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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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Duty of Loyalty in Stock Drop Cases

Abstract: The United States District Court for the District of Minnesota has, for a second time, dismissed claims by participants in the Wells Fargo 401k plan. This second decision focused on the issue of the fiduciary duty of loyalty, the court's discussion of which is thorough and interesting both in its specific application to stock drop cases and to fiduciary litigation more generally. In this article we discuss the court's opinion in detail.

Source: Octoberthree.com, August 2018

The ERISA Industry Committee Files Lawsuit Against City of Seattle

Abstract: The ERISA Industry Committee filed a complaint in the U.S. District Court for the Western District of Washington against the City of Seattle for obstructing the federal law that enables large employers to administer health and retirement benefits uniformly across the country.

Source: Eric.org, August 2018

SPD vs. Plan Document? Plan Wins, Unless...

Abstract: It is not uncommon for conflicts to exist between the provisions of a plan document and the plan's summary plan description. In a recent case, the provisions of a conflicting SPD may prevail. The case was sent back to the lower court because the error in the SPD was so significant that it could be found to be constructive fraud.

Source: Captrustadvisors.com, August 2018

8th Circuit Sets High Bar for Labeling Retirement Plan Investments "Imprudent"

Abstract: In Meiners v. Wells Fargo & Company, the U.S. Court of Appeals for the Eighth Circuit clarified the burden plaintiffs must meet to state a claim for breach of fiduciary duty under ERISA based on the inclusion of allegedly underperforming and expensive investment funds. Because plaintiffs often lack detailed information about the process plan fiduciaries followed to make investment choices, pleading a plausible claim that those fiduciaries have acted imprudently can pose a significant challenge.

Source: Kslaw.com, August 2018

The Recent NYU ERISA Decision and Best Practices for ERISA Fiduciaries

Abstract: The decision in favor of NYU, and the recent dismissal of two other similar lawsuits against Northwestern University and the University of Pennsylvania, should give some comfort to fiduciaries of ERISA retirement plans, especially those sponsored by higher education institutions. The NYU decision suggests that 403b plans do not necessarily violate ERISA simply because they have a very large number of investment funds, including actively managed funds, or because they do not promptly remove underperforming funds from the plan.

Source: Bsk.com, August 2018

What Makes a 401k Plan Sponsor a "Mark" for Litigation

Abstract: Certain 401k plan sponsors can be targets for litigation because they're showing something glaring that shows that they are not exercising their fiduciary duty in a prudent manner. To avoid being a "mark" for 401k litigation, the plan sponsor should avoid the items noted in this article.

Source: Jdsupra.com, August 2018

Fiduciary Litigation: Best Practices for DC Plan Fiduciaries

Abstract: When employees allege the employer or plan sponsor has not acted in the sole interest of the participants or followed the plan requirements, the plan sponsor may be liable for losses and damages which result. However, by following the best practices for defined contribution plan fiduciaries, plan sponsors can avoid litigation and limit potential losses.

Source: Bsllp.com, August 2018

Court Orders Business Owner to Prison for Embezzling 401k Funds

Abstract: The court-ordered restitution includes $69,000 in employee and matching employer contributions, as well as lost earnings due to the 401k plan, and approximately $4.3 million for fraudulent loans and identity theft.

Source: Planadviser.com, August 2018

Appeals Court Upholds Dismissal of Wells Fargo 401k Lawsuit

Abstract: A federal appeals court in St. Louis upheld a U.S. District Court judge's dismissal of an ERISA breach claim against Wells Fargo & Co. by a participant in the company's 401k plan, who alleged fiduciaries could have offered a better-performing nonproprietary investment choice.

Source: Investmentnews.com (registration may be required), August 2018

Citigroup Reaches $6.9 Million Settlement in 401k Lawsuit

Abstract: Citigroup has reached a $6.9 million settlement with plaintiffs in a more than decade old lawsuit alleging the financial services firm stuffed its retirement plan with expensive in-house investments, thereby enriching the company at the expense of its employees.

Source: Investmentnews.com (registration may be required), August 2018

Statute of Limitations Bars Claim That High Fees Made Plan's Investments Imprudent

Abstract: This case highlights the importance of "actual knowledge" under ERISA's statute of limitations for fiduciary violations. Not only does actual knowledge shorten the limitation period from six to three years, but it may also effectively prevent the use of a continuing violation theory of liability.

Source: Thomsonreuters.com, August 2018

Court Finds in Favor of NYU in 403b Plans Lawsuit

Abstract: A federal district court judge found that "while there were deficiencies in the Committee's processes -- including that several members displayed a concerning lack of knowledge relevant to the Committee's mandate -- ;plaintiffs have not proven that the Committee acted imprudently or that the Plans suffered losses as a result."

Source: Planadviser.com, August 2018

Benefit Plan Sponsors Must Be Given Deference in Plan Interpretation

Abstract: A recent federal appeals court decision has vacated the lower court's decision and remanded the case back to the court. The decision found the district court had used the wrong standard of review and the ambiguous terms of the plan should have been reviewed using the deferential arbitrary and capricious standard.

Source: Bsllp.com, July 2018

General Cable Snaps Plaintiffs' ERISA Stock Drop Claims

Abstract: In this case, the alleged knowledge of an artificially high stock price was rooted in the fact that the company had not disclosed that employees of its foreign subsidiaries had violated the Foreign Corrupt Practices Act of 1997 by paying bribes to foreign government officials.

Source: Planadviser.com, July 2018

Ninth Circuit Holds Collective Claims Made on Behalf of ERISA Plans Survive Motion to Compel Arbitration

Abstract: The U.S. Court of Appeals for the Ninth Circuit held that collective claims for alleged breaches of fiduciary duty under ERISA were not subject to the arbitration agreements in plaintiff employees’ employment contracts. Instead, since those claims were brought for the benefit of the ERISA plans in which the plaintiffs participated, they were outside the scope of the employees’ individual arbitration agreements and could be litigated in court on a collective basis.

Source: Classactioncountermeasures.com, July 2018

Ninth Circuit Rejects Bid to Arbitrate ERISA Plans' Claims

Abstract: The Ninth Circuit held that employees' agreements to arbitrate all claims the employees may have did not extend to claims brought on behalf of two ERISA plans under ERISA Section 502(a)(2). In so ruling, the Court explained that the employees could not agree to arbitrate claims on behalf of the plans in individual employment contracts because those employees cannot waive the plans' rights.

Source: Erisapracticecenter.com, July 2018

Brown University Only Partially Successful in 403b Lawsuit

Abstract: A federal judge in Rhode Island recently permitted several claims against Brown University to proceed in a lawsuit alleging that the university and its fiduciaries breached their fiduciary duties under ERISA by mismanaging Brown's defined contribution plans. This decision follows the recent decision in a similar class action lawsuit against Northwestern University in which a federal judge granted Northwestern a complete victory in its motion to dismiss.

Source: Employeebenefitsblog.com, July 2018

Internal Statutes of Limitation Under ERISA

Abstract: Considering the heightened frequency of 401k plan litigation, it is appropriate for plan fiduciaries to include favorable procedural rules as part of their claims procedures. One such rule is an internal statute of limitations, which the Supreme Court has held is permissible in an ERISA plan so long as it is reasonable and there is no controlling statute to the contrary. As a best practice, notice of any internal statute of limitations should be provided.

Source: Wagnerlawgroup.com, July 2018

ERISA Litigation Surging -- Focus on Fees

Abstract: After a few years of decline, litigation involving 401k plans "has surged again recently," according to a study published by the Center for Retirement Research at Boston College. This is likely not news to 401k sponsors and service providers, who are confronted with this reality on a near daily basis. The authors of the study point to some consequences -- good, bad, and mixed -- of the 401k litigation trends they've identified.

Source: Insidecompensation.com, July 2018

Checksmart Wins Dismissal of 401k Excessive Fee Lawsuit

Abstract: Checksmart Financial LLC defeated a lawsuit accusing it of violating federal benefits law by offering high-fee, poorly performing investment funds in its $25 million 401k plan.

Source: Bna.com, July 2018

Judge dismisses Stock-Drop Suit Against Allergan

Abstract: A federal judge has dismissed a complaint by participants in an Allergan defined-contribution plan, rejecting allegations that company and plan executives violated their fiduciary duties by offering company stock in the plan menu.

Source: Investmentnews.com (registration may be required), July 2018

Is This the Most Absurd 401k Fraud Case Yet?

Abstract: According to a Matrix Trust representative, "Matrix Trust Company did not manage these investment accounts or serve as a trustee or fiduciary for them. This lawsuit involves accounts that were opened and managed by Vantage Benefits Administrators. Matrix's actions were consistent with its custodial agreements and intends to vigorously defend itself against these baseless claims."

Source: 401kspecialistmag.com, July 2018

Recordkeeper Defeats Second Round of Robo-Adviser Fee Litigation

Abstract: The court rejected the argument that constraining the plan's service provider choices amounted to de facto control since the plan had other alternatives to choose from (such as not using an investment adviser or changing recordkeepers) and dismissed the claim without leave to amend, ending the case at the district court.

Source: Erisapracticecenter.com, July 2018

Matrix Trust Company Accused of Making Unauthorized Transfers of 403b Plan Assets

Abstract: Plan participants have filed a lawsuit against Matrix Trust Company for making several transfers to an unauthorized account held by recordkeeper Vantage Benefits Administrators.

Source: Planadviser.com, July 2018

GWU Tells Court 403bs Cannot Be Compared to 401ks

Abstract: In a brief supporting a motion to dismiss a case against George Washington University related to the management of its 403b plan, the defendants note that 403bs have always looked differently and were set up for a different purpose than 401k plans.

Source: Plansponsor.com, June 2018

QDIA Lawsuits: A New Fiduciary Risk for 401k Plan Sponsors

Abstract: Here's a new risk for plan sponsors to be aware of, you could be sued based on the qualified default investment alternative (QDIA) you choose for your retirement plan. For example, participants could claim you failed to fulfill your fiduciary duty if the plan's qualified default investment option -- typically a target-date fund -- doesn't deliver the expected outcomes.

Source: 401ktv.com, June 2018

Northwestern University Defeats 403b Lawsuit

Abstract: A federal judge in the Northern District of Illinois recently dismissed a lawsuit against Northwestern University alleging that the University and its fiduciaries mismanaged its retirement and voluntary savings plans. This is the latest decision in a series of class action lawsuits against prominent universities in which plaintiffs allege fiduciary violations of ERISA.

Source: Employeebenefitsblog.com, June 2018

401k Excessive Fee Suit Alleges Issues with ETFs, TDFs, and Menu Size

Abstract: Another provider has been sued by an employee-participant in its own 401k plan, not just for its inclusion of proprietary funds, but the type and number of options on its menu and its target-date strategy.

Source: Asppa.org, June 2018

Vanderbilt University Faces New Claim Over Product Marketing to 403b Participants

Abstract: The new claim in the 403b plan lawsuit says the defendants should have protected participant data as plan assets and not allowed TIAA to use it to market its products and services to participants.

Source: Planadviser.com, June 2018

Deutsche Scales Back Workers' Claims Ahead of 401k Fee Trial

Abstract: The workers can move forward with their claims of fiduciary breach based on the offering of in-house funds that carried excessive fees and performed poorly, as well as Deutsche's alleged failure to monitor high fees and fiduciaries, Judge Lorna G. Schofield of the U.S. District Court for the Southern District of New York held June 6. The workers, however, can't proceed with their claims that Deutsche engaged in prohibited transactions under ERISA by offering proprietary mutual funds in the plan.

Source: Bna.com (registration may be required), June 2018

Plaintiffs Press for Fiduciary Rule 'Closure'

Abstract: The victorious plaintiffs in litigation vacating the Labor Department's fiduciary rule would like the U.S. Court of Appeals for the 5th Circuit to put the rule -- and the financial services industry at large -- out of its collective "misery."

Source: Asppa.org, June 2018

Invesco Sued for 'Indiscriminately' Loading 401k Plan With In-house Funds

Abstract: Invesco has been sued for allegedly stacking its 401k plan with proprietary investments, joining the ranks of more than 20 asset managers who have had to defend against similar claims of mismanagement by employees seeking to claw back lost retirement savings.

Source: Investmentnews.com (registration may be required), June 2018

Bank of America Wins 401k Asset Transfer Appeal

Abstract: Bank of America Corp. defeated an appeal challenging a 20-year-old, $3 billion transfer from the company's 401k plan to its pension plan. A federal district court didn't err in using the bank's approach to determine whether it profited from the transfers and then conclude that since it didn't, the workers weren't entitled to any monetary recovery.

Source: Bna.com (registration may be required), June 2018

Edison Executives Beat Latest Challenge to Stock Losses in 401k

Abstract: Two Edison International top executives defeated again a worker's lawsuit challenging their decision to retain allegedly inflated Edison stock in the company's 401k plan.

Source: Bna.com (registration may be required), June 2018

Fiduciary Litigation Update

Abstract: The following topics are covered in this presentation slide deck: 401k and 403b fee litigation, fiduciary risk on alternative investments. proof of causation on breach and damages, and ESOP trials and valuation issues.

Source: Americanbar.org, May 2018

Northwestern University Beats Jerry Schlichter 403b Lawsuit

Abstract: Northwestern University has become the second college to beat back allegations of retirement-plan mismanagement, prevailing in a lawsuit brought by prominent plaintiffs' attorney Jerry Schlichter.

Source: Investmentnews.com (registration may be required), May 2018

Northwestern University 403b Lawsuit Tossed By District Court

Abstract: Defendants strongly prevailed with their motion to dismiss, and the Illinois District Court barred further motions as moot: The complaint was far too general in its scope and allegations to move ahead.

Source: Planadviser.com, May 2018

Court Orders Independent Plan Fiduciary for Cambridge Technology Group

Abstract: The U.S. District Court for the Eastern District of Virginia has ordered the appointment of an independent fiduciary to distribute $535,790 in assets to 24 participants of the Cambridge Technology Group Inc. 401k Plan.

Source: Plansponsor.com, May 2018

University of Chicago Settles 403b Lawsuit for $6.5 Million

Abstract: The University of Chicago has agreed to settle a retirement-plan lawsuit for $6.5 million, becoming the first of about 20 prominent universities facing allegations over 403b-plan mismanagement to take such a step. Observers say it's difficult to determine if this is a harbinger of the outcome in the roughly 20 outstanding lawsuits.

Source: Investmentnews.com (registration may be required), May 2018

Court Dismisses Claims Regarding Investments in Former Parent Company's Stock

Abstract: A federal district court has dismissed all claims against the fiduciaries of a DC plan over their retention of investments in the stock of the plan sponsor's former parent company. Together, this case and Tatum show how spun-off employers may risk litigation whether they keep investments in their former parent company's stock or force a divestiture. But the outcome here also illustrates how plan fiduciaries who take the frozen fund approach used here can benefit from Dudenhoefer.

Source: Thomsonreuters.com, May 2018

Settlement Preliminarily Approved in University of Chicago Excessive Fee Suit

Abstract: Without admitting any wrongdoing, the University of Chicago has agreed to a $6,500,000 settlement of an ERISA excessive fee case. According to the settlement agreement, the university has already made changes to the investment lineup for its 403b plans.

Source: Planadviser.com, May 2018

University of Rochester Called Out for Excessive Fees Paid to TIAA

Abstract: A participant in the University of Rochester Retirement Program has filed a lawsuit alleging that plan participants have paid an estimated $72 million in in recordkeeping, distribution, and mortality risk fees to provider TIAA.

Source: Planadviser.com, May 2018

Plan Sponsor Challenged in a Lawsuit for Using Untested Hewitt Funds

Abstract: The plaintiffs say that since these experimental funds were added to the plan in 2013, they have consistently underperformed their benchmarks, and have underperformed the funds they replaced by tens of millions of dollars.

Source: Planadviser.com, May 2018

States Ask 5th Circuit to Reconsider Fiduciary Ruling

Abstract: In a filing on May 16, the states explain that since the federal government "is no longer pursuing this appeal... the exceptional importance of the issues, and the grave harm the States will suffer as a result of the panel opinion -- billions of dollars in lost retirement income to their residents and tens of millions of dollars in lost tax revenue -- the States respectfully request that the Court reconsider its decision."

Source: Ntsa-net.org, May 2018

Is Excessive Fee Litigation Headed for Its Dudenhoeffer?

Abstract: Groom Law Group litigation principal Mark Bieter analyzes recent trends and outcomes in class actions challenging fees and services in large corporate 401k plans.

Source: Groom.com, May 2018

Stable Value Snub Draws Excessive Fee Suit

Abstract: The law firm of Schlichter, Bogard & Denton has targeted another 401k plan for breach of its fiduciary duties and their claims include that the lack of a stable value fund cost plan participants $41 million.

Source: Asppa.org, May 2018

Aon Hewitt, Lowe's 401k Plan Latest Target of ERISA Lawsuit

Abstract: Aon Hewitt Investment Consulting and Lowe's are being sued by the participants of the Lowe's 401k retirement plan; the proposed class of plaintiffs puts forward a variety of familiar ERISA fiduciary breach claims.

Source: Planadviser.com, May 2018

Third Parties Weigh in on 403b Litigation

Abstract: Three briefs were filed with the US Court of Appeals for the Third Circuit in support of the University of Pennsylvania and its Investment Committee. The briefs support the assumption that 403b plans have traditionally been managed differently than 401k plans, and as a result, they cannot be viewed in the same light with respect to litigation.

Source: Sentinelgroup.com, May 2018

401k Lawsuits: What Are the Causes and Consequences?

Abstract: This 24-page paper looks at the broad complaints that motivate the litigation and how the threat of litigation may affect the retirement industry. The first section introduces the three main reasons why litigation is brought in the first place. The second section turns to the potential effects of this litigation on 401k plans.

Source: Bc.edu, May 2018

Stable Value Fund Withstands ERISA Challenge

Abstract: The First Circuit Court held that the Plaintiff's claims were based on a type of "hindsight" analysis of past performance and held that those allegations are not sufficient to support a claim that plan fiduciaries were imprudent in making conservative investment decisions.

Source: Hodgsonruss.com, April 2018

403b University Cases Move Forward: Cassell v. Vanderbilt University

Abstract: A lawsuit against Vanderbilt University is moving forward based on allegations that the university and its fiduciaries mismanaged its retirement plan by paying excessive fees and maintaining poor investment options.

Source: Employeebenefitsblog.com, April 2018

Dissecting Retirement Plan Lawsuit Issues

Abstract: The stream of lawsuits filed for alleged mismanagement of retirement plans has been a cause for concern for plan sponsors of all different sizes and industries across the country. This article explores the more frequently cited issues, focusing on the recent lawsuits filed against higher education and healthcare institutions. It also provides some thoughts on how retirement plan sponsors can prepare their plans and protect fiduciaries.

Source: Cammackretirement.com, April 2018

AARP Wants Great-West's 401k Victory Reversed

Abstract: The industry group representing Americans 50 and older wants the U.S. Court of Appeals for the Tenth Circuit to revive a class action by 270,000 people who invested in Great-West's guaranteed investment annuity contracts. Investors say that because Great-West kept the difference between the rate of return they received and the returns actually earned by the investment, the company essentially set its own compensation.

Source: Bna.com (registration may be required), April 2018

401k Plan Participants Challenge Principal's Management of TDFs

Abstract: The lawsuit alleges Principal used proprietary investment vehicles, rather than other investment vehicles, and share classes with higher fees for the underlying TDF investments, to produce more income for itself and its subsidiaries.

Source: Planadviser.com, April 2018

Brief in University of Pennsylvania 403b Lawsuit Points Out Differences From 401ks

Abstract: An amici curiae brief filed by the American Council on Education and other higher education associations details the history of higher education 403b plans. The Council points out that the retirement system for higher education has always looked different than the system for industrial, corporate America.

Source: Plansponsor.com, April 2018

401k Lawsuits Being Brought More Aggressively Against Retirement Plan Advisers

Abstract: Retirement plan advisers are increasingly being drawn into 401k lawsuits, as litigation creeps down market and plaintiffs' lawyers test out new legal theories to ensnare advisers, according to a panel of litigation experts.

Source: Investmentnews.com (registration may be required), April 2018

Case Filed Against Home Depot for Alleged Abuses in 401k Plan

Abstract: The suit alleges "that Home Depot violates basic fiduciary duties under ERISA and abuses its employees' trust by mismanaging their 401k retirement plan. According to the complaint, Home Depot has selected multiple poorly-performing funds for its 401k plan, allowed investment advisers to charge its employees unreasonable fees, and turned a blind eye to a kickback scheme between an investment adviser and the plan's recordkeeper."

Source: Prnewswire.com, April 2018

Most Motions to Dismiss Denied in Yale 403b Plan Suit

Abstract: In a case challenging recordkeeping and investment fees for the Yale University 403b plan, U.S. District Judge Alvin W. Thompson of the U.S. District Court for the District of Connecticut moved forward most claims of violation of duty of prudence under ERISA.

Source: Planadviser.com, April 2018

TIAA Wins Dismissal of Most Claims About Its Loan Processes

Abstract: The lawsuit brought by a participant in a Washington University retirement plan challenges TIAA's use of collateral in its loan process and the provider's retention of some interest on the collateral.

Source: Planadviser.com, April 2018

A Closer Look at the 5th Circuit Decision Vacating the Fiduciary Rule

Abstract: After the Fifth Circuit's ruling, a number of US law firms issued client advisories concerning the impact of the Fifth Circuit's decision on the rule. There has been some confusion as to whether the Fifth Circuit's ruling had a nationwide effect or, in light of the decisions upholding the rule, was limited to the jurisdiction of the Fifth Circuit.

Source: Kattenlaw.com, April 2018

First Circuit Dismisses Fiduciary Breach Complaint Based on Mismanagement of a Stable Value Fund

Abstract: In Barchock v. CVS Health Corp. the plaintiffs allege violations of the fiduciary duty of prudence under ERISA by the fiduciaries of an employer-sponsored 401k retirement plan. Specifically, the plaintiffs contend that an investment fund offered through the plan was invested too heavily in cash or cash-equivalents for the years at issue, and thus that the plan was imprudently managed and monitored. The district court dismissed the complaint for failure to state a claim under ERISA.

Source: Erisalawyerblog.com, April 2018

Yale University Must Defend Challenge to Retirement Plan Fees

Abstract: Yale University is the latest college to lose an early round in a proposed class action challenging how it manages its retirement plan. A federal judge on March 30 refused to dismiss most claims against the school, including claims challenging the retirement plan's administrative and investment fees.

Source: Bna.com (registration may be required), April 2018

Court Orders Plan Fiduciary to Pay Restitution to 401k Plan

Abstract: A fiduciary to the Southside Manufacturing Corp. Retirement 401k Savings Plan will pay restitution of $87,276 for stealing from an employee benefit plan, and failing to pay federal taxes.

Source: Planadviser.com, March 2018

Edward Jones Can't Escape 401k Fee Class Action

Abstract: Edward Jones couldn't convince a federal judge to throw out claims that it violated federal benefits law by paying excessive recordkeeping fees and offering imprudent investment options in its 401k plan.

Source: Bna.com (registration may be required), March 2018

TPA Accused of Stealing Assets From Retirement Plans

Abstract: Vantage Benefits has already been ordered to restore funds to one 401k plan; now a new lawsuit accuses it of stealing funds from MBA Engineering's 401k and cash balance plans as well as approximately 20 others.

Source: Planadviser.com, March 2018

Gannett 401k Participant Sues Over Stock Holdings

Abstract: A participant in the Gannett Co. Inc. 401k Savings Plan sued the company and plan executives, alleging they violated their fiduciary duties for holding too much stock in Gannett's former parent company in the 401k plan.

Source: Investmentnews.com (registration may be required), March 2018

Morningstar and Prudential Win RICO Suit Dismissal

Abstract: The U.S. District Court for the Northern District of Illinois, Eastern Division, has dismissed a lawsuit filed against Morningstar and Prudential. The unsuccessful challenge was viewed as somewhat unique amid the glut of retirement industry litigation because it cited the Racketeer Influenced and Corrupt Organizations Law of 1970, known as RICO.

Source: Planadviser.com, March 2018

Fifth Circuit Vacates DOL Fiduciary Rule "In Toto"

Abstract: In a 2-1 decision, the US Court of Appeals for the Fifth Circuit struck down the DOL's fiduciary rule, deciding in favor of several leading financial services industry trade associations. This article examines the impact of this decision and provide suggestions on what financial institutions should be thinking about.

Source: Morganlewis.com, March 2018

Fifth Circuit Vacates Controversial DOL Fiduciary Rule

Abstract: The decision in Chamber of Commerce v. U.S. Department of Labor represents a major victory for industry participants who raised concerns that the rule had unintended collateral effects that would render investment and retirement services more costly and potentially inaccessible for certain individual investors. The Fifth Circuit's decision further muddles the rule's already uncertain future, while simultaneously providing an even greater impetus for the SEC to adopt its own rule.

Source: Mcguirewoods.com, March 2018

Prudential, Morningstar Beat Robo-Adviser Lawsuit

Abstract: Prudential and Morningstar have escaped a lawsuit claiming their 401k plan robo-adviser intentionally steered investors toward higher-cost funds that pay fees to Prudential.

Source: Bna.com (registration may be required), March 2018

401k Service Providers Owe No Fiduciary Duty With Respect to Negotiating Their Fee Compensation

Abstract: Following the findings expressed in three other Circuits, the United States Court of Appeals for the Ninth Circuit recently held that plan administrators are not ERISA fiduciaries when negotiating their own compensation with prospective customers. Instead, because the employer/plan sponsor has the express duty under ERISA to defray reasonable expenses of administering a 401k plan, any claims that fully disclosed fee arrangements are unreasonable "lie against the employer, not the service provider."

Source: Masudafunai.com, March 2018

Voya Escapes Lawsuit Over 401k Robo-Adviser Fees

Abstract: A 401k investor who accused Voya Financial and its subsidiaries of overcharging for investment advice from robo-adviser Financial Engines Advisors won't get another chance to make her case. A federal judge on March 13 denied the investor's request to amend her complaint, effectively ending the proposed class action.

Source: Bna.com (registration may be required), March 2018

Court Rules in Favor of DOL Fiduciary Restrictions on Annuity Products

Abstract: In the latest episode of what has become an ironic series of DOL enforcement and federal judicial events, the U.S. 10th Circuit Court of Appeals has ruled against plaintiffs who oppose DOL restrictions on annuity products sold to retirement savers.

Source: Ascensus.com, March 2018

Fifth Circuit Upholds Dismissal of Class Action Against Fiduciaries of Radio Shack's 401k Plan

Abstract: In Singh v. RadioShack Corp., the Plaintiffs held RadioShack stock in their 401k accounts after November 30, 2011. They appeal the dismissal by the district court of their claims that Defendants breached their fiduciary duties under ERISA by allowing plan participants to invest in RadioShack stock despite the company's descent into bankruptcy. The Fifth Circuit Court of Appeals affirmed the district court's dismissal.

Source: Erisalawyerblog.com, March 2018

Georgetown University Hit With 403b Excessive Fee Suit

Abstract: The suit alleges that rather than "...leveraging the Plans' substantial bargaining power to benefit participants and beneficiaries, Defendants failed adequately to evaluate and monitor the Plans' expenses and caused the Plans to pay unreasonable and excessive fees for investment and administrative services."

Source: Ntsa-net.org, February 2018

Appeals Court Declares Plan Service Provider Transamerica Not a Fiduciary, Not Guilty of Breach

Abstract: The plaintiffs, who were participants in several ERISA-governed retirement plans for which Transamerica provided investments and services, alleged that Transamerica was a plan fiduciary and breached its duties in that role. The breaches allegedly occurred in Transamerica's negotiating with plans the compensation for its services, in withdrawal of fees from participant accounts, and in its receipt of revenue sharing payments from investment managers associated with the plans.

Source: Ascensus.com, February 2018

Retirement Plan Sponsors Looking to Protect Themselves From Litigation

Abstract: Fee lawsuits have exponentially increased over the past two years. Retirement plan sponsors of all sizes must be vigilant this year to protect themselves from plan litigation relate to high fees, lack of investment options or poor investment options and breach of fiduciary duty.

Source: Benefitnews.com, February 2018

Fidelity Stable Value Fund Suit Gets Final Dismissal From Appellate Court

Abstract: The court said the plaintiffs claim that Fidelity agreed to overly conservative investment guidelines in a failed effort to lock up all wrap coverage so that its competitors would not be able to obtain such coverage made little sense.

Source: Planadviser.com, February 2018

ERISA Class Actions Settlements Cost Employers Nearly $1 Billion in 2017

Abstract: Class action settlements and court decisions related to 401k retirement plans in 2017 significantly affected the direction of ERISA litigation, according to the newest edition of an annual law firm report on workplace class action lawsuits.

Source: Blr.com, February 2018

Lawyer Fighting DOL Rule Blasts Scottrade Fiduciary Charges

Abstract: Eugene Scalia, a partner with Gibson Dunn who represents the nine plaintiffs suing the Labor Department over its fiduciary rule, told the U.S. Court of Appeals for the 5th Circuit on Friday that Massachusetts' action Thursday against Scottrade for allegedly violating the fiduciary rule's Impartial Conduct Standards is "without merit," and will spark "private plaintiffs...to exploit the rule to concoct state law claims."

Source: Thinkadvisor.com, February 2018

Class Certified in ERISA Lawsuit Targeting NYU Retirement Plan

Abstract: The U.S. District Court for the Southern District of New York ruled this week to certify a sizable class of plaintiffs in ERISA lawsuit targeting two 403b retirement plans at New York University. The amended compliant explicitly names as a defendant one of the advisory firms supporting NYU's retirement plans.

Source: Planadviser.com, February 2018

Bay State Regulator Files Fiduciary Rule-Related Complaint

Abstract: The Massachusetts Securities Division has filed charges against a firm for knowingly violating its internal policies regarding implementation of the DOL fiduciary rule and taken a shot at the Department of Labor.

Source: Ntsa-net.org, February 2018

RadioShack Defeats Challenge to Stock Losses in 401k Plan

Abstract: RadioShack executives defeated a lawsuit accusing them of violating federal benefits law by allowing workers to invest in company stock despite knowing of the company's financial decline and impending bankruptcy.

Source: Bna.com (registration may be required), February 2018

Don't Make Your 401k a Litigation Target

Abstract: You are at risk because no plan is safe when there are so many class action lawyers out there aggressively looking for lawsuits to file. Some plans are more attractive lawsuit targets than others, and there are things fiduciaries can do to lower their risk of being hit with a 401k lawsuit.

Source: 401ktv.com, February 2018

Mutual of Omaha Sued Over Affiliated Funds in 401k Plan

Abstract: The proposed class action accuses Mutual of Omaha of filling its 401k plan with affiliated investment funds that were essentially funds offered by third parties plus an extra layer of fees that went to the Nebraska-based insurer. The company also tacked on extra layers of fees to unaffiliated funds in the 401k plan, according to the complaint.

Source: Bna.com (registration may be required), January 2018

Court Sets Method for Determining Damages Due to Breach of Loyalty in Fund-Mapping Case

Abstract: In a case that began 12 years ago, the trial court has again determined the method it will use to calculate damages for a breach of the duty of loyalty. The breach was committed by the fiduciaries of two 401k plans who replaced one of the plans' investment funds with funds that produced more revenue sharing.

Source: Thomsonreuters.com, January 2018

New Ground(s) Emerge in NYU Excessive Fee Suit

Abstract: An amended claim in an excessive fee litigation treads some new ground, including naming the plan's investment advisor as a defendant. New York University was one of the first of the university 403(b) excessive suits filed in August 2016, and representing the plaintiffs then (and now) was the law firm of Schlichter, Bogard & Denton.

Source: Asppa.org, January 2018

New Excessive Fee Litigators Emerge

Abstract: A new excessive fee suit has been filed -- this time against a hospital's retirement plan -- and from a different direction. What is most interesting about this litigation is that the plaintiffs are represented by counsel that doesn't appear to have a track record in ERISA litigation.

Source: Napa-net.org, January 2018

Lawsuits Push 401k Plan Sponsors to Cut Fees

Abstract: Employers are moving to reduce their 401k plan costs in greater numbers, largely in an attempt to avoid the fate of peers who've been sued for allegedly excessive fees in their defined-contribution plans, new research suggests.

Source: Investmentnews.com (registration may be required), January 2018

Are Forum Selection Clauses in ERISA Plan Documents Enforceable?

Abstract: The United States Supreme Court allowed a Seventh Circuit decision to remain in effect that determined that a forum choice provision in an ERISA plan is enforceable, despite ERISA's statement that suits "may be brought" in courts tied to the plan or plan beneficiary.

Source: Boomerisablog.com, January 2018

Investment Adviser Named as Defendant in NYU Retirement Plan Case

Abstract: In an unusual turn of events, the investment adviser to New York University's retirement plan has been named as a co-defendant in litigation attacking the plan's allegedly excessive fees. Plaintiffs contend the adviser, Cammack LaRhette Advisors, provided "imprudent investment advice," which enabled NYU to breach its fiduciary duty to plan participants.

Source: Pionline.com, January 2018

HP Scores 9th Cir. Win in Challenge to Stock in 401k Plan

Abstract: Hewlett-Packard Co. is the latest major company to defeat a lawsuit by workers who say they lost out on retirement savings by investing in company stock. The workers failed to show that HP executives took steps to conceal a corporate fraud related to the company's controversial acquisition of British software maker Autonomy Corp., the U.S. Court of Appeals for the Ninth Circuit said Jan. 9.

Source: Bna.com (registration may be required), January 2018

Eaton Execs Win Battle Over Retirement Plan Stock

Abstract: Four Eaton Corp. executives scored an appeals court victory in a case accusing them of wrongly allowing workers to continue investing retirement savings in company stock. The executives didn't have an option that was clearly better than letting workers continue to invest in Eaton stock during a period when its price fell more than 15 percent, the U.S. Court of Appeals for the Sixth Circuit ruled Jan. 8.

Source: Bna.com (registration may be required), January 2018

Vanderbilt Can't Shake Suit Over Retirement Plan Fees

Abstract: Vanderbilt University is the latest school to lose an early round in litigation challenging the fees and investment options in its retirement plan. A federal judge on Jan. 5 largely refused to dismiss a proposed class action accusing the school of running a retirement plan with excessive administrative fees, too many service providers, and high-fee investment options.

Source: Bna.com (registration may be required), January 2018

Settlement Agreement May Conclude Allianz Self-Dealing Challenge

Abstract: Along with non-monetary relief, Allianz will pay $12 million into a common fund for the benefit of class members, to be allocated pro rata among the members in proportion to their account balances in the plan during the relevant period.

Source: Plansponsor.com, December 2017

Noteworthy Federal Cases Relating to Employee Benefit Plans in 2017

Abstract: Here is a round up of cases decided by the U.S. Supreme Court and the First and Second Circuit Courts of Appeals in 2017 involving ERISA employee benefit plans.

Source: Employeebenefitsupdate.com, December 2017

Stable Value Lawsuits and the Goldilocks Zone

Abstract: Even though there is no typical stable value fund, heading into 2018 there have been three typical types of lawsuits filed against fiduciaries offering stable value funds, according to ERISA attorneys with Mayer Brown.

Source: Planadviser.com, December 2017

Plaintiffs Lack Standing to Bring ERISA Fee Litigation Case

Abstract: A federal district court in Georgia dismissed claims by participants in Delta Air Lines 401k plan who alleged that Delta breached its ERISA fiduciary duties by allowing the plan to invest in funds that allegedly charged excessive fees and unperformed against comparable funds. Consistent with rulings in other jurisdictions, the court held that plaintiffs lacked Article III standing because they failed to allege that they were invested in the challenged funds or that they paid excessive fees.

Source: Erisapracticecenter.com, December 2017

ERISA Litigation Landmarks Set the Stage for 2018

Abstract: One ERISA attorney who specializes in defending employers against fiduciary breach claims says 2017 has delivered no shortage of important, potentially precedent-setting decisions involving employee benefits law; and the stage is set for another whirlwind of a year in 2018.

Source: Planadviser.com, December 2017

Princeton Retirement Plan Lawsuit Paused by Judge

Abstract: A lawsuit challenging the fees and investment options in Princeton University's retirement plan will be put on hold until a federal appeals court considers a similar case against the University of Pennsylvania.

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

Sixth Circuit Holds That a Divorce Decree Should Be Treated as a QDRO

Abstract: Upon reviewing the case, the Sixth Circuit Court of Appeals stated that the divorce decree suffices as a qualified domestic relations order that "clearly specifies" plaintiff as the beneficiary under ERISA, 29 U.S.C. Section 1056(d)(3)(C), so that plaintiff is entitled to the benefit from the plan specified in the divorce decree.

Source: Erisalawyerblog.com, December 2017

Fifth Circuit Borrows One-Year Statute of Limitations for Section 502(c)(1) Claim

Abstract: The Fifth Circuit held that the statute of limitations for an ERISA Section 502(c)(1) claim -- a claim for penalties for failure to provide certain documents within thirty days of a written request -- was subject to a one-year statute of limitations.

Source: Erisapracticecenter.com, December 2017

Summary of Legal Actions Against the DOL Fiduciary Rule

Abstract: Since the DOL put the final rule redefining an investment advice fiduciary under ERISA into effect, there have been six lawsuits filed in four federal courts. The goal? To vacate the fiduciary rule in whole or at least in part. This chart reviews what has happened with these lawsuits.

Source: Columbiathreadneedleus.com, December 2017

Aon Hewitt Can't Escape Safeway's 401k Fee Lawsuit

Abstract: Aon Hewitt Investment Consulting must defend allegations that it acted imprudently by selecting and monitoring certain investment options, including JPMorgan's target-date funds, in Safeway's 401k plan.

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

Participant Alleges Design Flaw in Proprietary Fund Suit

Abstract: An alleged "built-in" flaw in fund design has drawn a fiduciary breach suit by a plan participant. The suit (Birse v. CenturyLink, Inc., D. Colo., No. 1:17-cv-02872, complaint filed 11/30/17) was filed in the U.S. District Court for the District of Colorado.

Source: Asppa.org, December 2017

ERISA Stock Drop Cases Since Dudenhoeffer: The Pleading Standard Has Been Raised

Abstract: Some ERISA commentators initially viewed Dudenhoeffer's overruling of the Moench presumption of prudence as a win for plaintiffs in ERISA stock drop cases. As the lower federal courts have applied Dudenhoeffer's revised pleading standards, however, it has become clear that this is not the case.

Source: Truckerhuss.com, December 2017

Excessive Fee Suit Targeting Fujitsu Results in Sizable Settlement

Abstract: The lawsuit contended that among defined contribution plans with more than $1 billion in assets, the average plan has costs equal to 0.33% of assets per year; in 2013, total fees for the Fujitsu plan amounted to approximately 0.88% of plan assets.

Source: Plansponsor.com, December 2017

Employer's Failure to Deduct Plan Loan Repayments Resulted in Deemed Distribution

Abstract: This is a cautionary tale of how a poorly administered participant loan program can result in adverse tax consequences to participants. While this participant's reasonable reliance on the employer and recordkeeper allowed her to avoid the accuracy-related penalty, it did not protect her from the deemed distribution.

Source: Thomsonreuters.com, December 2017

CenturyLink Accused of Giving Workers Bad 401k Investment

Abstract: A new lawsuit claims CenturyLink offered its workers a poorly managed and underperforming stock fund in their 401k plan that caused them to lose out on retirement savings.

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

Outside Plan Counsel -- When Should I Call?

Abstract: It doesn't make sense to consult your ERISA plan counsel about ordinary recordkeeping and testing matters, but here is a list of issues that call for legal advice from an expert at the earliest possible time.

Source: 401ktv.com, December 2017

Union 401k Retirement Plan Latest Target of Fee Litigation

Abstract: The flurry of litigation over 401k plan fees has reached a new frontier: a union retirement plan covering more than 27,000 Teamsters and other union workers. The proposed class action, filed Nov. 30 in a California federal court, targets the trustees of the Supplemental Income 401k Plan, a $921 million union retirement plan based in California.

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

The Latest Targets of 401k Fee Lawsuits

Abstract: A new front has opened in the retirement plan litigation battle, this one involving the 27,178-member Supplemental Income 401k Plan, a union-sponsored multiemployer plan with almost $1 billion assets.

Source: 401kspecialistmag.com, December 2017

American Airlines Can't Nix Retirement Plan Investment Lawsuit

Abstract: American Airlines must defend a lawsuit accusing it of violating federal benefits law by offering an allegedly poorly performing investment fund in the airline's 401k plan. The participants have sufficiently pleaded claims to survive American's motion to have the case dismissed Judge says.

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

Wells Fargo Sued Over In-House 401k Funds, Again

Abstract: Wells Fargo is once again in the crosshairs of a proposed class action challenging the in-house investment funds in the company's 401k plan.

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

NYU Hit with Second Excessive Fee Suit

Abstract: If at first you don't succeed, try, try again seems to be the motto used in a new class action lawsuit filed against New York University alleging breach of fiduciary duties for excessive plan fees in the school's retirement plans.

Source: Ntsa-net.org, November 2017

Fidelity Gets Industry Support in Stable Value Fund Appeal

Abstract: The Securities Industry and Financial Markets Association is urging a federal appeals court to reject a legal challenge to Fidelity's stable value fund, which 401k investors accused of carrying excessive fees and using an unduly conservative investment strategy.

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

Nordstrom Sued Over Excessive Fees in Its $2.8B 401k Plan

Abstract: Nordstrom is the latest large company accused of violating federal benefits law by allegedly selecting and retaining high-cost investment options in its $2.8 billion 401k plan when lower-cost options were available.

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

Franklin Templeton, Execs Sued Over High 401k Fees

Abstract: Franklin Resources and more than a dozen of its executives are accused of violating federal benefits law by allegedly causing the company's $1 billion 401k plan to invest in high-cost, poorly performing in-house funds when better investments were available.

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

Thrivent, DOL Both Win in Fiduciary Rule Case

Abstract: Unlikely as it would seem, both Thrivent Financial and the DOL could be considered winners when a U.S. District Court judge on November 3, 2017, granted an injunction against a key aspect of the DOL's investment fiduciary guidance.

Source: Ascensus.com, November 2017

Chapter 13 Debtor Can Put Earnings Into 401k

Abstract: Chapter 13 debtors can deduct 401k contributions in calculating their disposable income that must be contributed to a payment plan, even if they weren't contributing in the six months prior to the bankruptcy, an Illinois bankruptcy judge ruled Oct. 30.

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

Plan Sponsor Fee Litigation Cases on the Rise

Abstract: There are three main types of excessive fee litigation: 1) Excessive fee litigation involving lawsuits against large corporate plan sponsors challenging fees and expenses associated with employee plans. 2) Excessive fee litigation involving lawsuits against financial institutions who also happen to be plan sponsors. 3) Excessive fee litigation involving university-sponsored 403b plans. This article examines each of these three types of excessive fee lawsuits.

Source: Groom.com, November 2017

GE Hit With Second Lawsuit Over 401k Plan Investments, Fees

Abstract: General Electric faces a second lawsuit challenging the allegedly imprudent investments in proprietary mutual funds included in the company's $28 billion 401k plan. GE's selection of in-house mutual funds for the plan allegedly provided its financial services subsidiary, GE Asset Management, a constant source of fees and helped inflate GEAM's market value for a subsequent sale of the subsidiary, according to a lawsuit.

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


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