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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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J.C. Penney Agrees to Settle 401k Suit

Abstract: Department-store chain J.C. Penney is poised to pay $4.5 million to settle allegations over company stock in the firm's 401k plan, following a district court judge's preliminary approval of the settlement.

Source: Investmentnews.com (registration may be required), February 2017

Oracle Corp. Faces Setback in 401k Fee Lawsuit

Abstract: Oracle Corp. got some bad news on Feb. 16 when a magistrate judge recommended that a proposed class action challenging the fees in its 401k plan move forward.

Source: Bna.com (registration may be required), February 2017

Allergan Stock Losses Spawn ERISA Class Action

Abstract: Allergan's connection to an alleged price-fixing scheme among generic drug makers spawned a proposed class action Feb. 14, with an Allergan employee claiming he lost retirement savings by investing in the company's stock.

Source: Bna.com (registration may be required), February 2017

T. Rowe Price Accused of Self-Dealing With 401k Plan

Abstract: T. Rowe Price Group Inc. is accused of profiting at the expense of its employees' retirement savings by offering, almost exclusively, in-house mutual funds in the company's $1.7 billion 401k plan.

Source: Bna.com (registration may be required), February 2017

TIAA Lawsuit Puts the Spotlight on 403(b) Participant Loans

Abstract: Participant loans from 401k plans have never been an employer favorite plan provision. Now participant loans from 403(b) plans have come into focus. It's in the form of a class action law suit recently filed by participants in the Was hington University 403(b) plan against TIAA. The Plaintiffs allege that TIAA violated several provisions of ERISA regarding the manner in which loans were administered.

Source: Retirementplanblog.com, February 2017

The Latest Trend in Excess Fee Litigation

Abstract: The newest wave of retirement plan lawsuits targets self-dealing in the sponsored plans of several big name financial firms. This latest trend proves that even industry professionals get lax with their procedures and fail to properly fulfill their fiduciary duties. However, Plan Sponsors can take simple, effective steps to prevent themselves from falling to the same fate.

Source: Ekonbenefits.com, February 2017

TIAA Loan Practices Questioned in Latest ERISA Lawsuit

Abstract: A participant who drew four loans from a retirement account over the years argues her provider inappropriately kept portions of interest payments that should have been credited back to her account.

Source: Planadviser.com, February 2017

Robo-Advisers Steer 401k Plan Litigation Trend

Abstract: Robo-advisers -- companies that provide digital financial advice -- are winning ground in the retirement plans industry, but with that growth comes some legal challenges.

Source: Bna.com (registration may be required), February 2017

Fee Litigation Update: Moving Beyond Allegations of Self-Dealing

Abstract: In 2016, we saw a considerable uptick in the number and variety of excessive fee lawsuits commenced against plan fiduciaries of defined contribution plans. Article looks at these filings, many of which have advanced novel theories of imprudence that are not dependent on allegations of self-dealing. The article also identifies affirmative steps that plan fiduciaries may take to prevent these types of claims from succeeding.

Source: Proskauer.com, January 2017

Aon Hewitt Sued Over Fee Scheme in Caterpillar's 401k Plan

Abstract: Aon Hewitt Financial Advisors is the latest retirement services company accused of violating ERISA by entering into a fee-sharing agreement with online investment adviser Financial Engines Inc.

Source: Bna.com (registration may be required), January 2017

Edward Jones' Self-Dealing Suit Permitted to Proceed

Abstract: Defendants unsuccessfully argued that the breach of fiduciary claims should be dismissed because they fulfilled their duties by offering an array of investment options.

Source: Planadviser.com, January 2017

Another Provider Charged With Self-Dealing in Its 401k Plan

Abstract: A new lawsuit challenges not only the use of allegedly more expensive proprietary funds, but with no longer offering a stable value fund, and of being negligent in its deployment of a self-directed brokerage account option. The suit, brought by plaintiff Christopher W. Severson, alleged that "the Schwab Fiduciary Defendants imprudently and disloyally larded the Plan with unnecessary, expensive and poorly performing investment products and services offered and managed by the Schwab."

Source: Napa-net.org, January 2017

JPMorgan Sued for Self-dealing in Its 401k Plan

Abstract: JPMorgan has been sued by a participant in its 401k plan for allegedly causing employees to pay millions of dollars in excessive fees through a scheme motivated by "self-interest." The plaintiff claims JPMorgan, as well as various board and committee members, breached their fiduciary duties by, among other things, retaining proprietary mutual funds from the bank and affiliate companies for several years, despite the availability of nearly identical, lower-cost and better-performing funds.

Source: Investmentnews.com (registration may be required), January 2017

Franklin Resources Can't Get 401k Fee Lawsuit Dismissed

Abstract: Franklin Resources lost its bid for quick dismissal of a lawsuit claiming that it stuffed its workers' 401k plan with in-house mutual funds that carried excessive fees and performed worse than competitors' funds.

Source: Bna.com (registration may be required), January 2017

How to Make Your 401k or 403(b) Plan a Litigation Target

Abstract: Sometimes it seems as if these defendant fiduciaries were almost asking to be sued, since the practices being described in the complaints are so vulnerable to challenge. These lawsuits keep proliferating, so fiduciaries of 401k and 403(b) plans would be well advised to learn from what the defendants were alleged to have been doing wrong.

Source: Cohenbuckmann.com, January 2017

Hospital Target in 403(b) Lawsuit Starts Off the Year

Abstract: Plan participants of Eseentia Health in Minnesota filed a class action lawsuit against the 403(b) plan sponsor claiming that the organization paid excessive fees to their recordkeepers. Experts are predicting an increasing number of lawsuits, especially against 403(b) plans which many consider low hanging fruit.

Source: 401ktv.com, January 2017

J.C. Penney Agrees to Pay $4.5 Million to Settle 401k Suit

Abstract: Department-store chain J.C. Penney is poised to pay $4.5 million to settle allegations over company stock in the firm's 401(k) plan, following a district court judge's preliminary approval of the settlement.

Source: Investmentnews.com (registration may be required), January 2017

Recordkeeping Fees Trigger Latest Excessive Fee Suit

Abstract: A new excessive fee lawsuit claims that plan fiduciaries caused plans to "pay excessive fees" and failed to "monitor and control the Plans' escalating costs," resulting in millions of dollars of losses to the plans, and this time share classes are not the issue.

Source: Ntsa-net.org, January 2017

Outlook for 2017 Retirement Plan Litigation

Abstract: Copycat lawsuits targeting 403(b) plans, as well as litigation probing a fiduciary's duty to monitor investments, the DOL fiduciary rule, church retirement plans and cybersecurity issues are likely to crop up this year.

Source: Investmentnews.com (registration may be required), December 2016

Prudential Cleared in 401k Pay-to-Play Lawsuits

Abstract: Prudential Retirement defeated a pair of lawsuits accusing it of operating a "pay-to-play" scheme for the mutual funds offered through the 401(k) plans it services.

Source: Bna.com (registration may be required), December 2016

Process Remains Critical Factor in ERISA 401k Plan Litigation

Abstract: A recent decision by the Northern District of California provides a welcome counterpoint in the fact that a detailed complaint has been filed alleging various breaches of the duty of loyalty and duty of prudence does not mean that there was any breach of fiduciary duty whatsoever.

Source: Wagnerlawgroup.com, December 2016

Hotel Giant Starwood Hit With 401k Fee Class Action

Abstract: Starwood Hotels & Resorts Worldwide is the latest company accused of breaching its fiduciary duties by layering up its 401k plan with high-priced, poorly performing investment options.

Source: Bna.com (registration may be required), December 2016

Delta Air Lines Latest Company Hit With 401k Class Action

Abstract: Delta Air Lines is accused in a new lawsuit of selecting high-priced, poorly performing and duplicative investment options in the company's 401k plan despite the availability of less-expensive alternatives.

Source: Bna.com (registration may be required), December 2016

D.C. Court of Appeals Denies Emergency Request to Halt Conflict of Interest Rule

Abstract: The U.S. Court of Appeals for the District of Columbia Circuit denied the emergency request from the National Association for Fixed Annuities for an injunction blocking the implementation of the Department of Labor's conflict of interest rule and related exemptions.

Source: Erisapracticecenter.com, December 2016

DOL Files Lawsuit to Appoint Independent Fiduciary to Administer 401k

Abstract: The department is seeking the removals of Hidebumi Minagawa as plan administrator and trustee, and of Hailu Solomon as trustee, and the appointment of an independent or successor fiduciary with discretionary authority to administer the plan in order to effectuate its termination and the distribution of the plan's remaining assets.

Source: Dol.gov, December 2016

Fidelity, Putnam 401k Investors Get Class Treatment

Abstract: A pair of lawsuits accusing Fidelity Management Trust Co. and Putnam Investments LLC of 401k mismanagement were certified as class actions.

Source: Bna.com (registration may be required), December 2016

Edison Workers' 401k Fee Challenge Revived by Ninth Circuit

Abstract: Edison International workers convinced an appeals court to revive their claim accusing the company of breaching its ERISA fiduciary duties by failing to monitor allegedly high fees charged in the company's 401k plan.

Source: Bna.com (registration may be required), December 2016

A Guide to Avoiding 401k Litigation

Abstract: As the pool of large plans diminishes and the litigation theories become well-known, it is inevitable that the volume of 401k litigation will expand. Fortunately, most plan sponsors can avoid 401k litigation by taking a few obvious steps. Here are some suggestions.

Source: Greensfelder.com, December 2016

DOL Sues Company for Abandoning 401k Plan After Ceasing Operations

Abstract: The complaint seeks the removal of Authorized Factory Service as the plan fiduciary, and the appointment of an independent fiduciary to administer the plan in order to effectuate the termination of the plan and the distribution of plan assets to all affected participants and beneficiaries.

Source: Dol.gov, December 2016

DOL Sues Defunct Company to Restore Unremitted Participant Contributions to 401k

Abstract: The lawsuit seeks to require each of the fiduciary defendants, the company, and plan trustee to jointly restore all losses caused to the plan by their fiduciary breaches.

Source: Dol.gov, December 2016

Financial Engines a Litigation Target?

Abstract: A handful of recent lawsuits have named, but not charged, Financial Engines in alleged "pay-to-play" arrangements with providers. That could be getting ready to change.

Source: Napa-net.org, December 2016

Wave of Lawsuits Strikes Retirement Plan Sponsors

Abstract: A significant number of lawsuits have been filed against retirement plan sponsors for failing to properly administer their plans and subsequently violating ERISA regulations. Although lawsuits like these were once seen as taboo, they have recently shed light on plan mismanagement and also exposed plan sponsors to a lot of risk.

Source: Dgccpa.com, December 2016

ERISA Stock Drop Suit Filed Against Exxon Mobil

Abstract: Misrepresentations regarding climate change caused Exxon Mobil's stock price to be artificially inflated, the compliant says.

Source: Planadviser.com, December 2016

Voya Facing Lawsuit Over Stable Value Funds

Abstract: A 403(b) plan participant is claiming that Voya set crediting rates for stable value funds lower than rates of return in order to make a profit.

Source: Planadviser.com, December 2016

401k Plan Fee Litigation Update

Abstract: The wave of fee litigation is ongoing and has significantly increased the responsibility of 401k plan fiduciaries to follow well documented, prudent processes to monitor 401k plan fees and expenses. This article reviews the litigation trends and then provides some observations and take-aways.

Source: Milesstockbridge.com, December 2016

Wells Fargo Hit With Class Action Over Target-Date Funds

Abstract: Wells Fargo enriched itself at its employees' expense by including costly, in-house target date funds in its 401k plan, a new class action complaint alleges.

Source: Bna.com (registration may be required), November 2016

Stock Drop Lawsuit Did Not Satisfy Dudenhoeffer Pleading Standard

Abstract: In this appeal, the Fifth Circuit reversed, ruling that the amended pleadings did not plausibly allege alternative actions as required by the Supreme Court. The court found that it was not reasonable to say that a prudent fiduciary at that time could not have concluded that disclosure of nonpublic information or freezing employer stock trades -- both of which would likely lower the stock price -- would do more harm than good.

Source: Thomsonreuters.com, November 2016

FMC Sued Over 401k Stake in Sequoia Fund, Valeant

Abstract: FMC Corp. is accused in a new lawsuit of mishandling workers' retirement savings by allowing more than $40 million in 401k assets to be invested in the Sequoia Fund and the stock of controversial drugmaker Valeant Pharmaceuticals.

Source: Pionline.com (registration may be required), November 2016

Disney Fiduciaries Beat Lawsuit Over Valeant Stock in 401k Plan

Abstract: Fiduciaries of Walt Disney Co.'s 401k plan convinced a federal judge in California to toss out a proposed class action challenging their decision to allow participants to invest their plan assets in the Sequoia Fund and Valeant Pharmaceuticals' stock.

Source: Bna.com (registration may be required), November 2016

This Is Why You Monitor Your Recordkeeper

Abstract: Unlike many of the excessive fee lawsuits that we have seen over the past few years, a new suit has been filed against the recordkeeper, rather than against the plan sponsor or retirement plan committee. The complaint alleges that Xerox (the recordkeeper for the three Ford plans), as a precondition to making Financial Engines' investment advice tools available on their platform, required FE to overcharge participants and pay Xerox a "kick back" from the fees charged for providing investment advice.

Source: Pension-Consultants.com, November 2016

The University Fee Cases - Product of the Past, Possible Wave of the Future

Abstract: The suits resemble the dozens of "excessive fee" class actions against 401k plan sponsors and fiduciaries in recent years. But they are novel in many respects, especially because their targets, the fiduciaries of 403(b) retirement plans, have not been the focus of much ERISA fiduciary breach litigation until now. The new cases will test the essential structure of such plans and will determine whether fiduciary standards developing in 401k matters should be applied in the same manner in the 403(b) context.

Source: Groom.com, November 2016

Edward Jones Hit With Second ERISA Lawsuit Over 401k Fees

Abstract: Edward D. Jones & Co. breached its fiduciary duties to employees in its 401k plan by including mutual fund investments from business partners and affiliates that charged higher fees than competitors, a new lawsuit alleges.

Source: Bna.com (registration may be required), November 2016

Revenue Sharing in Managed Accounts Targeted by Class Action Law Firm

Abstract: Managed accounts within DC plans continue to be targeted by class action law firms with the latest filed by Schneider Wallace on behalf of three participants in the $14 billion Ford Motor Company plan against their recordkeeper Xerox HR Solutions.

Source: 401ktv.com, November 2016

Plan Administrator Pays for Failure to Furnish Documents

Abstract: After ruling that a 401k plan administrator violated ERISA when it failed to furnish a custodial agreement and other documents requested by a plan participant, a trial court has imposed penalties totaling $15,959.

Source: Thomsonreuters.com, November 2016

Should Your ERISA Plan Have a Forum Selection Clause?

Abstract: With relatively few exceptions, administrators of employee benefit plans covered by ERISA have enjoyed success enforcing forum selection clauses in cases across the country. As such, employers should consider implementing a forum selection clause in their plans.

Source: Bradley.com, November 2016

A Potential Impact of the 403(b) University Lawsuits on 401k Self-Directed Brokerage Accounts

Abstract: 403(b) plans, with their wide variety of investments which are subject only to the control of the participants, are essentially structured in the same manner as SBDAs in 401k plans. Should the plaintiffs succeed in their claims that it was imprudent to permit employees the ability to invest in a wide range of securities without fiduciary oversight, it may well be the death knell of SBDAs.

Source: Businessofbenefits.com, November 2016

Owner/Trustee of 401k Plan Accused of Having Eyes Wide Shut on Fiduciary Duties

Abstract: A class action complaint was recently filed against the owner of the Emerald Coast Eye Institute. The two plaintiffs allege that they were terminated because of complaining to the owner and Plan Trustee about breaches of fiduciary duty with respect to the 401k Plan resulting in losses and damages over $1 million.

Source: Benefitsnotes.com, October 2016

These Top Law Firms Got the Most ERISA Class Action Biz

Abstract: The latest wave in ERISA class action litigation has seen more than 100 lawsuits brought against a wide range of entities, including financial institutions, universities, religiously affiliated organizations and multinational companies. With this uptick in litigation, it looks like employers are relying more on a small pool of big law and boutique firms to represent their interests.

Source: Bna.com (registration may be required), October 2016

Deutsche Bank Can't Shake 401k Fee Lawsuit

Abstract: A lawsuit accusing Deutsche Bank of stuffing its 401k plan with high-fee, in-house funds is moving forward after a federal judge largely denied the banking giant's motion to dismiss.

Source: Bna.com (registration may be required), October 2016

What the 403(b) Excessive Fee Lawsuits Do Not Consider

Abstract: Numerous lawsuits have been filed against large universities over alleged excessive investment and recordkeeping fees for their 403(b) plans. These lawsuits are in many ways clones of 401k lawsuits, but they completely disregarding some of the distinctions between the two plan types.

Source: Plansponsor.com, October 2016

DOL Obtains Order to Remove Fiduciary From $2.2mm Employee Savings Plan and Trust

Abstract: The DOL filed a complaint against Horizon NR LLC and Lance Sogan in Ashland, Kentucky. Sogan, the alleged fiduciary to the Horizon NR LLC Employee Savings Plan and Trust, waived his response to the complaint and entered into a consent order and judgment with the court.

Source: Dol.gov, October 2016

DOL Sues Baltimore-Based Architect to Recover $56k for 401k Plan Participants

Abstract: An investigation by the DOL led the Secretary of Labor to file a complaint which alleges the defendants failed to remit $56,065.27 in employee 401k contributions beginning on July 28, 2009.

Source: Dol.gov, October 2016

Neuberger Berman Fights Back Against 401k Lawsuit

Abstract: Some large employers are facing lawsuits over the funds they offer to employees in their retirement programs, and a handful of employers have chosen to settle the claims. Neuberger Berman is not one of them.

Source: Institutionalinvestor.com, October 2016

Wells Fargo Cross-Selling Scandal Spawns ERISA Class Action

Abstract: Wells Fargo's month-long struggles continued Oct. 7th when a participant in the company's 401k plan filed a proposed class action challenging a 12 percent drop in the company's stock price following recent revelations of an illegal cross-selling scheme.

Source: Bna.com (registration may be required), October 2016

SunTrust Executives Avoid ERISA Stock-Drop Lawsuit

Abstract: SunTrust Banks' directors and general counsel dodged allegations that they breached their ERISA fiduciary duties by offering poorly performing company stock as an investment option in the bank's 401k plan.

Source: Bna.com (registration may be required), October 2016

401k Suit Survives Anti-Alienation Challenge

Abstract: Stock drop lawsuits are generally about employer stock that has suffered a precipitous drop in value, and in rare cases, where participants have been deprived from keeping that investment, and then there's this one.

Source: Asppa.org, October 2016

403(b) Lawsuits, Fees vs. Value

Abstract: The drumbeat of lawsuits against large 403(b) and qualified plan sponsors continues. The author of this article discusses the lawsuits against large 403(b) and qualified plan sponsors and what they entail.

Source: Ntsa-net.org, October 2016

401k Accused of Investing in "Patent Troll"

Abstract: A Florida optometry practice is the latest small employer to be sued for 401k mismanagement, with a newly filed lawsuit accusing the practice of over-investing in alleged "patent troll" VirnetX.

Source: Bna.com (registration may be required), October 2016

Sanofi Avoids ERISA Challenge to Stock Losses in Its 401k Plan

Abstract: Sanofi-Aventis U.S. LLC is the latest company to dodge a lawsuit accusing it of breaching its ERISA fiduciary duties by allowing participants in its 401k plan to continue investing in company stock despite knowing its value was artificially inflated.

Source: Bna.com (registration may be required), October 2016

BICs Litigation Provisions Trigger Another DOL Suit

Abstract: A new lawsuit has been filed challenging the Department of Labor's fiduciary regulation's interference with existing arbitration structures.

Source: Asppa.org, October 2016

Stock Drop Plaintiffs in the Fifth Circuit Fail to Meet the High Pleading Standard of Dudenhoeffer and Amgen

Abstract: In Whitley v. BP, the US Court of Appeals for the Fifth Circuit held that retirement plan participants did not state a plausible stock drop claim under the pleading standards established by the US Supreme Court's Fifth Third Bancorp v. Dudenhoeffer decision.

Source: Practicallaw.com, October 2016

DOL Files Complaint to Recover More Than $29K in Losses to 401k

Abstract: The DOL found that the company retained approximately $29,058 of contributions in the company's corporate bank account and used them for general operating expenses, in violation of ERISA.

Source: Dol.gov, September 2016

DOL Comes Up Short in Battle Against Forum Selection Clauses

Abstract: The DOL struck out once again in its ongoing effort to stop employers from forcing lawsuits over workers' benefits into the employer's preferred court.

Source: Bna.com (registration may be required), September 2016

Thrivent Financial Challenges DOL Fiduciary Rule

Abstract: Thrivent Financial for Lutherans is accusing the DOL of exceeding its statutory authority by attempting, with its new fiduciary rule, to force all disputes into federal court rather than allowing for alternative dispute resolution methods.

Source: Bna.com (registration may be required), September 2016

RadioShack Joins BP, Whole Foods in Beating Stock Lawsuits

Abstract: RadioShack Corp. is the third major company in less than a week to defeat a lawsuit by employees claiming they lost retirement savings because their employer allowed them to invest in poorly performing company stock.

Source: Bna.com (registration may be required), September 2016

Chart of 401k Fee Litigation - September 2016

Abstract: Nearly forty lawsuits have been commenced relating to 401k plan fees. These include lawsuits against the plan sponsors and 401k plan service providers. This is an updated chart of current litigation.

Source: Groom.com, September 2016

Updated Chart of ERISA Issues Related to "In-House" Plan Use of Proprietary Products

Abstract: Like other employers, financial institutions sponsor ERISA-covered retirement and welfare plans for their employees. Often, the "in-house" benefit plans of a financial institution invest plan assets in mutual funds or other investment products that are managed by the financial institution or an affiliate. The practice has spun a number of lawsuits. This chart identifies the lawsuits that have been filed to date, describes the claims that have been asserted in the lawsuits, and summarizes the substantive court rulings and the procedural status of the cases.

Source: Groom.com, September 2016

University 403(b) Plan Litigation Update

Abstract: Until recently, the fiduciaries of 403(b) plans have generally not been the target of ERISA excessive fee litigation, which has principally focused on the corporate sponsors of 401(k) plans. That changed abruptly this August, when within a matter of days twelve class action lawsuits were filed in multiple U.S. district courts against private universities claiming they had breached ERISA fiduciary duties owed to participants in their retirement plans. Chart summarizes current university litigation.

Source: Groom.com, September 2016

DOL Sues Company to Restore $166k to 401k Plan

Abstract: The DOL found the company violated the Employee Retirement Income Security Act in several instances. Investigators determined from April 27, 2012, through Dec. 26, 2014, the company withheld employees' pay but then failed to remit employee contributions and employee loan repayments to the plan.

Source: Dol.gov, September 2016

AIG Retirement Plans Get Slice of $725M Securities Settlement

Abstract: Four American International Group Inc. retirement plans can share in a $725 million securities settlement between AIG and its investors, the U.S. Court of Appeals for the Second Circuit ruled.

Source: Bna.com (registration may be required), September 2016

Labor Secretary Questions Fiduciary Fulfillment in Reynolds Retirement Case

Abstract: The U.S. Labor Secretary has questioned whether the RJR Pension Investment committee fulfilled its fiduciary duties in a case involving its retirement plans. Secretary Thomas Lopez filed an amicus brief Sept. 9 in the Fourth District of the U.S. Appeals Court. The case involves plaintiff Richard Tatum, R.J. Reynolds Tobacco Holdings Inc. through its former affiliation with Nabisco, and potentially 3,549 current and former employees.

Source: Journalnow.com, September 2016

ERISA 403(b) Lawsuits: Are Hospital Plans Sick and University Plans Dumb?

Abstract: Regulatory changes enacted in the past decade have resulted in many more 403(b) plans becoming ERISA plans and the impact of the ERISA fiduciary requirements is now being felt. The two core fiduciary duties under ERISA are prudent investigation and always placing the interest of the participant first. It is apparent that many of these plans, including some very large plans, were unaware of these fiduciary duties. The result of that is increased litigation with more than a dozen lawsuits being filed just this year.

Source: Unifiedtrust.com, September 2016

Is Your 401k Plan Income "Floating" Away? New Lawsuit Challenges Fidelity's Practices

Abstract: A recent class action suit filed against Fidelity and two plan sponsors, United Airlines and Hewlett-Packard, claims that the income on "float" accounts should have been credited for the benefit of the plans and that Fidelity committed fiduciary breaches by keeping the float. The suit also names the plan fiduciaries for allowing Fidelity to engage in these practices, which plaintiffs contend are prohibited transactions.

Source: Cohenbuckmann.com, September 2016

Northrop Grumman Drained Retirement Savings, Workers Allege

Abstract: Northrop Grumman Corp. and its executives forced employees to pay nearly $10 million in excessive and largely unnecessary retirement plan fees that went directly to the defense contractor in violation of federal law, a new lawsuit alleges.

Source: Bna.com (registration may be required), September 2016

Voya Accused of Layering 401ks With Unnecessary Fees

Abstract: A new lawsuit accuses Voya Financial Inc. of creating a system for retirement investors to receive investment advice that allowed the company to skim undeserved fees from investors' accounts in violation of federal law.

Source: Bna.com (registration may be required), September 2016

Newest 401k Fee Suit Challenges Admin, RK, Investment Fees

Abstract: Another major employer has been charged in an excessive fee lawsuit that not only contests the fees paid by the plan, but administrative fees paid by the plan to the plan sponsor as well. The suit claims that Northrop Grumman employees were "motivated to, and did, charge time and expenses to the Plan which were impermissible in nature, unreasonable, and unnecessary."

Source: Asppa.org, September 2016

Federal District Court Enforces Forum Selection Clause Contained in ERISA Plan

Abstract: A federal district court in the Eastern District of Pennsylvania transferred an ERISA lawsuit against Caterpillar Inc. to the Northern District of Illinois after finding the forum selection clause contained in the governing plan was valid and enforceable.

Source: Erisapracticecenter.com, September 2016

IBM Defeats Twin Challenges to Stock Drop

Abstract: IBM and its executives won dismissal of lawsuits claiming that a 17 percent drop in the company's stock price implicated federal securities laws and caused workers to lose retirement savings in violation of ERISA.

Source: Bna.com (registration may be required), September 2016

Score One for 401k Fiduciaries - Excessive Fee Suit Against Chevron Dismissed

Abstract: We have finally had some good news for embattled fiduciaries. A few days ago, the fiduciaries of the Chevron 401k Plan succeeded in getting an excessive fee complaint dismissed-at least for the time being-because it contained conclusions rather than facts sufficient to infer that the fiduciaries had breached their fiduciary duties.

Source: Cohenbuckmann.com, September 2016

Chevron Defeats Lawsuit Challenging 401k Fees, Funds

Abstract: Chevron Corp. convinced a federal judge to dismiss class action claims challenging the fees and investment options associated with its 401k plan.

Source: Bna.com (registration may be required), September 2016

Impact of New Fiduciary Rules on an Excess Fee Lawsuit

Abstract: The drumbeat of new lawsuits against 401k plans, their sponsors, and investment and service providers continues. This 2-page article discusses how these suits may fare under current regulatory guidance and under the DOL's new fiduciary rule once it goes into effect.

Source: Wagnerlawgroup.com, August 2016

Chevron Wins Dismissal of Claims of Poor Savings Plan Oversight

Abstract: A U.S. judge has dismissed a lawsuit by Chevron Corp workers who said the oil company breached its fiduciary duties by putting costly and poorly performing investment options in an employee 401k savings plan.

Source: Reuters.com, August 2016

First Citizens Can't Dodge ERISA Suit Challenging Stock Drop

Abstract: A Georgia bank formerly known as First Citizens Bankshares Inc. must defend claims that it failed to investigate whether its employees should continue investing retirement savings in company stock that declined from $340 to $29 per share.

Source: Bna.com (registration may be required), August 2016

Safeway, Great-West Sued Over JP Morgan Funds in 401k Plan

Abstract: Safeway and Great-West Financial face a lawsuit accusing them of breaching their ERISA fiduciary duties by allegedly selecting JP Morgan's high-fee target-date funds as investment options for the supermarket chain's 401k plan.

Source: Bna.com (registration may be required), August 2016

What the 403(b) Excessive Fee Lawsuits Do Not Consider

Abstract: In the past two weeks, eight lawsuits have been filed against large universities concerning excessive investment and recordkeeping fees for their 403(b) plans. Attorneys point out distinctions between 403(b)s and 401ks, and lessons 403(b) plan sponsors can learn from these recent lawsuits.

Source: Plansponsor.com, August 2016

DOL Complaint Alleges Fiduciary Failures by Adviser

Abstract: A complaint filed in a Pennsylvania district court by the DOL's Employee Benefits Security Administration alleges a list of ERISA infractions related to fees, documents, disclosures and processes by a 3(21) fiduciary firm.

Source: Planadviser.com, August 2016

401k Fee Litigation Finds New Targets

Abstract: More and more lawsuits are being filed to challenge plan fees and investments. Plaintiffs are asking the courts to make new law in this area. This article provides a summary of the targets and theories in the new lawsuits.

Source: Benefitnews.com, August 2016

Fidelity, HP, United Airlines Sued Over 401k Float Practice

Abstract: HP, United Airlines, and Fidelity were hit with an ERISA class action by 401k plan participants challenging Fidelity's practice of allegedly diverting billions of dollars of plan assets for its own benefit.

Source: Bna.com (registration may be required), August 2016

Edward Jones the Latest 401k Litigation Target

Abstract: Another broker/dealer has been accused of larding its 401k plan menu with investment options from mutual fund families that paid hundreds of millions of dollars to the firm, despite what are alleged to be "high fees, poor performance prospects, and availability of better-performing, lower-cost alternatives."

Source: Napa-net.org, August 2016

Lawsuit Accuses Morgan Stanley of Self-Dealing in 401k

Abstract: A participant in Morgan Stanley's 401k plan has filed a lawsuit on behalf of approximately 60,000 current and former plan participants alleging the plan included investment options with excessive fees and used Morgan Stanley proprietary funds rather than other funds that would be better and cheaper for participants.

Source: Planadviser.com, August 2016

Emory Added to List of Colleges Sued Over Retirement Plan Fees

Abstract: Emory University is the latest university to be sued over alleged fiduciary breaches in the management of its DC plans. The lawsuit alleges a breach of fiduciary duties by causing participants in their 403(b) plans to pay excessive recordkeeping, administrative and investment management fees, and by retaining high-cost and poor-performing investment options.

Source: Myajc.com, August 2016

U.S. Employers Targeted by Lawsuits Claiming Excessive Fees in Retirement Plans: Could It Happen in Canada?

Abstract: Legal risks have been emphasized by several lawsuits filed against U.S. employers in the last few months. This article provides a brief update on litigation activity in the U.S. which should give pause to Canadian employers who sponsor capital accumulation plans for their employees.

Source: Employmentandlabour.com, August 2016

Franklin Templeton 401k Participants File Suit for Alleged Breach of Fiduciary Duties

Abstract: A lawsuit was filed against Franklin Resources, Inc.in the U.S. District Court for the Northern District of California. The complaint is brought on behalf of the Franklin Templeton 401k Plan for alleged breach of fiduciary duties by Franklin Resources and Franklin Templeton 401k Retirement Plan Investment Committee.

Source: Businesswire.com, August 2016

ERISA Class Actions Filed Against Higher Education Institutions

Abstract: Several ERISA breach of fiduciary duty class actions involving allegedly excessive retirement plan fees were filed this week against higher education institutions including colleges, universities, and medical schools. The plaintiffs in these cases primarily are current and former participants in section 403(b) retirement plans. These cases allege that plan fiduciaries made unreasonable and imprudent decisions that negatively affect the value of the plaintiff's retirement accounts.

Source: Ballardspahr.com, August 2016

Duke Latest School Snared by Coordinated ERISA Lawsuits

Abstract: Schlichter Bogard & Denton's coordinated attack on the retirement plans of prominent universities hit another school when the firm filed an ERISA class action against Duke University.

Source: Bna.com (registration may be required), August 2016

Three Prominent Universities Sued Over 403(b) Plan Fees

Abstract: Three prominent universities were sued on Tuesday, accused of allowing their employees to be charged excessive fees on their retirement savings. The universities -- the Massachusetts Institute of Technology, New York University and Yale -- each have retirement plans holding more than $3 billion in assets and are being individually sued by a number of their employees in cases seeking class-action status.

Source: Nytimes.com, August 2016

Excessive Fee Litigation Hits Education Sector

Abstract: The law firm of Schlichter, Bogard & Denton has now turned its attention to the education sector, filing separate class action lawsuits against three universities on behalf of over 60,000 employees in their defined contribution retirement plans, both 401k and 403(b).

Source: Ntsa-net.org, August 2016

Allianz Can't Duck ERISA Challenge to Mutual Fund Fees

Abstract: Allianz Asset Management of America couldn't convince a federal judge to dismiss class action claims challenging the allegedly high-fee, in-house mutual funds in its 401k plan.

Source: Bna.com (registration may be required), August 2016

Novant 401k Settlement Expected to Top $100 Million

Abstract: Current and former Novant Health employees will benefit from three times the original financial settlement value from a class-action lawsuit targeting the system's defined compensation retirement plan.

Source: Journalnow.com, August 2016

Edison 401k Case Will Be Reheard by Ninth Circuit

Abstract: The nine-year legal battle over fees and investments in Edison International Inc.'s 401k plan is headed for review by a full panel of appellate court judges.

Source: Bna.com (registration may be required), August 2016

Neuberger Berman Sued for Excessive 401k Fees

Abstract: Neuberger Berman, an investment manager with $246 billion in assets under management, has been sued by a participant in the company's 401k plan for alleged self-dealing, whereby the firm offered a high-fee, poorly performing proprietary fund in the plan for its own profit.

Source: Investmentnews.com (registration may be required), August 2016

Franklin Templeton Sued by Employees for Self-Dealing in 401k plan

Abstract: Franklin Resources has been sued for self-dealing in its own 401k, joining a growing list of similarly situated companies targeted by their employees for excessive retirement plan fees.

Source: Investmentnews.com (registration may be required), August 2016

Retirement Plan Can Mandate Arbitration, Cost-Sharing

Abstract: A federal judge upheld a provision in ETS's retirement plan requiring that claims over plan benefits be submitted to a binding arbitration process in which the claimant and the plan "equally share" in the arbitration costs.

Source: Bna.com (registration may be required), August 2016

District Court Finds Forum Selection Clause Unenforceable in ERISA Action

Abstract: A federal district court in Illinois ruled that a plan's forum selection was unenforceable because it conflicts with ERISA's public policy of providing plaintiffs "ready access to the Federal courts."

Source: Erisapracticecenter.com, August 2016

Fidelity Prevails in ERISA Float Litigation

Abstract: The First Circuit joined the Eighth Circuit in finding that Fidelity's practice of earning overnight "float" interest on the cash paid out to 401k plan participants redeeming shares in mutual funds did not violate ERISA's duty of loyalty or prohibition on self-dealing.

Source: Natlawreview.com, July 2016

Forum Selection Provisions in ERISA Plans

Abstract: In recent years, in addition to substantive changes to 401k plans to increase both the level of participation and the level of contributions, there has been an increased focus on the procedural aspects. The subject of this article is mandatory forum selection clauses, which limit plaintiffs to only one of the three permissible federal venues for ERISA causes of action. Article discusses in detail how courts are divided on the issue of the enforceability of forum selection clauses in ERISA plans.

Source: Wagnerlawgroup.com, July 2016

401k Plans Still in the Crosshairs: New Cases Challenge Plan Fees

Abstract: Now that many of the cases contending that large 401k plans paid fees that were too high have been settled or decided, it would be tempting for sponsors of plans that haven't been sued to breathe a sigh of relief. They should not do so, because litigation continues unabated with new theories and new targets.

Source: Cohenbuckmann.com, July 2016

Avon to Pay $6 Million to Settle Stock Drop Suit

Abstract: The U.S. District Court for the Southern District of New York has preliminarily approved a settlement between Avon Products and participants in its DC retirement plan. The settlement calls for Avon to pay $6.250 million to be placed in a settlement fund. A net settlement fund of approximately $4.345 million will be divided among eligible class members.

Source: Planadviser.com, July 2016

New York Life Accused of Profiting Off Workers' 401ks

Abstract: New York Life Insurance Co. has been sued by employees who claim that one of the company's in-house mutual funds carried needlessly high fees that eroded their retirement savings.

Source: Bna.com (registration may be required), July 2016

Cetera, Plan Sponsor Sued for Excessive Fees

Abstract: For the second time in two months, a small 401k plan is at the center of a lawsuit alleging excessive plan fees. The plan adviser, Cetera Advisor Networks, has been named as a co-defendant in a move experts call a twist of sorts from other 401k litigation.

Source: Investmentnews.com (registration may be required), July 2016

First Circuit Holds "Float" Is Not a Plan Asset

Abstract: In In re: Fidelity ERISA Float Litigation, No. 15-1445 (1st Cir., July 13, 2016), the plaintiffs alleged that Fidelity breached its fiduciary duties because it used float to earn interest for itself, and not to benefit the plan. The district court dismissed the complaint on the defendants' motion to dismiss. The First Circuit, in a decision former Supreme Court Justice Souter wrote as he sat by designation, upheld the dismissal.

Source: Dbr.com, July 2016

Lawyers Ready to Swoop Down on 401k Vultures

Abstract: In a lawsuit filed in San Jose federal court, the attorneys alleged a cornucopia of fiduciary breaches tied to excessive fees, recordkeeping, and the components of the company's target-date funds. The case, and several like it in the past year, may be harbingers of a new cycle of 401k-gone-bad litigation, this time targeting ever smaller plans.

Source: Detroitnews.com, July 2016

Excessive-Fee Suit Targets Checksmart's $25M 401k Plan

Abstract: A participant in Checksmart Financial LLC's 401k plan sued the loan servicing company for allegedly breaching its ERISA fiduciary duties by allowing excessive administrative fees and imprudent investment options in the company's plan.

Source: Bna.com (registration may be required), July 2016

Fidelity Win Highlights Ways Companies Profit From 401ks

Abstract: Fidelity Management Trust Co. and other financial institutions that use creative ways to make money off employee benefit plans have found an increasingly loyal ally in the U.S. Court of Appeals for the First Circuit.

Source: Bna.com (registration may be required), July 2016

Legal Implications of 2016 Trends in the Advisor Community

Abstract: From a legal perspective, what is likely to be coming down the pike for plan advisors? David N. Levine, a principal with the Groom Law Group, sees four business trends with potential legal compliance impacts on advisors.

Source: Napa-net.org, July 2016

Court Finds Nothing Wrong With Fidelity's Use of Float Income

Abstract: The 1st U.S. Circuit Court of Appeals has ruled that "float income" Fidelity retained in the process of making distributions to retirement plan participants is not a plan asset, so Fidelity did not violate its fiduciary duties under ERISA.

Source: Planadviser.com, July 2016

401k Participant Sues Target Over Company Stock

Abstract: Recognizing the new pleading standards set forth in Fifth Third v. Dudenhoeffer, the lawsuit suggests alternative actions plan fiduciaries could have taken rather than continuing to allow investments in company stock.

Source: Planadviser.com, July 2016

Edison Executives Beat ERISA Challenge to Stock Losses

Abstract: Two Edison International Inc. executives convinced a federal judge to dismiss a lawsuit attacking their decision to offer workers Edison stock in the company's 401k plan.

Source: Bna.com (registration may be required), July 2016

Target-Date Twist in Latest 401k Fee Lawsuit

Abstract: In a departure from similar ERISA class action suits filed previously, the complaint says that the fiduciaries breached their duties by imprudently designing and implementing the plan's target-date funds.

Source: 401kspecialistmag.com, July 2016

Delta Employees Sue Fidelity for 'Illegal Kickbacks' From Financial Engines

Abstract: In an ERISA lawsuit that even has attorneys scratching their heads, employees of Delta Air Lines are suing Fidelity for breaching its fiduciary duty in accounts in which it has farmed out the fiduciary portion of the service bundle. The case may turn on whether Fidelity, by acting as recordkeeper and administrator, qualifies as a fiduciary and therefore breached its duty as it accepted Financial Engines' advice fees.

Source: Riabiz.com, July 2016

Disney Retirement Plan Committee Sued Over Sequoia Investments

Abstract: A former Orlando-based Walt Disney Co. employee has sued the committee that deals with workers' retirement plans, saying it made unwise investment decisions. Specifically, the federal lawsuit targets the Disney committee over its investment in the Sequoia Fund, which lost $2 billion after one of its biggest stocks tanked.

Source: Orlandosentinel.com, July 2016

ERISA Litigation Continues a Plaintiff-Friendly Trend

Abstract: An unmistakable trend in the world of employee benefit plan litigation is underway, and that trend is decidedly in favor of plaintiffs. The trend has manifested itself in several ways. Employee benefit plan sponsors, their owners and risk managers, should take note of these trends, which show no signs of reversing.

Source: Truckerhuss.com, July 2016

American Century Employees Sue for Excessive 401k Fees

Abstract: Employees of American Century, parent of asset management firm American Century Investments, have sued over the firm's 401k plan. This is the latest in a string of lawsuits targeting financial services companies for their own retirement plans.

Source: Investmentnews.com (registration may be required), July 2016

ERISA Class Action Targets Fujitsu's 401k Plan Fees

Abstract: A new ERISA class action accuses Fujitsu Technology & Business of America Inc. of breaching its fiduciary duties by designing and administering one of the most expensive large 401k plans in the country.

Source: Bna.com (registration may be required), July 2016

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