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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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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

University 403b Plan Fees and Investments Under Scrutiny

Abstract: Over the past year, 16 private universities became the target of lawsuits alleging breaches of fiduciary duty with respect to 403b plan fees and investment options. This article reviews some of the key topics covered by the allegations in the cases grouped by trends in the district courts' rulings to date.

Source: Hodgsonruss.com, October 2017

Northrop Grumman's $16.8m Deal Leads to $5.6M in Attorneys' Fees

Abstract: Law firm Schlichter Bogard & Denton was awarded $5.58 million in attorneys' fees following the $16.8 million deal it reached earlier this year in a case involving Northrop Grumman's retirement plans.

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

Xerox Nixes Challenge to Robo-Adviser Fees in Ford 401k Plans

Abstract: Xerox HR Solutions escaped a lawsuit by participants in three Ford Motor Co. 401k plans challenging the allegedly excessive fees charged for investment advice provided by robo-adviser Financial Engines Advisors.

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

ERISA Preempts State Law Revoking Beneficiary Designation Upon Divorce

Abstract: Plan administrators must be alert to the risk of conflicting benefit claims. These claims raise the possibility of double-payment liability for any plan that disburses benefits, such as life insurance proceeds, without prior court approval. The judicial procedure called "interpleader," which was used by the plan in this case, can protect a plan facing conflicting claims.

Source: Thomsonreuters.com, October 2017

District Court Halts Some Portions of MIT ERISA Challenge

Abstract: Interpreting and applying a series of detailed recommendations from a magistrate judge, the district court will allow some parts of the litigation against MIT's retirement plan fiduciaries to proceed.

Source: Planadviser.com, October 2017

Employee Benefits in the Supreme Court

Abstract: Eversheds Sutherland took a look back at the Court's work in employee benefit cases since the enactment of ERISA. They found 128 decisions, spanning a broad range of statutory and constitutional issues. This white paper takes a detailed look at the numbers and dynamics behind these cases.

Source: Eversheds-Sutherland.com, October 2017

ERIC Challenges Oregon Reporting Requirements for Retirement Plans

Abstract: McDermott Will & Emery filed a lawsuit on behalf of the ERISA Industry Committee (ERIC) challenging new reporting requirements under Oregon law as applicable to retirement plans subject to ERISA.

Source: Employeebenefitsblog.com, October 2017

Excessive Fee Litigation Sets Sights on Corporate Retirement Plans

Abstract: Of all the industries facing these risks, few have seen more litigation than the financial industry which has faced a barrage of lawsuits over the in-house mutual funds in their respective 401k plans. Currently, there are more than 20 different financial institutions facing lawsuits challenging these in-house 401k investments.

Source: Willistowerswatson.com, October 2017

ERISA Excess Fee Litigation: Waiting for the Deluge

Abstract: ERISA fee litigation is moving downstream to smaller plans and that this ought to be a source of worry for small plan sponsors.

Source: Fiduciaryplangovernance.com, October 2017

Fidelity Found Not Liable in Excessive Fee Suit

Abstract: Participants of the of the Delta Family-Care Savings Plan sued Fidelity entities regarding excessive fees charged for the plan's advice offering as well as its self-directed brokerage account option.

Source: Planadviser.com, October 2017

Johns Hopkins Employees Advance Retirement Plan Fee Suit

Abstract: Johns Hopkins University is the latest prominent college to lose an early round in a lawsuit challenging the fees and investment options in its retirement plan.

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

Verizon Fee Disclosure Lawsuit Sees Most Claims Dismissed

Abstract: Verizon Communications is largely free of a proposed class action claiming it implemented an overly complex and risky investment structure for its defined contribution retirement plans and failed to explain how the plans charged fees.

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

Penn Succeeds in Dismissing Retirement Plan Proposed Class Action

Abstract: Since August 2016, sixteen elite colleges and universities have faced class action lawsuits related to management of their 403b retirement plans. After five cases previously survived motions to dismiss, the University of Pennsylvania became the first college to secure a complete victory when accused of retirement plan mismanagement.

Source: Erisa-employeebenefitslitigationblog.com, September 2017

Dismissal of Case Against UPenn Good News for 403b Plan Sponsors

Abstract: Colleges and universities have finally received some encouraging news in the recent spate of class action suits against higher education 403b plans. Last week a federal judge dismissed all claims against the University of Pennsylvania, marking the first time that one of these recent law suits has been be dismissed in full.

Source: Employeebenefitsupdate.com, September 2017

Lawsuits Targeting 403b Plan Fiduciaries

Abstract: Fiduciaries of 403b plans are increasingly facing the same type of litigation that mirrors other retirement plan fiduciary lawsuits. This results in fiduciaries facing liability from plan members even without the stricter ERISA standards.

Source: Bsllp.com, September 2017

GE Hit With Lawsuit Over High Fees in Its $28 Billion 401k

Abstract: General Electric is accused of filling its $28.5 billion 401k plan with high-cost, poorly performing in-house mutual funds, causing its employees to lose hundreds of millions of dollars in their retirement savings.

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

401k Lawsuit Attacks Excessive Advisory Fees Paid to UBS

Abstract: A company sponsoring a $157 million 401k plan has been sued for allowing unreasonably high fees to be charged for plan services, including advisory services provided by UBS.

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

Supreme Court May Have First ERISA-Free Term in Six Years

Abstract: The U.S. Supreme Court returns next week with nary an ERISA case on its docket and only a handful of significant petitions to watch. This is the second year in a row the justices have started their term with no Employee Retirement Income Security Act cases slated for oral argument.

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

University of Pennsylvania Wins Dismissal of Case Against 403b

Abstract: U.S. District Judge Gene E. K. Pratter of the U.S. District Court for the Eastern District of Pennsylvania dismissed all claims against the University of Pennsylvania and its vice president of human resources. The case had challenged multiple recordkeepers, multiple investment options and the use of retail share class funds.

Source: Planadviser.com, September 2017

Jerry Schlichter's Fee Lawsuits Have Left an Indelible Mark on the 401k Industry

Abstract: It's had a tremendous impact and brought awareness to the fees being charged in plans. But, observers say the litigation has also contributed to fee hysteria among employers and, following some large monetary settlements, resulted in a plaintiff's bar that seems to be unnecessarily piling on the litigation to score a quick payday.

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

Novitex Sued Over 401k Plan Fees, Not First Modest Plan Hit

Abstract: Novitex Enterprise Solutions is the latest company to be accused in federal court of letting its 401k plan participants be charged excessive recordkeeping and administrative fees. The lawsuit is the latest to target a company with a modest 401k plan.

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

Gucci Sued Over 401k Plan Fees, Transamerica Funds

Abstract: The lawsuit challenges Gucci's relationship with its 401k service provider, Transamerica Retirement Solutions. Gucci allowed Transamerica to fill its $96.5 million plan with expensive, proprietary funds that earned fees for Transamerica at the expense of plan participants, according to the complaint.

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

403b Litigation Concerns

Abstract: Over the last year, many colleges and universities have been the subject of lawsuits over the management of their 403b retirement plans. The complaints in the lawsuits have common threads and they identify patterns of high-risk practices. The courts have begun to weigh in on some of these issues, but their interpretations of the issues vary.

Source: Sentinelgroup.com, September 2017

Fiduciary Liability Defenses for Advisers Under ERISA

Abstract: If an investment adviser makes a recommendation to a retirement plan sponsor or investment manager, who then follows that recommendation and later challenges it as a breach of fiduciary duty, there are several types of defenses available to the adviser.

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

Voya Charged Big Fees to Small 401k, Lawsuits Says

Abstract: Voya Financial is accused in a new lawsuit of charging excessive recordkeeping and administrative fees to a small 401k plan.

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

Recent Plan Fiduciary Victories in ERISA Single-Stock Fund Litigation

Abstract: Over the last few months, there have been a significant number of court decisions ruling against plaintiffs alleging ERISA breach of fiduciary claims related to single-stock funds. These recent decisions suggest a new era in the ongoing saga of ERISA single-stock fund litigation, and one that may bode well for ERISA plan fiduciaries.

Source: Morganlewis.com, September 2017

Proving Loss Causation in Breach of Fiduciary Claims -- The Split Widens

Abstract: Most circuit courts of appeals agree that ERISA requires that causation between the alleged breach and the claimed loss must be established before any liability may be imposed upon a breaching fiduciary. The courts are split, however, as to whether an ERISA plaintiff or the defendant-fiduciary bears the burden of proving the causal link between breach and loss.

Source: Jacksonlewis.com, September 2017

Edison International Agrees to Pay $13.2 Million in 401k Fee Lawsuit

Abstract: Parties in the landmark Tibble v. Edison lawsuit have agreed the defendant, Edison International, will pay more than $13 million in damages to cover allegations of excessive 401k fees.

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

DST, Ruane Cunniff Sued Again Over Valeant Stock in 401k Plan

Abstract: Investment firm Ruane Cunniff & Goldfarb Inc. and DST Systems Inc. face a third lawsuit over the alleged imprudent investment of DST's 401k plan assets in Valeant Pharmaceuticals stock.

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

Morningstar and Prudential Deny Racketeering Claims

Abstract: Another ERISA lawsuit has emerged in federal court, this one naming both Morningstar and various Prudential companies as defendants in the U.S. District Court for the Northern District of Illinois. The complaint suggests the companies engaged in “Tammany-like” collusion to steer assets into more favorable investments; both providers have issued strong denials and requests for summary judgement.

Source: Planadviser.com, August 2017

NYU Retirement Plan Suit Trimmed by Judge but Moving Forward

Abstract: New York University convinced a federal judge to dismiss several challenges to its retirement plans, but claims attacking the plans' recordkeeping fees and actively managed funds are moving forward.

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

Excessive Fee Suit Alleges Fiduciary "Abdication"

Abstract: A new excessive fee suit claims that plan fiduciaries "abdicated" their responsibilities, allowing the plans' trustee "to lard the Plans with high-cost mutual funds."

Source: Napa-net.org, August 2017

Standing and Plausibility in ERISA

Abstract: A district court in New York has held that a plaintiff cannot assert claims against a plan in which she did not participate and cannot assert claims of fiduciary breach without plausible allegations of wrongdoing.

Source: Erisa-employeebenefitslitigationblog.com, August 2017

Edison Hit With $7.5m Judgment in Long-Running 401k Suit

Abstract: Edison International must pay more than $7.5 million to compensate employees for its decision to include high-fee retail share mutual funds in its 401k plan when identical institutional share classes were available at lower cost.

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

ERISA (7th Circuit): Are ERISA Plan Forum Selection Clauses Enforceable?

Abstract: ERISA gives plan beneficiaries a choice on where to bring suit seeking ERISA benefits. Section 1132(e)(2) allows plan beneficiaries to bring suit "in the district where the plan is administered, where the breach took place, or where a defendant resides or may be found." But what happens when the plan has a forum-selection clause? Are forum selection clauses enforceable?

Source: Boomerisablog.com, August 2017

Seventh Circuit Upholds ERISA Plan's Forum Selection Clause

Abstract: In a mandamus petition involving an issue of first impression, the US Court of Appeals for the Seventh Circuit held that ERISA's venue provision did not invalidate a forum selection clause in an ERISA-governed health plan.

Source: Westlaw.com, August 2017

Sears Hit With Second Lawsuit Over Company Stock in 401k Plans

Abstract: Sears Holdings was sued for the second time in a month over its decision to retain and continue purchasing its own declining stock as an investment option in the retailer's 401k plans

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

Participant Fails to Establish Class Status in Prudential Lawsuit

Abstract: A federal district court judge has denied class action status to an ERISA challenge filed by a retirement plan participant invested in a stable value product offered by Prudential. The denial of the class certification motion goes into some detail regarding what it takes to establish class standing under ERISA.

Source: Plansponsor.com, August 2017

What Hitchcock v. Cumberland Means for Plan Fiduciaries

Abstract: Earlier this year, the 6th U.S. Circuit Court of Appeals ruled that the participants in a university's pension plan do not have to exhaust administrative remedies before they pursue claims of ERISA violations. A recent blog entry discusses what this ruling means for plan fiduciaries.

Source: Asppa.org, August 2017

Arch Coal Beats ERISA Lawsuit Over Company Stock in 401k Plan

Abstract: Arch Coal defeated a lawsuit by employees accusing it of failing to divest their 401k plan of the company's stock during a three-year period when its value declined from $680 to $1.42 per share.

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

Winning Early Motions to Dismiss Breach of Fiduciary Claims, the Ministerial Defense

Abstract: One argument to use in seeking early dismissal of breach of fiduciary duty claims is the ministerial defense. The recent case that highlights the point is Turner v. Volkswagen Group of America, Inc.

Source: Boomerisablog.com, August 2017

Reliance Escapes Lawsuit Over SandRidge's 401k Stock Losses

Abstract: Reliance Trust isn't liable for the losses suffered by SandRidge Energy employees who invested their retirement savings in the natural gas company's stock as it declined into bankruptcy, a federal court ruled.

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

Target Defeats Challenge Over Company Stock in Its 401k Plan

Abstract: Target Corp. defeated a lawsuit by employees challenging the retailer's decision to allow company stock in its 401(k) plan despite allegedly knowing its value was artificially inflated because of its now-defunct Canada operations.

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

Voya's Win in 401k Fee Suit Bodes Well for Other Recordkeepers

Abstract: The dismissal of a lawsuit against Voya Financial for its relationship with 401k robo-adviser Financial Engines could be a harbinger of success for other major retirement-plan record keepers locked in similar legal battles.

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

Franklin Templeton 401k Challenge Gets Class Treatment

Abstract: Participants in the Franklin Templeton 401k Retirement Plan who sued the company over the plan's in-house mutual funds got permission to move forward as a certified class.

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

Plan Sponsor Admits to Stealing From 401k

Abstract: The owner of PCI, a commercial janitorial company that contracted with area school districts, and CDM, a company that performed construction and property management services in a metro area in Kansas, has pleaded guilty to theft from an employee benefit plan.

Source: Planadviser.com, July 2017

The Supreme Court Indirectly Stiffens a Fiduciary Breach Time Limit

Abstract: The Supreme Court appears to have barred equitable tolling under ERISA Section 413's six-year statute of repose for fiduciary breach claims, subject only to well-pled allegations and proof of fraud or concealment.

Source: Erisa-employeebenefitslitigationblog.com, July 2017

Sears Hit With 401k Class Action Over Company Stock

Abstract: Sears kept its own stock as an investment option in the 401k plan although it knew or should have known that the retailer was in "extremely poor financial condition," workers allege in a new lawsuit.

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

Appointing and Monitoring a 401k Investment Manager Under ERISA

Abstract: Employee-benefit attorneys advising retirement plan sponsors frequently mention that plan fiduciaries are not liable for the acts or omissions of an appointed investment manager, and aren't obligated to invest or otherwise manage plan assets subject to their oversight. However, a recent district court decision has implications for how retirement plan sponsors should monitor their adviser.

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

Tracking Down the Valid Claims-More Victories for 401k and 403b Fiduciaries

Abstract: Even responsible fiduciaries get caught in the net of retirement plan class action litigation. At least a few courts are carefully examining the conclusory allegations in these complaints and finding them wanting. It is too early to tell whether this is will be a trend in fee litigation, but responsible fiduciaries should be heartened by these victories.

Source: Cohenbuckmann.com, July 2017

MFS Investment Management Sued Over Claims of Self-Dealing in 401k Plans

Abstract: MFS Investment Management has been sued for self-dealing in its company 401k plans, becoming the latest fund firm to be targeted for stocking its retirement plan primarily with proprietary investments.

Source: Pionline.com, July 2017

Trial Lawyers Want to Defend Fiduciary Rule in Court

Abstract: Industry groups that support the Labor Department's fiduciary rule came out swinging in new legal briefs, one of which offers to defend in court a key provision of the rule that the DOL is no longer defending.

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

Voya Beats Lawsuit Over Stable Value Funds in Retirement Plans

Abstract: Voya Retirement Insurance and Annuity Co. beat a lawsuit accusing it of earning undisclosed profits by setting the crediting rate for its stable value funds in retirement plans for its own benefit.

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

Brown University Sued Over Retirement Plan Fees

Abstract: Brown University is accused of filling its two retirement plans with high-cost, poorly performing investment options, allegedly causing participants millions of dollars in losses.

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

DOL's New Stance on Fiduciary Rule at Odds in Thrivent Case

Abstract: Thrivent Financial for Lutherans stepped up its fight against the fiduciary rule's anti-arbitration condition that would bar class litigation against financial advisers by citing the Labor Department's latest court argument.

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

Marathon Petroleum Execs Sued Over Stock in Retirement Plan

Abstract: Marathon Petroleum executives are accused in a new lawsuit of wrongly allowing workers to invest their retirement savings in the stock of Marathon Oil Corp.

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

Pioneer Natural Resources Sued Over 401k Fees

Abstract: Pioneer Natural Resources USA is accused of choosing inappropriate, high-cost mutual funds in its 401k plan and paying Vanguard unreasonable, excessive recordkeeping fees.

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

Nationwide's 401k Recordkeeping Fees Are Excessive, Lawsuit Claims

Abstract: Nationwide has been sued for allegedly charging 401k plans excessive recordkeeping and administration fees in a lawsuit that also challenges the practice of assessing fees based on the amount of plan assets.

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

Waddell & Reed Sued Over In-House Funds in Its 401k Plan

Abstract: Waddell & Reed Financial Inc. is the latest financial services company accused of filling its workers' 401k plan with high-fee, poorly performing in-house funds, when less expensive, better performing outside options were available.

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

Washington University Sued Again Over Its $3.8B Retirement Plan

Abstract: Washington University in St. Louis was hit with a second lawsuit accusing it of filling its $3.8 billion retirement plan with duplicative, expensive, and underperforming investment options.

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

Putnam Beats Class Action Over In-House 401k Investments

Abstract: Putnam Investments defeated a class action challenging the allegedly high-fee proprietary investment funds in the company's 401k plan.

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

Fidelity Defeats Class Action Over Stable Value Fund

Abstract: Fidelity Management Trust is free of a class action by 401k investors who said the company's stable value fund carried excessive fees and used an unduly conservative investment strategy.

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

Revenue Sharing Spurring 401k Lawsuits With More to Come

Abstract: With the focus on 401k and 403(b) lawsuits, it may be time for employers sponsoring a corporate retirement plan to get out of the line of fire by eliminating revenue sharing altogether.

Source: 401ktv.com, June 2017

Allianz Workers Get Class Treatment in Suit Over 401k In-House Funds

Abstract: Allianz Asset Management of America L.P. workers won class certification on their lawsuit challenging the allegedly high-fee, in-house mutual funds in their 401k plan.

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

401k and 403(b) Lawsuit Update: Two Cases Settled and One Filed

Abstract: In what is becoming common place in the rash of 401k and 403(b) lawsuits, two cases were settled and one new one filed in the span of just one week. Northrup Grumman plan sponsors settled; a case against the Washington University 403(b) plan was filed; and Merrill Lynch settled claims against it by a plan sponsor.

Source: 401ktv.com, June 2017

401k Self-Dealing Suit Filed Against Capital Group

Abstract: The lawsuit claims that when selecting and retaining investment options in the plan, the Capital Group's benefits committee did not act prudently and solely in the interest of plan participants and beneficiaries, but put the interest of Capital Group and its subsidiaries first by selecting, retaining and failing to remove expensive group-affiliated investment options managed by CGTC, CRMC, and/or CII.

Source: Planadviser.com, June 2017

Northrop Grumman Settles Multi-Million Dollar 401k Fee Suit

Abstract: With the sting of defeat still fresh from a federal judge's dismissal of his Chevron suit, tort lawyer Jerry Schlichter bounced back with the announcement of a $16.75 million 401k fee settlement with Northrop Grumman.

Source: 401kspecialistmag.com, June 2017

Washington University Is 15th School Sued Over Retirement Plan

Abstract: Washington University in St. Louis is the latest college to face a proposed class action over the fees and investment options in its retirement plan.

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

Merrill Lynch to Pay $25M in Lawsuit Over Fees in Small 401ks

Abstract: Merrill Lynch, Pierce, Fenner & Smith Inc. will pay $25 million to settle a lawsuit that accused the broker-dealer firm of profiting from excessive fees charged to small 401k plans.

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

Another Court Dismisses Conclusory 401k Fee Suit

Abstract: We have now had a second case in Minnesota in which a judge looked under the hood and found no substance there. The Minnesota judge dismissed the case with prejudice (meaning plaintiffs won't have a second bite at the apple.) Is this the beginning of a trend?

Source: Cohenbuckmann.com, June 2017

Questioning 401k Lawsuits Based on Investment Outcomes

Abstract: No one can predict the excess return relative to a benchmark (Alpha) that is usually associated with active investment management. Then it should come as no surprise that no one can predict the market (beta). Choosing investments is a subjective endeavor. So why are so many legal actions and allegations against Employer Retirement Plans Sponsored Plans based on subjective endeavors with unknown outcomes?

Source: 401khelpcenter.com, June 2017

Lawsuit Filed for Retirement Plans Using United of Omaha GICs

Abstract: The lawsuit alleges United of Omaha breached its ERISA duties by improperly exercising its discretionary authority "to maximize its own compensation and retain large profits rather than crediting the participants and beneficiaries of the plans with appropriate returns."

Source: Planadviser.com, June 2017

Partial Victories to Two Universities in Their Motions to Dismiss Code Section 403(b) Fee Litigation

Abstract: Ddistrict courts in Georgia and North Carolina, respectively, ruled on defendants' motions under Henderson v. Emory University and Clark v. Duke University. Although the defendants in these cases has some success in eliminating certain causes of action, other causes of actions involving the payment of excessive fees and use of multiple recordkeepers will continue through litigation.

Source: Mwe.com, June 2017

Chevron Again Defeats Lawsuit Over Its $19 Billion 401k

Abstract: Chevron Corp. defeated for the second time a proposed class action accusing it of breaching fiduciary duties by allowing poorly performing investments that allegedly carried high management fees in its $19 billion 401k plan.

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

Wells Fargo Scores Rare Win in 401k Fee Litigation Series

Abstract: Wells Fargo & Co. defeated a proposed class action claiming the company stuffed its $35 billion 401k plan full of expensive and poorly performing target-date funds affiliated with the company.

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

Another Bundled 401k Provider Sued by Employees

Abstract: T. Rowe Price has become the latest bundled 401k provider accused of self-dealing in their 401k plan. A former employee has accused the Maryland based money manager of offering expensive, retail share classes to their plan participant/employees when other, less expensive share classes existed.

Source: Nwp401k.com, May 2017

Princeton Joins List of Schools Sued Over Retirement Plans

Abstract: Princeton University is the latest college to be hit with a proposed class action challenging the fees and investment options offered through the school's retirement plans.

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

University of Chicago Latest College Hit With Retirement Plan Suit

Abstract: The University of Chicago is accused in a new lawsuit of carrying high fees and offering a poor selection of investment funds in its two retirement plans ( Daugherty v. The University of Chicago).

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

Update on University Section 403(b) Cases: Inconsistent Rulings

Abstract: A novel theory proceeding in both the Duke and Emory cases is the claim that the defendants were imprudent to hire multiple recordkeepers, where consolidating services with one recordkeeper could have resulted in lower fees for participants.

Source: Benefitslawadvisor.com, May 2017

Courts' Interpretations of 401k Fiduciary Laws Are Changing

Abstract: It appears that laws of fiduciary prudence under ERISA are evolving. A recent district court decision, in Lorenz v. Safeway, demonstrates this point. The prudence requirement in being gauged based on the portfolio in aggregate but also on individual investment options.

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

Duke Is Second School to Lose Round in Retirement Plan Lawsuits

Abstract: A lawsuit accusing Duke University's retirement plan of high fees and poor investments is moving forward after a federal judge issued a mixed ruling on the school's motion to dismiss.

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

Breach of Fiduciary Duty Case Against University Survives Motion to Dismiss

Abstract: The U.S. District Court for the Northern District of Georgia issued the highly anticipated first ruling in the university breach of fiduciary duty cases. In Henderson v. Emory University, the court ruled that, for most of the claims asserted, the plaintiffs had properly stated a claim that survives the defendants' motion to dismiss.

Source: Ballardspahr.com, May 2017

Fourth Circuit Agrees: Fiduciaries' Faulty Process for Eliminating Stock Funds Did Not Cause Plan's Losses

Abstract: This case demonstrates that the "would have" standard for showing that a plan fiduciary's breach did not cause a loss is difficult, but not impossible, to satisfy. Making a prudent choice by an inadequate process, however, is just lucky. Plan fiduciaries are on much safer ground when they establish and carefully follow a prudent process.

Source: Thomsonreuters.com, May 2017

Emory Is First College to Lose in Retirement Plan Lawsuits

Abstract: Emory University must continue defending a lawsuit accusing its retirement plans of carrying high fees and offering poor investment options.

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

Fourth Circuit Upholds Ruling in Tatum v. RJR Pension Investment Committee

Abstract: The district court ruled that the defendant's breach of its duty of procedural prudence, occurring when the plan sold non-employer stock funds, did not cause the substantial losses in the retirement plan.

Source: Erisalawyerblog.com, May 2017

Are Your Target-Date Funds Making You a Target?

Abstract: Although participants' entire accounts may be invested in these funds, all too many TDFs are selected by fiduciaries simply because it is convenient, or there is some incentive, to offer their provider's funds. This makes them an easy target for class action lawyers. Custom TDFs, which are designed for an employer's specific participant group, are also vulnerable if they don't include appropriate investments.

Source: Cohenbuckmann.com, May 2017

Starwood Hotels Can't Escape ERISA Lawsuit Over 401k Fees

Abstract: Starwood Hotels must defend a proposed class action accusing it of violating federal benefits law by allegedly mismanaging the company's $1.2 billion 401k plan.

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

District Court Dismisses Allegations That Stable Value Fund is Too Conservative

Abstract: A district court in Rhode Island dismissed claims by participants in the CVS Employee Stock Ownership Plan that plan fiduciaries imprudently invested plan assets in the plan's stable value fund.

Source: Erisapracticecenter.com, May 2017

At the Intersection of the NFL Draft, ERISA, Divorce, Venue and Spousal Benefits

Abstract: Judge Woodlock, in the United States District Court for the District of Massachusetts, just issued an order on venue and QDROs in ERISA litigation that is a "must read" as a tutorial on a number of ERISA issues.

Source: Bostonerisalaw.com, May 2017

R.J. Reynolds Cleared Again in Nabisco 401k Stock Dump

Abstract: R.J. Reynolds Tobacco Co. once again escaped liability for losses suffered by its 401k plan when the company sold off the stock of its Nabisco subsidiaries.

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

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