In some of the prior lawsuits, plaintiffs have alleged that the governing plan documents explicitly provided that plan sponsors could use forfeitures to lower contributions owed to the plans. This complaint is devoid of such allegations and is a "novel theory."

Source: Jonesday.com, March 2024

Multi-Billion Dollar 401k Settles Excessive Fee Suit

The parties in yet another 401k excessive fee suit have come to terms after two years of litigation. In exchange for releasing their claims, the Settlement (Stengl et al. v. L3Harris Technologies) provides that the L3Harris defendants will pay $650,000 to Class Members.

Source: Napa-net.org, March 2024

More Proof Prudence Prevails in 401k Litigation: Podcast

Some recent suits -- and federal court rulings -- provide some timely reminders about the importance of a prudent process and following the plan document. In this podcast, Nevin Adams and Fred Reish discuss the background, issues, and implications.

Source: Napa-net.org, March 2024

FlexPATH, Wood Group Beat TDF-Selection-Based Lawsuit

A California district court has ruled in favor of the defendants in a case brought by 401k participants alleging that the plan sponsor and investment manager breached their fiduciary duties by imprudently selecting and sticking with target-date funds affiliated with the 3(38) investment manager and plan adviser. The 401k participants alleged that, rather than acting in the best interest of participants under ERISA, the plan sponsor and NFP Retirement prioritized investing in collective investment trusts managed by NFP affiliate flexPath, as well as failing to use the plan's size to bargain for lower fees.

Source: Planadviser.com, March 2024

401k Fee Suits Tossed for Pleading Deficiencies Is Positive Trend for Plan Fiduciaries

While it is hard to reconcile Judge Griesbach's dismissal of three lawsuits in one day with his refusal to dismiss similar lawsuits several days later, the dismissals for failure to include appropriate comparator plans are a positive trend for 401k plan fiduciaries in the Seventh Circuit and has gained steam in the Sixth and Eighth Circuits as well. In these jurisdictions, plaintiffs are on notice that their complaints must provide allegations of meaningful comparator plans of similar size that received similar recordkeeping services to the plan at issue. Complaints lacking this specificity may face an early exit from litigation.

Source: Faegredrinker.com, February 2024

Actuary Company Reaches $4M Settlement in 401k Fee Class Action Suit

Insurance Services Offices Inc., an actuarial and underwriting company, has agreed to pay $4 million to settle a proposed class action lawsuit filed by ex-employees concerning its 401k Savings and Employee Stock Ownership Plan. The former workers alleged that ISO charged them excessive fees and failed to monitor the plan's investments in violation of ERISA.

Source: Hallbenefitslaw.com, February 2024

California District Court Denies Motion to Dismiss 401k Excessive Fee and Underperformance Claims

A California district court recently denied a motion to dismiss claims that the fiduciaries of a 401k plan breached their ERISA fiduciary duties of prudence and loyalty by selecting underperforming, high-cost investments and causing the plan to pay excessive fees for services. The decision is notable for illustrating how pleading standards in investment performance and excessive fee litigation vary depending on jurisdiction.

Source: Erisapracticecenter.com, February 2024

DOL Gets Temporary Restraining Order Against TPA

The DOL has gone to court to protect retirement plan assets in a case of alleged embezzlement by a TPA. According to the DOL, RiversEdge is a third-party administrator of at least 240 retirement plans that hold millions of dollars in plan assets and acts as an agent to manage and administer plan assets, at least 229 of these retirement plans are covered by ERISA.

Source: Napa-net.org, February 2024

Impact on ERISA Regulation if Supreme Court Throws Chevron Deference Overboard

Although Relentless and Loper Bright do not directly implicate ERISA, a repeal of Chevron deference would almost certainly affect how courts treat regulations under ERISA. Two current ERISA hot topics that come to mind are the proposed Retirement Security Rule and the Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights rule. If the Court abandons or curtails the Chevron deference, ERISA regulations adopted by the DOL may be more heavily scrutinized, modified, or vacated by federal courts.

Source: Morganlewis.com, February 2024

Honeywell Hit With Forfeiture-Related Fiduciary Breach Suit

Another suit has been filed against a large employer for allegedly not acting in participants' best interest in their use of forfeitures, but with some twists in the arguments. The target this time is the fiduciaries of the Honeywell 401k plan who, according to the participant-plaintiff, have (1) breached their fiduciary duties under ERISA, (2) violated ERISA's anti-inurement provision, and (3) engaged in "self-dealing and transactions prohibited by ERISA."

Source: Napa-net.org, February 2024

Milliman Headed to Trial Over Its 401k

Late last week, the company's request to quash the case through summary judgment was shot down by the judge presiding over it, who scheduled a rare bench trial to begin April 1. Whether the case goes to trial is a question. Clearing motions to dismiss and defense motions for summary judgment are considered significant victories for plaintiffs, and getting over those hurdles adds pressure to settle.

Source: Investmentnews.com, February 2024

Wisconsin Federal District Court Issues Five Rulings on Motions to Dismiss 401k Investment and Fee Cases: Is There a Way to Reconcile Them?

Defense counsel frequently laments the difficulties of defending 401k investment and recordkeeping fee litigation when different judges render conflicting rulings on motions to dismiss seemingly indistinguishable complaints. For that reason, the author of the article thought it would be interesting to track the decisions by a single judge in the Eastern District of Wisconsin who rendered five rulings in this arena within one week. The hope was that the rulings would provide some insight as to distinguishing features that, at least for this judge, would drive the outcome of each motion to dismiss.

Source: Erisapracticecenter.com, February 2024

Five Important ERISA Decisions Rounded Out 2023

Federal appellate courts issued various decisions involving ERISA in the latter half of 2023. Here are five important ERISA decisions that benefit attorneys should know.

Source: Hallbenefitslaw.com, February 2024

CoreLogic Clears 401k Excessive Fee Claims

Another 401k excessive fee suit has been dismissed because the participant bringing suit suffered no injury, and thus, had no grounds to bring suit according to a federal court. The suit charged that CoreLogic, Inc. together with its plan administrator, breached its duties under ERISA to employees invested in its 401k retirement plan.

Source: Napa-net.org, February 2024

Forfeiture Litigation Raises New Issues for Plan Fiduciaries

Groom Law Group's George M. Sepsakos covers allegations and potential implications of recent lawsuits against plan fiduciaries related to the use of plan forfeitures.

Source: 401kspecialistmag.com, January 2024

401k Excessive Fee Suit Finally Dismissed

Noting that "at some point, there must be some endpoint to this time-consuming and expensive cycle of litigation," a federal judge has dismissed a 401k excessive fee suit. That "expensive cycle" dates back to October 2020 when a suit (Guyes et al. v. Nestle USA Inc. et al.) was brought in the U.S. District Court for the Eastern District of Wisconsin.

Source: Napa-net.org, January 2024

ERISA Litigation Faces New Frontiers in 2024

In 2023, just over 100 new class actions were filed under ERISA. This is the lowest number filed since 2018, largely driven by fewer new cases alleging excessive fees in retirement plans. This article explores what 2024 could bring for ERISA litigation regarding excessive fee cases, prohibited transaction cases, health plan fee cases, and more.

Source: Groom.com, January 2024

401k Fiduciary Warning: This Is How the Supreme Court's Chevron Decision Might Impact the Retirement Plan Industry

The nation's highest court heard arguments involving the National Marine Fisheries Service. It seems they don't appreciate the government requiring fishing companies to pay certain regulatory costs. This concept is allowed under a 1984 Supreme Court decision involving Chevron. Overturning Chevron will not only impact the fishing business but all regulated activities, including the retirement plan industry. There are some immediate ramifications for plan sponsors and they will need to pay close attention to events as they unfold.

Source: Fiduciarynews.com, January 2024

Could Have, or Would Have, That Is the ERISA Question

An extremely rare jury verdict in an ERISA fiduciary breach case has led to a Shakesperean-like quandary. "Could Have, or Would Have, That is the Question." According to the class, the jury did not receive adequate guidance on how to assess loss and damages. The class claimed that the district court incorrectly instructed the jury that Yale and its fiduciary committee could avoid financial liability merely by showing that a prudent fiduciary "could have" made the same decisions, rather than requiring defendants to prove that a prudent fiduciary "would have" made the same decisions.

Source: Cohenbuckmann.com, January 2024

DOL Sues Defunct Maryland Biz for Unremitted 401k Contributions

The DOL announced this week that it has filed a lawsuit against now-defunct Elkridge, Md.-based computer forensic company Jones Dykstra and Associates Inc. and its co-owners for failing to remit nearly $44,000 in participant and employer contributions to the company's 401k profit-sharing plan for five years.

Source: 401kspecialistmag.com, January 2024

Intuit Files to Dismiss Forfeiture Fiduciary Breach Suit

"If this is the law, then that would be news to Congress and the regulatory agencies, which have declared for decades that forfeitures can be used in this manner," says a motion to dismiss a lawsuit alleging a fiduciary breach in offsetting employer contributions with forfeitures.

Source: Napa-net.org, January 2024

Summary of 2023 401k Excess Fee and Performance Litigation

In all, 2023 was a year of significant activity in pending cases, with a record forty-two settlements, a record number of motions to dismiss, summary judgment, and appellate rulings, and at least five cases being tried, including one before a jury. With new plaintiff firms entering the fray, all signs point to a continued high volume of excess fee cases and heightened risk exposure for sponsors of America's large retirement plans, especially jumbo-sized plans. Here is a summary of the 2023 case filings, trends, and reported settlements in ERISA excess fee and performance litigation.

Source: Euclidspecialty.com, January 2024

DOL Successfully Sues Employer for Misuse of Forfeitures

Several lawsuits have recently been filed regarding the alleged misuse of forfeitures, but just a couple of months ago a plan was sued and lost a case brought by the DOL for not following the plan document's forfeiture provisions. Details of the case here.

Source: Napa-net.org, January 2024

Parties Strike Settlement in Excessive Fee Suit

A billion-dollar plan has come to terms with participant plaintiffs represented by Capozzi Adler who had made claims the plan paid $77 per participant when plans of similar sizes were paying as little as $25 per participant. The suit had been filed against Advance Stores Company, the plan sponsor and a named fiduciary, as well as the Retirement Committee of Advance Auto Parts 401k Plan.

Source: Napa-net.org, December 2023


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