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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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Embezzlement of 401k Deferrals by COO of Architecture Firm is (Doubly) Costly

Abstract: On March 22, 2017, the U.S. Court of Appeals for the Second Circuit ruled against Christine Bodouva that her restoration of funds to her Company's 401k Plan should be offset against the District Court's order for forfeiture in her criminal trial.

Source: Lexology.com, March 2017

Eaton Executives Escape Lawsuit Over Stock in Retirement Plan

Abstract: Eaton Corp. executives dodged a proposed class action accusing them of breaching their ERISA fiduciary duties by allegedly allowing artificially inflated stock to be invested in the company's retirement plan.

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

Oracle 401k Challenge Jumps Another Legal Hurdle

Abstract: A federal district court judge has granted the recommendation of a magistrate judge, to the effect that an ERISA lawsuit filed against Oracle will not be dismissed before trial.

Source: Planadviser.com, March 2017

USC Can't Force Retirement-Plan Fee Claims Into Arbitration

Abstract: The University of Southern California can't make retirement plan participants take their claims about plan mismanagement to arbitration. The decision means participants may proceed with their claims in federal court instead of undergoing arbitration, an alternative dispute resolution method usually preferred by employers because of its confidentiality.

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

Anthem Workers Advance Challenge to 401k Plan Fees

Abstract: Anthem Inc.'s pension committee must defend allegations that the company's 401k plan carried excessive fees. The proposed class action accuses the committee of including high-fee mutual fund share classes in Anthem's 401k plan and paying excessive record-keeping fees to Vanguard.

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

Texas Judge Shoots Down Latest Effort to Halt DOL Fiduciary Rule

Abstract: Opponents of the Department of Labor's fiduciary rule were dealt another blow Monday, when Chief Judge Barbara M.G. Lynn of the U.S. District Court for Northern Texas denied the financial trade association plaintiffs' motion for an injunction to stop the regulation.

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

Bank of America Prevails in 401k Asset Transfer Case

Abstract: Bank of America prevailed against employees who challenged a $3 billion transfer from the company's 401k plan to its cash balance defined benefit plan.

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

Eighth Circuit Sends Fund-Mapping Case Back to Trial Court to Redetermine Damages

Abstract: The Eighth Circuit has weighed in again on the fund-mapping portion of this long-running case. Its latest decision affirms the trial court's determination that a fiduciary breach occurred, but reopens the question of damages because the trial court failed to consider any method for measuring the plans' losses other than the method suggested by the Eighth Circuit's previous decision.

Source: Thomsonreuters.com, March 2017

Eighth Circuit Remands Tussey v. Abb, Inc. Back to District Court

Abstract: Because the district court apparently mistook direction for a definitive ruling on how to measure plan losses, and as a result entered judgment in favor of the ABB fiduciaries despite finding they did breach their duties, on this appeal, the Court vacated the judgment on that claim and remanded the case back to the district court for further consideration regarding whether the participants can prove losses to the plans.

Source: Erisalawyerblog.com, March 2017

DOL Alleges Company Failed to Remit Employees 401k Withholdings

Abstract: According to the complaint, the plaintiff alleges that defendants established a 401k plan and that employees withheld $12,611.85 as plan contributions and $17,966.56 in loan repayments and defendants breached their duty by failing to these remit sums to the plan.

Source: Flarecord.com, March 2017

Safeway Workers Advance Two Challenges to JPMorgan Funds

Abstract: Grocery giant Safeway can't escape two proposed class actions challenging the fees and investments in its 401k plan, including its decision to offer JPMorgan target-date funds.

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

Insperity Must Face Lawsuit Over 401k Fees, Funds

Abstract: A lawsuit accusing human resources provider Insperity Inc. of loading its 401k plan with high-fee investment funds and paying itself excessive recordkeeping fees is moving forward.

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

Allergan Stock Drop Leads to Second ERISA Lawsuit

Abstract: Allergan now faces another lawsuit by employees who claim an ongoing investigation into generic drug pricing caused them to lose retirement savings held in the drugmaker's stock.

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

TIAA Dodges Retirement Fee Lawsuit by University Workers

Abstract: Teachers Insurance and Annuity Association of America dodged a lawsuit accusing it of charging excessive fees to participants in retirement plans sponsored by the University of Chicago and Nova Southeastern University.

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

Familiar Arguments in New JP Morgan ERISA Challenge

Abstract: JPMorgan Chase Bank is now the target of another ERISA challenge against its own 401k plan, this one leveling many of the same complaints against the company found in a previous lawsuit.

Source: Planadviser.com, March 2017

Why (Almost) Every Mutual Fund Company Can Expect to Be Sued

Abstract: If your employer's 401k plan is full of mutual funds, you're not alone: the companies that issue those mutual funds put them in their 401k plans, too. But this long-standing practice may be about to change. A new wave of litigation is targeting companies that put their own investment products in their workers' 401k plans.

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

Experts Still Expect Private Enforcement of Fiduciary Standard

Abstract: Even if the DOL leadership under President Trump declines to enforce a strict fiduciary standard, private litigators will undoubtedly pick up any slack if the administration fails to fully eliminate the Obama-era conflict of interest rulemaking.

Source: Planadviser.com, March 2017

Seventy Seven Energy Sued Over Chesapeake Stock in 401k

Abstract: Fiduciaries of the Seventy Seven Energy Inc. 401k plan face accusations that they violated ERISA by allowing plan assets to be invested in the "extremely volatile" stock of Chesapeake Energy Corp.

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

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


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