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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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Plaintiffs Claim Deloitte Breached ERISA Prudence Duties

Plaintiffs have filed a new ERISA lawsuit in the U.S. District Court for the Southern District of New York, naming as defendants Deloitte LLP, the company's board of directors, and various other related entities. The suit alleges the defendants permitted the payment of excessive administrative and recordkeeping fees in the operation of a 401k plan and a profit-sharing plan provided to Deloitte employees.

Source: Planadviser.com, October 2021

401k Fee Litigation: What Must a Plaintiff Allege to Survive a Motion to Dismiss?

This term the Supreme Court is considering -- for the first time -- critical issues in DC plan fee litigation, in Hughes v. Northwestern. This piece discusses the recent decision by the United States District Court for the Southern District of Ohio, dismissing plaintiffs' claims in Forman v. TriHealth, Inc. 401k Retirement Savings Plan Retirement Committee. Forman illustrates an issue that is also likely to be presented in Hughes: how fact-specific must plaintiffs' complaint be to survive a motion to dismiss?

Source: Octoberthree.com, October 2021

How Fiduciaries Can Help Protect Themselves from Excessive Fee Litigation

Employers that sponsor a retirement plan should be concerned with the risk of excessive fee claims, as the number of these has skyrocketed recently. Chubb's Alison Martin shares steps plan fiduciaries can take to reduce the chances of a lawsuit or increase their chances of successfully defending against one.

Source: 401kspecialistmag.com, October 2021

Aon Triumphs in ERISA Suit Over Lowe's Investments

A judge determined the firm didn't breach its ERISA fiduciary duties when it encouraged Lowe's to move more than a billion dollars in plan assets to one of Aon's investment funds.

Source: Planadviser.com, October 2021

TIAA Faces New Managed Account Rollover Complaint

A new lawsuit suggests the individual advisory program TIAA clients were rolled into was significantly more expensive and generated hundreds of millions of dollars in fees for TIAA, without providing commensurate performance benefits.

Source: Planadviser.com, October 2021

Six Excessive Fee Suits Paused for SCOTUS Ruling

A federal judge has put a half dozen excessive fee suits on hold pending a decision by the U.S. Supreme Court in a case that "will likely clarify the pleading requirements for ERISA breach of fiduciary claims in cases such as this...." That was the determination of Judge William C. Griesbach regarding six cases pending in the U.S. District Court for the Eastern District of Wisconsin.

Source: Ntsa-net.org, October 2021

AT&T Fends Off 401k Fee Suit

AT&T saw a big win in a five-year-old lawsuit over its 401k plan, with a federal judge on Sept. 28 granting summary judgment in the company's favor. In 2017, the telecommunications giant was sued in U.S. District Court in Central California for alleged fiduciary breaches in the plan, including claims over administrative fees paid to the plan provider, Fidelity, as well as to indirect compensation that Financial Engines paid to that firm.

Source: Investmentnews.com (registration may be required), October 2021

District Court Dismisses ERISA 401k Performance and Fee Putative Class Action

The District Court for the Southern District of Ohio recently dismissed an ERISA putative class action lawsuit asserting fiduciary duty claims based on allegations of unreasonably high administrative fees and relatively higher-cost, underperforming funds offered in TriHealth, Inc.'s 401k plan. Plaintiffs were TriHealth 401k Plan participants and beneficiaries. On behalf of a putative class, they alleged that TriHealth and the Plan's Retirement Committee breached their duties of prudence and loyalty to Plaintiffs.

Source: Erisalitigationadvisor.com, October 2021

Murder Victim's Son Can Get Money From 401k Linked to Killers

The son of a man murdered by a Colombian guerrilla group can obtain money from a 401k account connected to the perpetrators, a Massachusetts federal judge ruled, deciding a novel legal question involving federal benefits and anti-terrorism laws. Fidelity Investments can turn over 401k assets to the victim’s son under the Terrorism Risk Insurance Act of 2002 without violating the federal law protecting retirement plan assets from being used for other purposes.

Source: Investmentnews.com (registration may be required), October 2021

Seventh Circuit Weighs in on Arbitration and Class Waiver Provisions in DC Plans

The Seventh Circuit decided Smith v. Board of Directors of Triad Manufacturing Inc. holding that benefit plans may require claimants to arbitrate claims under the Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1001, et seq., but may not preclude claimants from obtaining relief that ERISA provides.

Source: Faegredrinker.com, October 2021

Exposing Excessive Fee Litigation Against America's DC Plans

This 24-page whitepaper is designed to highlight the problem of excessive fee lawsuits and present a sensible framework to restore sanity and fairness to the defined contribution landscape.

Source: Euclidspecialty.com, October 2021

AT&T Win Is Road Map for Defense of 401k Fees

AT&T's defeat of a massive class action challenging its retirement plan's recordkeeping fees could help other plan sponsors defend against similar disputes. The flood of class actions brought in recent years over allegedly excessive 401k plan fees isn't letting up. But with more companies choosing to fight rather than settle, defense attorneys say AT&T's case could serve as a road map for what evidence needs to be produced to prevail at trial.

Source: Bloomberglaw.com, October 2021

Recent Court Decisions Extend the Statute of Limitations for Breach of Fiduciary Duty Lawsuits Under ERISA

The U.S. Supreme Court's decision in Sulyma and reliance on that decision by the District Court in the Bowers case have significantly weakened the three-year statute of limitations defense for fiduciary breach cases based on actual knowledge of a breach. In light of these decisions, plan fiduciaries should take actions outlined here to foreclose fiduciary breach suits and make the strongest possible case to have a fiduciary breach suit dismissed.

Source: Verrill-law.com, September 2021

Seventh Circuit Rejects Plan's Attempt to Compel Individual Arbitration

Recognizing that the Plan contained an unambiguous arbitration provision, and that "ERISA claims are generally arbitrable," the Seventh Circuit Court of Appeals nonetheless found that arbitration could not be compelled where the provision prospectively barred the plaintiff from pursuing certain statutory remedies.

Source: Beneficiallyyours.com, September 2021

Insurance Agents Charged With Duping California Educators in 403b Plans

The owner of a 403b plan administration firm and another insurance agent allegedly convinced educators to roll retirement plan money into an IRA to invest in the owner's companies, which were in poor financial shape.

Source: Plansponsor.com, September 2021

Northern Trust Accused of Fiduciary Breaches Related to AutoZone 401k

Northern Trust Corporation and Northern Trust, Inc., as investment fiduciaries, have been added as defendants in a lawsuit accusing AutoZone 401k plan fiduciaries of violating their ERISA fiduciary duties by permitting Prudential to steer an excess of assets towards its proprietary products via the GoalMaker asset-allocation solution.

Source: Planadviser.com, September 2021

Courts Giving DOL More Time to Claim ERISA Violations

The Department of Labor is relying on a recent Supreme Court decision to effectively extend the amount of time the agency has to bring fiduciary breach claims. DOL investigations often last years, so it is common for DOL to run up against the statute of limitations under ERISA.

Source: Groom.com, September 2021

District Court Dismisses Investment and Recordkeeping Claims Against 401k Plan Fiduciaries

A Kentucky federal district court ruled that a participant in CommonSpirit Health's 401k plan failed to state plausible claims for breach of fiduciary duty related to the fees and performance of actively managed target-date funds and recordkeeping fee. The court first rejected the plaintiff's claim that the plan fiduciaries should have offered a passively managed target-date suite instead of a more expensive and underperforming actively managed target-date suite because "actively managed funds and passively managed funds are not ideal comparators."

Source: Erisapracticecenter.com, September 2021

401k Fee Class Action Against Oshkosh Corporation Dismissed with Prejudice

Recently, the United States District Court for the Eastern District of Wisconsin granted a Motion to Dismiss, dismissing ERISA breach of fiduciary duty claims, failure to monitor claims, and prohibited transaction claims in a putative class action involving Oshkosh Corporation's 401k Plan. The district court relied heavily on Seventh Circuit precedent to dismiss the complaint, with prejudice, holding that it was not possible to plausibly infer violations of ERISA's duties, under Federal Rule of Civil Procedure 12(b)(6).

Source: Erisalitigationadvisor.com, September 2021

L Brands ERISA Lawsuit May Proceed

A judge has determined the fiduciary breach lawsuit filed against the former parent company of Victoria's Secret and Bath and Body Works, alleging excessive recordkeeping fees and other issues, may proceed to discovery.

Source: Planadviser.com, September 2021

Most Claims Move Forward in Suit Over Aon CITs in 401k Plan

A federal judge has denied motions to dismiss a lawsuit alleging fiduciaries of the Centerra Group 401k plan violated ERISA by selecting poorly performing collective investment trusts for the plan and allowing for excessive recordkeeping fees.

Source: Planadviser.com, September 2021

Complex Ruling Sees Nvidia ERISA Lawsuit Dismissed

The dismissal order in the case includes several points of success for the plaintiffs, and while the suit has been tossed out due to a lack of standing, the court has left room for them to file an amended complaint.

Source: Planadviser.com, September 2021

CommonSpirit ERISA Suit Dismissed

An ERISA lawsuit challenging CommonSpirit Health's use of the Fidelity Freedom Funds target-date fund series and its recordkeeping fees has been dropped. The U.S. District Court for the Eastern District of Kentucky granted the defendant's motion to dismiss the complaint after agreeing that the plaintiff did not allege facts that proved imprudent conduct on the part of the defendants.

Source: Planadviser.com, September 2021

Analyzing the BrightScope DC Plan Data in the Context of Excessive Fee Lawsuits

The annual report provides insights into plan design and trends and represents the most comprehensive data available to understand defined contribution plan fees. BrightScope has an express disclaimer that its report is for general information on fees and is not intended for benchmarking the costs of specific plans. But plaintiff lawyers often ignore this disclaimer and cite the report to support their excessive fee claims, and thus it is important to analyze the BrightScope data to evaluate how your plan compares. This article documents the significant trends and statistics in the BrightScope report.

Source: Euclidspecialty.com, September 2021

Second Circuit Revives Share-Class Claim in NYU Retirement Plan Class Action

The Second Circuit recently vacated the district court's dismissal of Plaintiffs' share-class claim. Sacerdote v. New York Univ. To begin, the Court observed that the notion that "prudent fiduciaries may very well choose to offer retail class shares over institutional class shares' because retail shares offer greater liquidity provides no basis to dismiss pleadings that otherwise generate plausible inferences of the claimed misconduct."

Source: Erisalitigationadvisor.com, September 2021

Oshkosh ERISA Challenge Squashed by District Court

Following oral testimony and arguments in December, the U.S. District Court for the Eastern District of Wisconsin has ruled against the plaintiffs in an ERISA fiduciary breach lawsuit filed against Oshkosh Corp., its board of directors, its retirement plan administration committee and some 30 individuals alleged to be fiduciaries. The lawsuit has been dismissed under Federal Rule of Civil Procedure 12(b)(6), with prejudice, based on the court's conclusion that the amended complaint fails to state a claim upon which relief can be granted.

Source: Planadviser.com, September 2021

Court Rules Inherited 401k Funds Are Protected in Bankruptcy

A North Carolina Bankruptcy Court decided that inherited 401k accounts do indeed receive creditor protection under ERISA as long as the funds are still in the plan at the time of the bankruptcy filing.

Source: Investmentnews.com (registration may be required), September 2021

Judge Dismisses Kraft Heinz Stock-Drop Lawsuit

A federal judge in Chicago dismissed a stock-drop lawsuit against fiduciaries of Kraft Heinz Food Co.'s defined contribution plans by participants who claimed defendants should have acted to protect participants' investments by disclosing unfavorable financial information. The complaint "is fuzzy on exactly what plaintiffs believe defendants should have disclosed and when," U.S. District Court Judge Robert M. Dow Jr. wrote on Aug. 23.

Source: Pionline.com, August 2021

U.S. Chamber Weighs in (Again) on Excessive Fee Suit Surge

Noting that "converting subpar allegations into settlements has proven a lucrative endeavor -- mostly for the lawyers bringing these lawsuits," the U.S. Chamber of Commerce has weighed in on the surge in retirement plan fee litigation. That was just one of the ways the Chamber (and its legal counsel in the matter, Goodwin Proctor LLP) characterized the plethora of lawsuits involving retirement plans.

Source: Napa-net.org, August 2021

Suit Over Recordkeeping Fees for PNC Financial's Retirement Plan Dismissed

A federal court has dismissed a lawsuit alleging PNC Financial Services Group and its Incentive Savings Plan administrative committee violated their duties of prudence and loyalty by causing the plan to pay excessive administrative and recordkeeping fees. The court found that the plaintiffs did not state a plausible claim for breach of fiduciary duties. They have already filed an amended complaint.

Source: Planadviser.com, August 2021

Supreme Court to Weigh in on Retirement Plan Fiduciary Duty to Manage Plan Fees

This paper provides background on ERISA's requirements for retirement plans and plan fiduciaries, discusses the issues before the Supreme Court in Hughes v. Northwestern University, and concludes with select legal considerations for Congress.

Source: Congress.gov, August 2021

Juniper Networks Is Latest ERISA Lawsuit Target

The claims included in the complaint, which in some respects directly contradict arguments made by other plaintiffs in related fiduciary breach cases, underscore just how many potential avenues for scrutiny plan sponsors face.

Source: Planadviser.com, August 2021

Complex Ruling Issued in Valeant Pharma-Linked ERISA Suit

The U.S. District Court for the Southern District of New York has filed a ruling in a complex ERISA fiduciary breach lawsuit. The plaintiffs are employees and retirement plan participants at DST Systems who argue the defendants pursued "an exceptionally imprudent investment strategy" concerning a significant portion of their retirement assets.

Source: Planadviser.com, August 2021

Baptist Health South Florida Faces ERISA Excessive Fee Suit

The claims are typical of excessive fee suits, but the plaintiffs also cite language from the 403b plan's investment policy statement and say plan fiduciaries didn't follow it.

Source: Planadviser.com, August 2021

The Pleading Standard for Excessive Fee Lawsuits: An In-Depth Analysis of the Northwestern Excessive Fee Case

Euclid's new whitepaper analyzes how the Supreme Court should review the Hughes v. Northwestern excessive fee lawsuit in the upcoming Fall term, by establishing a more consistent and rigorous standard to weed out speculative and unsubstantiated claims that the retirement fees for many of America's largest defined contribution plans are too high.

Source: Euclidspecialty.com, August 2021

Xerox Hit With ERISA Suit Alleging Excessive Fees

Participants of the Xerox Corp. 401k Savings Plan have filed an ERISA lawsuit against Xerox Corp., its plan administration committee, and various individual defendants alleging imprudent recordkeeping fees. The complaint claims participants overpaid millions of dollars to Xerox's recordkeeper from 2015 through 2021.

Source: Planadviser.com, August 2021

Managed Accounts the Focus of 401k Excessive Fee Suit

The fiduciaries of another billion-dollar 401k plan have found themselves in the cross-hairs of an excessive fee suit and the fees for the managed accounts have been called out for special scrutiny.

Source: Napa-net.org, August 2021

United States District Court Dismisses 401k Plan Recordkeeper Fee Complaint

Recently, the United States District Court for the Western District of Pennsylvania granted a Motion to Dismiss, dismissing ERISA breach of fiduciary duty claims based on excessive recordkeeping fee allegations. The district court addressed the level of detail plaintiffs must provide to move an ERISA breach of fiduciary duty recordkeeping fee allegation from possible to plausible under Federal Rule of Civil Procedure 12(b)(6).

Source: Erisalitigationadvisor.com, August 2021

Court Denies Dismissal of Amway ERISA Lawsuit

The U.S. District Court for the Western District of Michigan has ruled against the defense's dismissal motion in an ERISA lawsuit filed last year against Alticor Inc., the parent company of Amway. Among other allegations, the complaint says the defendants continued to offer certain investment options despite the availability of identical or similar investment options with lower costs and/or better performance.

Source: Planadviser.com, August 2021

401k Suit Claims Higher Revenue-Sharing Funds Should Have Been Used

Had Juniper Networks' plan used higher-revenue-sharing share classes, net costs conceivably could have been lower, if those fees were rebated back to participants, according to the complaint.

Source: Investmentnews.com (registration may be required), August 2021

6th Circ Rejects Bankruptcy Shield for 401k Contributions, in Certain Cases

Individuals who have filed for Chapter 13 bankruptcy may not protect 401k contributions from creditors if they were not already making those contributions in the months leading up to the bankruptcy, an appeals court ruled.

Source: Reuters.com, August 2021

Law Group Argues That Court Misapplied "Thole" Ruling in ERISA Case

An amicus brief filed in a case involving Universal Health Services says a district court erred when it found the plaintiffs have standing to sue over 401k plan investments in which they did not invest.

Source: Planadviser.com, August 2021

Plaintiffs Make a Splash in SeaWorld 401k Lawsuit

SeaWorld this week was sued by several participants in its $310 million 401k plan, allegedly for letting fees for investments and service providers run out of control. Part of the case involves adviser compensation.

Source: Investmentnews.com (registration may be required), August 2021

Embezzler's 401k Tapped for Restitution

Can a 401k account be accessed as restitution for embezzlement from the company that sponsors the 401k? In the case at hand (United States v. Frank), Jon Lawrence Frank embezzled over $19 million from his former employer, NCI Information Systems. This appeal arises out of the government's effort to garnish Frank's 401k retirement account under the Mandatory Victims Restitution Act of 1996 to "further satisfy the criminal restitution order against him."

Source: Asppa.org, August 2021

District Court Partially Dismisses ERISA 401k Fee and Performance Claims for Lack of Standing

A federal district court in New York recently granted Omnicom Group Inc.'s motion to dismiss, for lack of Article III standing, claims challenging the offering of investment options in Omnicom's 401k plan in which the plaintiff participants did not invest. The court denied Omnicom's motion to dismiss, however, with respect to the remainder of the claims, which alleged that Omnicom's administrative committee breached its fiduciary duties under ERISA by including allegedly costly and underperforming funds in its 401k plan, causing the plan to pay excessive recordkeeping fees and offering an investment lineup that was overly expensive.

Source: Erisapracticecenter.com, August 2021

Fifth Circuit Holds Participants Lack Standing to Challenge Plan Investment Options

Last year, a judge in the Northern District of Texas dismissed the case, holding that plaintiffs lacked Article III standing to pursue their claims. In so holding, the court explained that any harm from defendants' failure to offer a stable value fund was speculative since: (i) plaintiffs did not show they would have invested in a stable value fund had it been available to them; and (ii) even when it did become available, plaintiffs did not invest in it. The Fifth Circuit agreed with the district court's conclusion that the plaintiffs lacked standing to bring their claims, but employed slightly different reasoning.

Source: Erisapracticecenter.com, August 2021

Great-West Wins (Again) in Excessive Fee Suit

An excessive fee suit that had been dismissed -- and wound up triggering a sanction (and fine) against the plaintiffs' counsel -- has once again fallen short in its appeal. The suit -- which was dismissed last August -- was two suits, brought by participants (Obeslo, Hall, and Gorrell-Deyerle) in plans that had chosen Empower as recordkeeper, and investment options from Great-West and other fund complexes from which participants could choose.

Source: Napa-net.org, August 2021

Fifth Circuit: Plan Participants Lacked Standing to Bring ERISA Fiduciary Breach Claims

American Airlines, Inc. and its affiliated credit union recently defeated an appeal challenging a low-yield investment option in the airline's 401k plan when the Fifth Circuit ruled that the plan participants lacked Article III standing to bring their ERISA claims.

Source: Erisalitigationadvisor.com, July 2021

A Ninth Circuit Ruling Reminds ERISA Plans of the Importance of Administrative Accuracy

The Ninth Circuit's recent decision in Bafford v. Northrop Grumman affirmed the district court's dismissal of the plaintiffs' breach of fiduciary duty claims under ERISA but vacated the district court's holding that state-law professional and negligent misrepresentation claims were preempted. The plaintiffs alleged that Northrup, the Committee, and the recordkeeper breached their fiduciary duties and failed to provide benefits information required under ERISA. In addition, the plaintiffs alleged that the recordkeeper was liable for professional negligence and negligent misrepresentation.

Source: Faegredrinker.com, July 2021

Plaintiff Lacks Standing to Challenge Retirement Plan Investment Options and Fees

On July 16, 2021, the District Court for the Western District of Wisconsin dismissed without prejudice four ERISA claims brought by a former employee alleging mismanagement of Infinity's DC 401k plan. Plaintiff alleged that plan fiduciaries violated their fiduciary duties by offering allegedly imprudent, actively managed investment options, and by paying excessive administrative and recordkeeping fees. The court found that the plaintiff lacked standing to assert her ERISA claims for two main reasons.

Source: Erisalitigationadvisor.com, July 2021

Mitigating Fiduciary Risk: Lessons Learned About the Prudent Person Rule After Fifteen Years of Fee Litigation

Excessive fee litigation has encouraged the reexamination of fiduciary best practices. Although the facts underlying these cases vary, the fundamental questions in each case pertain to the process by which the fiduciaries carried out their responsibilities. As courts have grappled with questions of fiduciary responsibility, a body of case law has been developed that provides valuable guidance on methods plan fiduciaries may use to mitigate their risk if faced with a lawsuit or government investigation. This article addresses the duty of prudence in monitoring plan investments, thereby mitigating fiduciary risk through the lens of that body of case law.

Source: Truckerhuss.com, July 2021

MetLife Accused of Favoring Proprietary Index Funds in 401k

Current and former participants of the MetLife 401k Plan have filed a lawsuit alleging the plan's fiduciaries violated ERISA's duties of loyalty and prudence "by applying an imprudent and disloyal preference for MetLife index fund products within the plan, despite their poor performance, high costs and lack of traction among fiduciaries of similarly sized plans." According to the complaint, the defendants' conduct has cost plan participants millions of dollars over the period defined in the lawsuit.

Source: Planadviser.com, July 2021

TIAA Subsidiary's SEC Settlement Requires Rollover Reforms

The SEC revealed that TIAA-CREF Individual & Institutional Services LLC, a firm known as "TC Services," will pay $97 million to settle charges of making inaccurate and misleading statements to rollover clients. According to the SEC, the settlement will also resolve allegations that the firm failed to adequately disclose conflicts of interest to thousands of participants in TIAA record-kept employer-sponsored retirement plans.

Source: Plansponsor.com, July 2021

District Court Denies Interlocutory Appeal for Novel Issue of "Hardwired" 401k Plans

A federal district court in Maryland recently declined to certify an interlocutory appeal to the Fourth Circuit on the issue of whether financial institutions can "hardwire" a preference for their proprietary investment vehicles into their employees' 401k plans. In so ruling, the district court prevented, at least for now, an opportunity for an appellate court to consider an issue that could significantly impact the adjudication of fiduciary breach challenges to the offering of proprietary funds in 401k plans.

Source: Erisapracticecenter.com, July 2021

Supreme Court Will Hear Case Challenging Retirement Plan Investment and Recordkeeper Fees

The Supreme Court recently granted the writ of certiorari requested by Northwestern University retirement plan participants, following the Solicitor General's plea for the Court to hear the case. The certiorari petition phrased the question presented as: "[w]hether allegations that a defined-contribution retirement plan paid or charged its participants fees that substantially exceeded fees for alternative available investment products or services are sufficient to state a claim against plan fiduciaries for breach of the duty of prudence under ERISA."

Source: Erisalitigationadvisor.com, July 2021

Koch Industries Agrees to $4 Million Settlement of ERISA Excessive Fee Suit

Koch Industries has agreed to pay $4 million to settle a lawsuit alleging the company, Koch Business Solutions, and the Koch Benefits Administrative Committee allowed excessive recordkeeping fees to be charged to participants in Koch-affiliated DC retirement plans. In addition to the monetary relief, the terms of the proposed settlement provided that the defendants will issue an RFP for recordkeeping services for the plans within 180 days of the settlement effective date.

Source: Planadviser.com, July 2021

Tenth Circuit Addresses Damages for Excessive Recordkeeping Fee Claims

One of the recent cases challenging the recordkeeping fees of 401k plans recently made its way to the Tenth Circuit Court of Appeals. Following a bench trial that resulted in a determination that the fiduciaries of Banner Health’s 401k plan had failed to monitor the plan's uncapped, asset-based, revenue sharing arrangement with Fidelity, the Court affirmed the district court's rejection of the plaintiffs' expert testimony on damages and fashioning of its method to calculate the plan's losses due to the excessive recordkeeping fees.

Source: Erisapracticecenter.com, July 2021

ERISA 401k Performance and Fee Litigation Dismissed for Failure to Provide Comparable Benchmark

The District Court for the Southern District of Iowa recently dismissed an ERISA putative class action lawsuit challenging 401k performance and fees after plan participants failed to identify appropriate benchmarks in their complaint. The court reinforced the Eighth Circuit's standards for stating such claims, requiring that the plaintiffs allege facts establishing "a meaningful benchmark for assessing the performance of the challenged funds."

Source: Erisalitigationadvisor.com, July 2021

Schlichter Excessive Fee Bid Gets Whacked

After a split decision on the merits and a $3.1 million settlement, the plaintiffs' attorneys asked for a fee of $5.4 million. Guess what the judge allowed? In the case at hand -- Ramos v. Banner Health -- the plaintiffs just last month lost their appeal of parts of a decision that, largely, favored the fiduciary defendants in the $2.2 billion 401k plan.

Source: Napa-net.org, July 2021

401k Lawsuit Alleges Excessive Adviser Compensation

A comprehensive lawsuit filed this week against large AAA member groups alleges that plan participants overpaid for years for investments and services, including compensation to Wells Fargo and Captrust. The defendants did not appear to solicit competitive bids for record-keeping services and allowed funds with high revenue-sharing to compensate service providers, according to the complaint.

Source: Investmentnews.com (registration may be required), July 2021

Supreme Court Set to Tackle Pleading Standard in Northwestern Retirement Plan Lawsuit

On July 2, 2021, the Supreme Court agreed to hear Hughes v. Northwestern, which involves a challenge to investment fees and recordkeeping fees in two 403b plans maintained by Northwestern University. The district court dismissed the complaint about failure to adequately plead a breach of the fiduciary duty of prudence, and the Seventh Circuit affirmed the dismissal. The Supreme Court will now weigh-in for the first time on the critical issue of what allegations are sufficient to state a plausible breach of fiduciary duty claim for excessive investment and recordkeeping fees.

Source: Groom.com, July 2021

Sweeping Excessive Fee Suit Targets Motor Club's 401k

An excessive fee suit filed by a litigator new to the ERISA space makes a series of new, sweeping allegations (including the plan's advisor and auditor) alongside some familiar challenges. The plaintiffs' arguments are extraordinarily detailed and tread ground(s) not often seen in these type of filings.

Source: Napa-net.org, July 2021

Court Affirms Arrangement Between Sponsor and Recordkeeper Not a Prohibited Transaction

The 10th U.S. Circuit Court of Appeals was asked to review a lower court's decision in Ramos v. Banner Health, in which participants in Banner Health's 401k plan alleged plan fiduciaries breached their duties under ERISA. Following an eight-day bench trial, the U.S. District Court for the District of Colorado concluded that Banner's uncapped, revenue-sharing agreement with its recordkeeper Fidelity did not constitute a prohibited transaction under ERISA.

Source: Planadviser.com, July 2021

SCOTUS Agrees to Hear ERISA "Excessive Fee" Case

The Supreme Court granted a petition for a writ of certiorari to review the Seventh Circuit's decision in Divane v. Northwestern University. Hughes is one of the numerous "excessive fees" class action cases that have come to dominate the ERISA fiduciary litigation landscape in recent years.

Source: Steptoe.com, July 2021

High Court Agrees to Review Northwestern University ERISA Suit

The U.S. Supreme Court has agreed to review the case of Hughes v. Northwestern University. The question before the high court is whether participants in a DC plan stated a plausible claim for relief against plan fiduciaries for breach of the duty of prudence by alleging that the fiduciaries caused the participants to pay investment management or administrative fees higher than those available for other materially identical investment products or services.

Source: Planadviser.com, July 2021

Arbitration of ERISA Retirement Plan Disputes

This 13-page practice note discusses the general enforceability of arbitration clauses in certain disputes, including class actions, with a particular focus upon the enforceability of arbitration clauses involving legal claims made under the Employee Retirement Income Security Act. It also specifically analyzes the advantages and disadvantages of arbitration provisions for retirement plan sponsors.

Source: Wagnerlawgroup.com, June 2021

Using Mandatory Arbitration to Avoid ERISA Class Actions

With the significant increase in fiduciary breach class actions, plan fiduciaries have added provisions, including mandatory arbitrations, to their contracts, to gain control of and rein in litigation. The burning question, however, is where do the courts stand on forcing ERISA plan participants to engage in arbitration.

Source: Cohenbuckmann.com, June 2021

Court Limits Fiduciary Breach Lawsuit to Claims Against Plan Sponsor and Plan Committee

It is not uncommon for fiduciary claims to be brought initially against every plausible party, including the plan sponsor's board and its members, and various individual employees. An interesting aspect of this case is the relative ease with which the court strips away the claims against individuals and the board in light of the plan sponsor's delegation of investment authority to the plan committee.

Source: Thomsonreuters.com, June 2021

Excessive Fee Lawsuits Expected to Continue to Rain Down on Plans

There have been approximately 200 "cookie-cutter" ERISA class-action lawsuits filed against retirement plans since 2015, including more than 90 cases filed in 2020 alone. With more "cookie-cutter" cases being filed, especially when the qualified default investment alternative is a "big ticket" target-date fund, there is no sign of these suits slowing down.

Source: Planadviser.com, June 2021

ERISA Excessive Fee Lawsuit Filed Against Generac Power Systems

Generac Power Systems and its board of directors have joined the list of recent targets of an ERISA excessive fee lawsuit. The complaint includes allegations similar to those in many suits filed over the past few years.

Source: Planadviser.com, June 2021

Eye on ERISA: A Chat With Groom Law's Litigation Chair

Groom principal and head of its litigation practice, Lars Golumbic, recently discussed ERISA litigation trends and how benefits law has evolved over the years in an interview with Law360. In the article, Golumbic shared his thoughts on several topics ranging from what issues he's keeping a close eye on to offering advice to future ERISA litigators.

Source: Groom.com, June 2021

CDI Corp. Agrees to $1.8M ERISA Lawsuit Settlement

The retirement plan in question in the suit is substantially smaller than many of those that have faced or settled similar lawsuits, and thus the size of the settlement is also reduced.

Source: Planadviser.com, June 2021

Wake Forest University Baptist Medical Center Sued Over 403b Plan Fees

Wake Forest University Baptist Medical Center, its board of directors, and its retirement benefits committee have been sued for allegedly failing to ensure the plan and its participants paid reasonable fees for investments and administration. The complaint alleges that many of the mutual funds in the Wake Forest Baptist Medical Center 403b Retirement Savings Plan were more expensive than comparable funds found in similarly sized plans, those with more than $1 billion in assets.

Source: Planadviser.com, June 2021

Khan v. PTC, Inc. -- Three Important Lessons From an Otherwise Unremarkable 401k Fee Case

The plaintiffs seek recovery against the plan's investment committee for breach of the fiduciary duties of prudence and loyalty and against PTC's board of directors for failing to adequately monitor the committee. A similar narrative might be found in any of the many dozens of such cases filed each year. Nevertheless, the case merits attention for three reasons.

Source: Mintz.com, June 2021

When 'Eating Your Own Cooking' Becomes Self-Dealing

One conclusion that can be drawn from the rash of self-dealing lawsuits filed in the retirement plan services industry is that providers must be just as diligent as their clients when it comes to prudently and loyally delivering workplace retirement benefits, perhaps even more so.

Source: Planadviser.com, June 2021

John Hancock Settles ERISA lawsuit for $14 Million

John Hancock Life Insurance Co. agreed to a $14 million settlement in a lawsuit filed by participants in a company 401k plan who alleged ERISA violations in the plan's management. Terms of the settlement were disclosed in a court filing in the U.S. District Court in Boston.

Source: Pionline.com, June 2021


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