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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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ERISA Complaint Questions Alternatives Use in Custom TDF

Abstract: As it awaits the results of a Supreme Court appeal on another case scrutinizing its investment decisions, Intel Corporation now faces an additional lawsuit questioning the fees and performance of custom target-date funds offered to its defined contribution retirement plan participants.

Source: Planadviser.com, August 2019

Walgreen Sued for Keeping Underperforming TDFs in 401k

Abstract: A group of current and former participants in the Walgreen Profit-Sharing Retirement Plan, individually and as representatives of a class of participants and beneficiaries of the plan, have filed a lawsuit on behalf of the plan for breach of fiduciary duties under ERISA. Despite a market "teeming with better-performing alternatives," the plaintiffs say, Walgreen selected the Northern Trust Funds, which already had a history of poor performance.

Source: Planadviser.com, August 2019

Cross-Selling Gaining Prominence in Retirement Plan Lawsuits

Abstract: Cross-selling by recordkeepers has become a hot-button issue in retirement plan lawsuits, raising broader awareness and questions around how service providers can use participant data.

Source: Investmentnews.com (registration may be required), August 2019

Walgreens Hit With $300 Million 401k Lawsuit Over Target-Date Funds

Abstract: Walgreen Co. has been hit with a lawsuit alleging its "imprudent" decision to keep certain target-date funds in its 401k plan caused employees to lose $300 million in cumulative retirement savings. Plaintiffs claim the Northern Trust funds led to a "swift and devastating blow" to participants' retirement savings.

Source: Investmentnews.com (registration may be required), August 2019

Are Your Target-Date Funds a Lawsuit Waiting to Happen?

Abstract: Target-date funds may be the ticking time bomb of ERISA litigation. If fiduciaries have any doubt that these funds are in the crosshairs, they should take a look at the website of litigation firm Cohen Milstein, which has a whole section titled "Investigation of Target-Date Fund Investments." Cohen Milstein says it is looking at four factors.

Source: Cohenbuckmann.com, August 2019

Plan Administrator Deemed an ERISA Fiduciary

Abstract: The Fourth Circuit Court of Appeals, in Dawson-Murdock v. Nat'l Counseling Group, Inc., has allowed a life insurance beneficiary to sue her husband's employer for breach of fiduciary duties concluding that she had sufficiently alleged that the employer was an ERISA fiduciary.

Source: Wagnerlawgroup.com, August 2019

Court Denies Dismissal of Kaleida Health Excessive Fee Suit

Abstract: In a case alleging fiduciaries of Kaleida Health's 403b and 401k plans failed to take advantage of the plans' bargaining power by only offering actively managed retail mutual funds as investment options instead of identical investor class mutual funds with lower operating expenses, a federal court judge has denied motions to dismiss.

Source: Planadviser.com, August 2019

Schlichter Says Retirement Savings "Squandered" in Quid Pro Quo

Abstract: The law firm of Schlichter Bogard & Denton, LLP filed papers opposing a motion by fiduciary defendants of the MIT Supplemental 401k Plan for a summary judgement in the suit initiated in 2016 as one of the first university excessive fee cases. Not only did they file papers, they issued a press release, drawing attention not only to the filing, but to an allegation made in the initial suit -- one that distinguishes it from the nearly two dozen such cases filed and fought over the past three years -- that there was a quid pro quo between MIT and Fidelity, the plan's recordkeeper.

Source: Napa-net.org, August 2019

Another Big University 403b Plan Settles With Schlichter

Abstract: While disputing allegations and denying liability, plan fiduciaries have announced the second largest monetary settlement to date regarding a university retirement plan. This settlement -- for $14,000,000 -- involves the $4.3 billion Johns Hopkins University 403b Plan, a suit brought by the law firm of Schlichter, Bogard & Denton as part of the first wave of these suits.

Source: Napa-net.org, August 2019

Fidelity Dogged Again by 401k Quid-Pro-Quo Allegations

Abstract: Fidelity Investments has again been accused of engaging in a quid-pro-quo type relationship with a 401k plan sponsor, which allegedly cost employee retirement savers millions of dollars in return for bigger profits. The latest episode involves the Massachusetts Institute of Technology, which has been accused of retaining Fidelity's 401k record-keeping services and investment funds, despite counsel to do otherwise from attorneys and consultants, with the expectation that Fidelity and co-owner Abigail Johnson would make a large donation to the university.

Source: Investmentnews.com (registration may be required), August 2019

Fidelity Ensnared in MIT 401k Quid Pro Quo Allegations

Abstract: The high-profile managing partner of Schlichter Bogard & Denton filed opposition papers Monday in Massachusetts federal court claiming MIT "ensured that Fidelity received millions of dollars of excessive payments from MIT's 401k Plan." MIT made those payments, the filing says, in part because of an expectation that Abigail Johnson, Fidelity Investment's CEO and co-owner, would donate to MIT.

Source: 401kspecialistmag.com, August 2019

Federal Judge Dismisses ERISA Fiduciary Breach Claim against University for Lack of Standing

Abstract: A federal district court judge in Washington D.C. dismissed an ERISA fiduciary breach suit brought by a former employee of George Washington University, finding the former employee lacked standing to sue. The plaintiff, Melissa Stanley, participated in two GW administered retirement plans, and brought multiple claims for breach of fiduciary duty against the school. The case's dismissal comes amid increased litigation targeting higher education retirement plans for fiduciary breaches and follows a similar wave of litigation over private sector 401k plans.

Source: Williamsmullen.com, August 2019

Trend of Excessive Fee Suits Against Smaller Plans Continues

Abstract: When the wave of excessive fee cases began against retirement plan sponsors, most targeted large or mega plans, based on assets. However, a new case against TriHealth Inc. continues a trend of targeting smaller plans.

Source: Planadviser.com, August 2019

Marcia Wagner is Not Tom Clark, Judge Rules

Abstract: A federal judge has rejected an attempt by the Schlichter law firm to disqualify Marcia Wagner as an expert witness in an excessive fee case.

Source: Napa-net.org, July 2019

Lawsuit Challenges Use of Money Market Fund, Actively Managed Funds in 401k

Abstract: The complaint accuses BBVA Compass of mismanaging a $100 million money market fund "that was the investment equivalent of stuffing cash into a mattress" and failing to properly monitor investments and remove imprudent ones.

Source: Planadviser.com, July 2019

How Much (Should) a New Retirement Plan Committee Member Know?

Abstract: A recent federal court decision should remind us all of the importance of plan committee education. The case involved a suit by participants in the SunTrust 401k plan that challenged the initial selection of, and subsequent acquiescence with, an ostensibly imprudent plan investment menu. The court's decision focused on one aspect of the case: the liability of "new" plan committee members for actions that predated their involvement on the committee but continued after their involvement.

Source: Napa-net.org, July 2019

SunTrust Wins Narrow Summary Judgement in Long-Running ERISA Suit

Abstract: A federal court has rejected the argument that defendants were aware that their predecessor fiduciaries had breached their duties in selecting affiliated funds and thus that they breached their own duties by failing to take adequate steps to remedy the original alleged breaches.

Source: Planadviser.com, July 2019

Is Fiduciary Responsibility Retroactive?

Abstract: A federal judge has weighed in on a question relevant to new plan committee fiduciaries: When and how does their liability for the decisions of previous committee members begin?

Source: Napa-net.org, July 2019

Adidas Sued Over Excessive Fees for 401k Participants

Abstract: Participants in the Adidas Group 401k Savings and Retirement Plan have filed a proposed class action lawsuit against Adidas America over the plan's administrative and investment fees. According to the complaint, for every year between 2013 and 2017, the administrative fees charged to plan participants were greater than a minimum of approximately 75% of its comparator fees when fees are calculated as cost per participant. And for every year between 2013 and 2017 but two, the administrative fees charged to plan participants were greater than 80% of its comparator fees when fees are calculated as a percent of total assets.

Source: Planadviser.com, July 2019

ERISA Litigation's Next Big Thing

Abstract: While there are many prudence and cost-efficiency related issues relating to variable annuities overall, an emerging issue involves the plan sponsor’s ability to carry out its fiduciary duties under ERISA. Variable annuities usually include numerous sub-accounts as investment options. This increases the odds of finding sub-accounts that are not prudent and need to be removed.

Source: Iainsight.wordpress.com, July 2019

Study Finds That Determination of Fiduciary Breach Often Hinges on Whether Fiduciary Followed a Prudent Process

Abstract: The Center for Retirement Research at Boston College recently released a study outlining the major causes of 401k lawsuits. In particular, the study focuses on the fact that these types of lawsuits often hinge on whether the plan fiduciary was following a "prudent" process and how one would define a process as prudent. With most companies now offering 401k plans as their primary retirement offering, it's wise to pay attention to the major findings and engage ERISA counsel to guide implementation of a fiduciary legal compliance paradigm to mitigate exposure to these costly lawsuits.

Source: Hallbenefitslaw.com, July 2019

Without Infrastructure Fees, Recordkeepers Would Go Out of Business

Abstract: This was one of Fidelity's arguments in a memorandum to support its motion to dismiss a consolidated lawsuit alleging it is receiving "secret" or "kickback" payments from providers on its FundsNetwork platform. Several lawsuits filed against the firm claim the payments were presented as infrastructure payments, or so-called relationship-level fees, in violation of the prohibited transaction rules of ERISA, as well as the statute's fiduciary rules.

Source: Planadviser.com, July 2019

The Case That Almost Demolished the Retirement Plan Regulatory System

Abstract: The U.S. Supreme Court has ruled in Kisor v. Wilkie, a case not specifically about retirement plans or the Employee Retirement Income Security Act, but which nonetheless could have resulted in the total upheaval of the retirement plan regulatory system established by the Department of Labor under ERISA.

Source: Napa-net.org, June 2019

Supreme Court Agrees to Hear Intel Case With Potentially Significant Implications for 401k Plan Fiduciaries

Abstract: The issue to be decided by the Supreme Court is whether the receipt by a plan participant of investment disclosures is enough for that participant to have "actual knowledge" of a potential claim, which would start the statute of limitations. In light of such a pending decision, retirement plan fiduciaries may be left wondering what actions need to be taken to ensure plan participants have "actual knowledge" of information contained in the various ERISA required disclosures.

Source: Jdsupra.com, June 2019

Supreme Court Will Take Another Look at Its ERISA Stock-Drop Pleading Standard

Abstract: ERISA stock-drop litigation has diminished in recent years due to the Supreme Court's Dudenhoeffer decision (and a rising stock market). Now, the Court will have another chance to weigh in on whether federal ERISA litigation in this space should breathe new signs of life.

Source: Erisa-employeebenefitslitigationblog.com, June 2019

Gucci Plaintiffs Bag Settlement in Excessive Fee Suit

Abstract: A relatively small plan has settled claims that fiduciaries had "imprudently incorporating funds on its menu that were excessively expensive." The defendant plan in question is the $96.5 million 401k plan of Gucci America Inc. and the settlement is for $1.2 million.

Source: Napa-net.org, June 2019

Eighth Circuit Invokes Dudenhoeffer to Reject Fiduciary Claims in Stock Drop Case

Abstract: Another federal appellate court has relied on the U.S. Supreme Court's Dudenhoeffer decision to affirm the dismissal of a stock drop case alleging breach of fiduciary duty based on publicly available information.

Source: Thomsonreuters.com, June 2019

Index Fund Rise Coincides With 401k Suits

Abstract: More 401k lawsuits were filed in 2016 and 2017 than during the 2008 financial crisis, and the steady drumbeat of litigation could be affecting how workers save and invest. For one thing, the suits have coincided with a dramatic increase in equity index funds, according to a report by the Center for Retirement Research. Last year, nearly one out of three U.S. stock funds were index funds, double the share 10 years ago.

Source: Bc.edu, June 2019

MFS Settles 401k Lawsuit for $6.9 Million

Abstract: Investment manager Massachusetts Financial Services Co. has reached a settlement of nearly $7 million in a lawsuit alleging the company enriched itself at the expense of employees' retirement savings by loading its 401k plans with costly, underperforming in-house funds.

Source: Investmentnews.com (registration may be required), June 2019

Do Your Participants Read Their Plan Documents? Why It May Matter

Abstract: How long do participants have to sue for fiduciary breaches? Sometimes procedural cases can have a big impact on employee benefit plans. The Supreme Court has just agreed to review another case on the length of time participants have to sue for fiduciary breaches. This new case may also have a significant impact on fiduciary liability.

Source: Cohenbuckmann.com, June 2019

Appellate Court Affirms Award of 401k Benefits Under QDRO Issued After Participant's Death

Abstract: A federal appellate court has upheld a trial court's determination that a deceased plan participant's former spouse is entitled to part of the participant's 401k plan benefit, even though the participant had remarried and the qualified domestic relations order (QDRO) assigning benefits to the former spouse was issued after the participant's death.

Source: Thomsonreuters.com, June 2019

Judge Greenlights Nationwide Class Suing Over JPmorgan's 401k Fees

Abstract: Five former JPMorgan's employees accusing the bank of loading its employee 401k retirement plan with funds that had excessive fees can pursue their lawsuit against the bank on behalf of a nationwide class, a federal judge in Manhattan ruled.

Source: Reuters.com, June 2019

Supreme Court Will Again Review the Pleading Standard for Retirement Plan "Stock Drop" Claims

Abstract: The justices will review the Second Circuit's unexpected holding that a complaint, which alleged that plan fiduciaries violated ERISA by failing to disclose information about overvalued employer stock held in a 401k plan, satisfied the high "more harm than good" pleading standard enunciated in Fifth Third Bancorp v. Dudenhoeffer. If upheld, this ruling -- which runs contrary to the recent trend in employer stock drop cases -- likely would lead to an increase in filings of such cases and in the number of such cases that survive early motions to dismiss.

Source: Eversheds-Sutherland.com, June 2019

Supreme Court Will Again Review the Pleading Standard for Retirement Plan "Stock Drop" Claims

Abstract: The Supreme Court granted certiorari in a case from the 9th Circuit Court of Appeals involving the statute of limitations applicable to claims under ERISA. The issue to be decided by the Supreme Court is, what does it mean for a plan participant to have "actual knowledge" of a potential claim to start the running of the statute of limitations?

Source: Blankromeworkplace.com, June 2019

Ninth Circuit Rules That a Domestic Partner Under California State Law Was a Spouse for an ERISA Plan

Abstract: In an unpublished decision dated May 16, 2019, the Ninth Circuit held that a plan administrator abused its discretion by denying surviving spouse benefits under an ERISA retirement benefit plan to a participant's domestic partner.

Source: Seyfarth.com, June 2019

Plan's Investment in Flailing SunEdison Stock Did Not Violate ERISA

Abstract: A U.S. appeals court on Tuesday tossed out claims that a former SunEdison Inc subsidiary violated federal law by failing to dump the renewable energy company's stock from an employee retirement plan before it declared bankruptcy.

Source: Reuters.com, June 2019

IBM's Surprise Loss in 401k Stock Fight Heads to Supreme Court

Abstract: IBM convinced the U.S. Supreme Court to wade into a fight over IBM stock in the company's 401k plan. The justices agreed June 3rd to review a surprise decision from the U.S. Court of Appeals for the Second Circuit that allowed employees participating in the company's 401k retirement plan to move forward with a proposed class action lawsuit they filed in 2015 after IBM's stock dropped by seven percent.

Source: Bloomberglaw.com, June 2019

Excessive Fee Suit Appeal Runs Out of Time

Abstract: There's that old caution about being a day late, and a dollar short -- well, the plaintiffs in an excessive fee suit were two days late -- and missed a key date. Judge Collyer noted that the plaintiffs "...filed too late to comply with Federal Rule of Civil Procedure 59(e), which governs motions to amend or alter a judgment."

Source: Ntsa-net.org, June 2019

Supreme Court to Hear 401k Stock-Drop Case

Abstract: The Supreme Court accepted a 401k lawsuit Monday that could reframe how employers think about company stock in their retirement plans. Plaintiffs in the case, Retirement Plans Committee of IBM v. Larry W. Jander, allege that plan fiduciaries acted imprudently by continuing to offer IBM stock as an investment option to retirement plan participants despite knowledge of "undisclosed troubles" relating to the company's microelectronics business.

Source: Investmentnews.com (registration may be required), June 2019

Can Employees Release ERISA Fiduciary Breach Claims?

Abstract: Plan fiduciaries looking to avoid protracted court cases filed by their plan participants are trying to develop the best fiduciary practices. They are also considering other options to control or restrict litigation, including trying to require mandatory arbitration of ERISA claims, seeking to designate a specific court to hear cases, and setting shorter periods to file claims for benefits in their plan documents. The courts are still trying to define the extent to which there are limits on these practices. However, a recent court case highlights an additional option, obtaining releases from terminating employees that cover ERISA fiduciary breach claims.

Source: Cohenbuckmann.com, May 2019

An ERISA Litigation Conversation With Jerry Schlichter

Abstract: Jerry Schlichter's firm has remained highly active in the space, representing a variety of classes of plaintiffs suing their employers for alleged mismanagement of retirement plan assets. In this interview, Schlichter reflected on changes he has seen in the industry over the last five years. In his estimation, a lot of good has come from the significant amount of litigation that has occurred under ERISA. At the very least, he said, many participants in defined contribution (DC) retirement plans today pay lower fees for investments and recordkeeping.

Source: Plansponsor.com, May 2019

Law Professors Ask SCOTUS to Expand Court Choice in ERISA Suits

Abstract: Eleven law professors called on the U.S. Supreme Court to rule that companies can't unilaterally limit the courts in which workers can sue over their health and retirement benefits. The case asks whether benefit plans governed by ERISA can force lawsuits over plan benefits into the company's preferred court. These plan provisions -- called forum selection clauses -- violate the statute's policy of giving benefit plan participants "ready access to the Federal courts," the professors said in a May 28 brief filed by Sandals & Associates PC.

Source: Bloomberglaw.com, May 2019

Supreme Court Could Soon Consider Several ERISA Cases

Abstract: Marcia Wagner, founder and managing partner of the Wagner Law Group, recently offered PLANADVISER an overview of the current litigation landscape, pointing out that writs of certiorari have been filed with the U.S. Supreme Court in four cases involving DC retirement plans. The cases include examples of "stock drop" litigation, litigation about the burden of proof to establish loss, a case that tests the "actual knowledge" standard for statute of limitations purposes, and a case that examines pleading standards under ERISA.

Source: Planadviser.com, May 2019

Court Rejects Attempt to Certify Class Against Third-Party Plan Administrator Under ERISA

Abstract: ERISA claims can potentially involve significant amounts in controversy, and in an effort to broaden the pool of potential defendants, ERISA plaintiffs are often fond of arguing that the Supreme Court's Harris Trust decision makes a party's status as an ERISA fiduciary or nonfiduciary irrelevant in determining liability under ERISA. A recent case provides a reminder that fiduciary status can and does still matter and may be a defendant's ticket out of an ERISA class action.

Source: Lexology.com, May 2019

Does Your Retirement Plan Incorporate State Law Into the Plan? Check Your Spousal Benefit Obligations

Abstract: A recent, unpublished Ninth Circuit court opinion held that the Plan's choice of California law required the plan to provide spousal survivor rights to registered domestic partners, because California law affords registered domestic partners the same legal status as spouses, and because doing so did not conflict with any provision of the plan document, ERISA or the Internal Revenue Code. In light of the opinion, plan sponsors should examine their plan documents to determine whether or not choice of law provisions carry state domestic partner rights into their plan document, and if this is the case, should consult with counsel as to how that might impact their plan distribution and plan loan approval procedures, and QDRO procedures as well.

Source: Eforerisa.wordpress.com, May 2019

Lessons From the University of Pennsylvania Appeal

Abstract: Diligent fiduciaries can be sued even when they tried to do everything right and followed a prudent process. It is in their interest to have the case dismissed at the earliest possible stage to avoid a lengthy and expensive trial. And we have had dismissals in some recent cases, including a district court decision involving the University of Pennsylvania and decisions involving Georgetown and Northwestern University.

Source: Cohenbuckmann.com, May 2019

Small 401k Plan Faces Excessive Fee Lawsuit

Abstract: A participant in the Greystar 401(k) Plan has filed a proposed class action lawsuit against the property management firm alleging it breached its fiduciary duties under ERISA by allowing excessive administrative and investment fees to be charged. The less than $250 million plan is accused of failing to employ a prudent and loyal process in evaluating investment and administrative fees.

Source: Plansponsor.com, May 2019

Participants Failed to Show That Fund Manager's Discretion Made It a Fiduciary

Abstract: In this class action, a 401k plan participant sued an investment fund manager, claiming that the manager is an ERISA fiduciary that breached its duties by setting a low crediting rate for its stable-value fund to increase its own compensation. The manager denied that it was a fiduciary and argued that the relief requested for the alleged prohibited transaction was unavailable under ERISA. The trial court ruled in favor of the manager and dismissed the claims. Upholding the ruling on appeal, the Tenth Circuit explained that a service provider is not a fiduciary when merely following contractual terms set in arm's-length negotiations, and that unilateral action regarding plan management or assets does not trigger fiduciary status if the plan or participants have a meaningful opportunity to reject that action.

Source: Thomsonreuters.com, May 2019

Third Circuit Resuscitates Claims Against University 403b Plan Fiduciaries

Abstract: Over the past several years, the ERISA plaintiffs' bar has targeted university-sponsored 403b plans, arguing that the plan fiduciaries breached their fiduciary duties and engaged in prohibited transactions in connection with offering certain investment options and the administrative fees associated with such plans. The Third Circuit recently issued the first circuit court decision addressing these claims and, in doing so, issued a split decision that breathed new life into a case involving a 403b plan sponsored by the University of Pennsylvania.

Source: Erisapracticecenter.com, May 2019

BB&T Excessive Fee Suit Settlement Approved

Abstract: A $24 million settlement -- including an $8 million attorneys' fee for plaintiffs' counsel -- has been approved in an excessive fee suit. Judge Catherine C. Eagles of the U.S. District Court for the Middle District of North Carolina signed the final approval order in the case involving BB&T and a potential class of as many as 67,000 current and former workers.

Source: Napa-net.org, May 2019

Excessive Fee Suit Remand Triggers Review in Fiduciary Breach Case

Abstract: The successful appeal of an excessive fee suit dismissal has triggered a review of another decision. The suit, involving the University of Pennsylvania Matching Plan, was given new life following an appellate court's remand following dismissal by the district court.

Source: Napa-net.org, May 2019

Plaintiffs Get Reprieve in Excessive Fee Case

Abstract: The plaintiffs in an excessive fee case have managed to keep their case alive on appeal, in a case that also has an intriguing dissenting opinion. The suit was not only one of the first of the university 403b excessive fee suits to be filed, the district court decision, in favor of the fiduciary defendants for the University of Pennsylvania Matching Plan, had been cited in a number of these cases, including those that had been settled.

Source: Ntsa-net.org, May 2019

City National Liable for Self-dealing in 401k Plan - 9th Circuit

Abstract: A federal appeals court has affirmed the bulk of a $7.4 million damages award won by the U.S. Department of Labor against Los Angeles-based City National Corp for allegedly charging excessive fees for services provided to its profit-sharing plan.

Source: Reuters.com, April 2019

Schlichter Strikes Another Excessive Fee Settlement

Abstract: After extensive litigation, lengthy discovery, and protracted arms-length negotiations with the assistance of a national mediator, the parties in an excessive fee suit have announced the terms of their settlement agreement and once again, it's about more than lost money. Specifically, Vanderbilt University has agreed to pay a sum of $14,500,000 into a Settlement Fund, as well as "certain additional relief."

Source: Ntsa-net.org, April 2019

Settlement in Vanderbilt 403b Case Raises Plan Data Questions

Abstract: The extent to which individuals should have control over their personal information and the data they generate in the on-line world has seized center stage in our national conversation. A new proposed settlement in Cassell v. Vanderbilt Univ. highlights the importance of these issues in the retirement plan marketplace.

Source: Groom.com, April 2019

Fee Litigation 2018 Round-Up: Recent Developments and Best Practices to Mitigate Risk

Abstract: The enhanced role of 401k and 403b plans has put increased pressure on plan performance and, since 2006, has led to multiple waves of ERISA litigation challenging the fees and the selection of mutual fund and other investments offered in these plans. This article explores important fee litigation developments from late 2017 forward.

Source: Jacksonlewis.com, April 2019

Vanderbilt 403b Plan Suit Settlement Includes Non-Monetary Relief

Abstract: The parties in a lawsuit against Vanderbilt University and its 403b plan fiduciaries have filed a motion for preliminary approval of a settlement agreement. According to the settlement agreement, the Vanderbilt defendants will deposit $14,500,000 in an interest-bearing account to be used to pay the recoveries to class members, as well as class counsel's attorneys' fees and expenses, administrative expenses of the settlement, and the class representatives' compensation as described in the settlement. Vanderbilt will also conduct a request for proposals for a new recordkeeper, among other things.

Source: Planadviser.com, April 2019

Tussey v. ABB Closes With $55 Million Settlement; Complex Case Changed Views of Fees, Fiduciary Duty

Abstract: Tussey v. ABB, after winding through earlier settlement awards to the plaintiffs, two appellate hearings in the 8th Circuit, and double rejections by the U.S. Supreme Court, ultimately will be remembered both as a case about plan sponsors' fiduciary duties and one that defined how to quantify participant losses from related breaches. As a result, the retirement plan industry has moved in a unified way to press for reductions in service provider fees, opt for lower-cost share classes, and insist upon greater transparency for recordkeeping and asset management costs.

Source: Blr.com, April 2019

District Court Again Allows Safeway ERISA Lawsuits to Proceed

Abstract: The district court rules Safeway's dismissal motions conflate the principle that investment decisions should not be evaluated based on hindsight with the need to use historic information available at the time the decision was made.

Source: Planadviser.com, April 2019

Boeing Faces ERISA Lawsuit Over 737 MAX Issues

Abstract: Participants in a Boeing retirement plan have filed an ERISA lawsuit related to the Boeing 737 MAX airplane issues. The complaint says Boeing should have warned defined contribution plan participant invested in the company's stock that issues the company was having caused the stock price to be inflated.

Source: Planadviser.com, April 2019

401k Lawsuit Over Vanguard Fees Ends With $23.7 Million Settlement

Abstract: Health insurer Anthem, sued by employees who claimed its 401k retirement plan had excessive fees even though its provider was the Vanguard Group, has settled the case for $23.7 million.

Source: Investmentnews.com (registration may be required), April 2019

Pay to Play Lawsuits -- Issues for Plan Sponsors

Abstract: After briefly reviewing current "pay to play" litigation, the article takes up the question, "do these arrangements pose an ERISA prudence challenge for sponsor fiduciaries?" Bottom line: as with other 401k fee litigation, the key question is likely to be, is the plan overpaying for these services? And the answer to that question is likely to turn on the issue of fair market value and the cost of alternative solutions.

Source: Octoberthree.com, April 2019

Are Class-Action Waivers the Future of ERISA Plans?

Abstract: Thanks to a recent ruling by the Supreme Court, employers can now be confident that arbitration agreements and class action waivers are enforceable and do not violate the National Labor Relations Act. This debate started in 2011 with AT&T Mobility Servs. v. Concepcion, which held that arbitration provisions were enforceable when included in consumer contracts. It further held that these agreements barred participation in class action litigation. Employers began to adopt similar agreements to protect their plans against significant litigation.

Source: Hallbenefitslaw.com, April 2019

Service Provider Managing Stable-Value Fund Was Not a Functional Fiduciary

Abstract: In litigation involving a service provider's management of a stable-value fund that was included as an investment option for an employer retirement plan, the US Court of Appeals for the Tenth Circuit affirmed the district court's grant of summary judgment in favor of the service provider. The Tenth Circuit held that the service provider was not a fiduciary under the Employee Retirement Income Security Act of 1974 (ERISA), and therefore could not be held liable for alleged breaches of fiduciary duty. The court also concluded that the participant could not recover on his alternative claim alleging the service provider was a non-fiduciary party in interest that participated in a prohibited transaction because he failed to show the relief he sought was equitable under ERISA.

Source: Westlaw.com, April 2019

Court Orders Briefing in George Washington University ERISA Suit

Abstract: The question in the lawsuit, according to a federal judge, is whether the plaintiff has standing to sue, for one, because she signed a settlement agreement with the university, and also, the defendants claim, she has not proved harm in her challenges to investments used in the university's 403b plan.

Source: Plansponsor.com, April 2019

ERISA Fiduciary Breach Claims Against Smaller Plans Increase in 2018

Abstract: As plaintiffs' attorneys noticed the reductions in plan fees and the successful litigation on the part of large plans, they begin to use these negotiated reductions as evidence against smaller plans. These cases argue that, previously, fiduciaries had not been paying attention as plan fees crept out of control. There is now a clear pattern for ERISA litigation, making it profitable to pursue smaller plans.

Source: Hallbenefitslaw.com, April 2019

Oracle Granted Partial Summary Judgment in 401k Fees/Investment Option Case

Abstract: The US District Court for the District of Colorado granted partial summary judgment to 401k fiduciaries, holding that ERISA's six-year statute of repose barred some claims and rejecting challenges to the plan's fees.

Source: Employeebenefitsblog.com, April 2019

Tenth Circuit Upholds Great-West Stable Value Win in ERISA Case

Abstract: The U.S. Court of Appeals for the Tenth Circuit affirms a District Court's holding that Great-West Life & Annuity Insurance Co. was not a fiduciary with respect to its stable value fund, even though it announced the fund's credited rate quarterly.

Source: Hklaw.com, March 2019

Tenth Circuit Tosses Massive ERISA Fiduciary Suit

Abstract: A federal appeals court has affirmed summary judgment in a class action suit involving 270,000 plan participants across more than 13,000 plans. The suit was filed in 2015 by plaintiff John Teets, a participant in the Farmers' Rice Cooperative 401k Savings Plan, which had contracted with Great-West for recordkeeping, administrative and investment services.

Source: Napa-net.org, March 2019

Longest Running 401k Fee Lawsuit Ends in $55 Million Settlement

Abstract: Parties in the longest running 401k fee lawsuit have agreed to a $55 million settlement, bringing to near conclusion a 12-year case that's one of the best-known of its kind. The lawsuit, Tussey v. ABB, was among the initial tranche of lawsuits attorney Jerome Schlichter brought in 2006, alleging that employers had caused their employees to lose out on retirement savings due to overpaying for 401k plan services such as recordkeeping and investment management.

Source: Investmentnews.com (registration may be required), March 2019

Podcast: Attorney-Client Privilege in the Employee Benefit Plan Context

Abstract: Paul Hamburger, co-chair of Proskauer's Employee Benefits & Executive Compensation Group, and associate Joe Clark discuss how the attorney-client privilege rules apply in an employee benefit plan context. The attorney-client privilege allows for the free flow of information between an attorney and a client in order to insure that the client gets the best possible representation. We discuss the various specific rules that apply in the employee benefit plan context where information is often shared between attorneys and plan fiduciaries.

Source: Erisapracticecenter.com, March 2019

ERISA Plan Controversy - Rising Stakes for Those Unprepared

Abstract: In a presentation at McDermott's Employment and Employee Benefits Forum, Ted Becker and Chris Scheithauer explored the various ways that disgruntled employees file lawsuits with plaintiffs' lawyers. Lawsuits have been brought in cases alleging, imprudence in the management of plans, challenging fees, involving company stock, actuarial equivalence and more. They used recent cases such as, NYU, American Century Services and IBM, as examples of the various types of lawsuits and the important lessons employers can take away from them.

Source: Employeebenefitsblog.com, March 2019

Understanding the Importance of Recent 403b Erisa Settlements

Abstract: If the 403b excessive fee litigation continues along a trajectory similar to its 401k predecessors, then we can expect the recent 403b settlements to usher in a new volley of suits brought against institutions overseeing slightly smaller retirement plans than the billion-dollar-plus plans at issue in the first wave of 403b cases.

Source: Thompsoncoburn.com, March 2019

BlackRock Board Fights $100M ERISA Mismanagement Suit

Abstract: The BlackRock Retirement Savings Plan board urged a California federal judge Thursday to toss most of a putative class action accusing it of violating the Employee Retirement Income Security Act and costing participants over $100 million, arguing the board operated within the terms of its contracts. Plaintiffs Charles Baird and Lauren Slayton hit BlackRock Inc., its subsidiaries and board members, along with BlackRock's investment consultant Mercer Investment Counseling, with a sprawling, 134-page, 11 count amended complaint in August.

Source: Cohenmilstein.com, March 2019

Mixed Ruling in Oracle ERISA Suit Strongly Favors Defense

Abstract: Despite a setback for Oracle at the class certification stage, a new ruling out of a federal court in Colorado pushes back strongly against many -- but not all -- of the plaintiffs' claims.

Source: Planadviser.com, March 2019

MIT 401k Plan Participants Not Entitled to Jury Trial of ERISA Breach of Fiduciary Duty Claims

Abstract: The District of Massachusetts court struck the plaintiffs' jury-trial demand in their ERISA complaint for damages and equitable relief against 401k plan fiduciaries. The court followed the "great weight of authority" in ruling that there is no right to trial by jury in ERISA actions for breach of fiduciary duty.

Source: Mwe.com, March 2019

Appeals Court Rejects Disney 401k Participants' Fiduciary Breach Complaint

Abstract: A federal appeals court unanimously rejected a complaint by participants in a Walt Disney Co. 401k plan that fiduciaries violated their duties by offering the Sequoia Fund, a mutual fund that several years ago plummeted in net asset value.

Source: Pionline.com, March 2019

Respondeat Superior in the ERISA Context

Abstract: Respondeat superior is a doctrine that a party is responsible for (has vicarious liability for) acts of their agents. Respondeat superior claims in the ERISA context may be made in one of two ways. While there is no circuit split on this issue, there is a split of authority as to the manner in which these claims should be addressed. This article considers these rulings.

Source: Wagnerlawgroup.com, March 2019

Fiduciaries Get Final Win in Lawsuit Over Disney 401k Investment in Sequoia Fund

Abstract: In their second amended complaint, the plaintiffs argued that the Sequoia Fund purported to be a value fund, but increased investments in Valeant Pharmaceuticals created a "clear indicia of a growth stock," and did not meet the Sequoia Fund's purported investing criteria of seeking out value stocks.

Source: Planadviser.com, March 2019

Wong vs. Fidelity -- A Sign of the Times

Abstract: A class action complaint1 was filed by Andre Wong, et al, representing the T-Mobile USA, Inc. 401k Retirement Plan against Fidelity Management & Research and a number of its affiliates for self-dealing and a breach of fiduciary responsibility. This could produce unintended consequences of limiting investment choices to participants in the future.

Source: Chaoco.com, March 2019

Intel Asks U.S. Supreme Court to Rule on ERISA Breach Case

Abstract: Intel's investment policy committee asked the court to review litigation involving a participant in two Intel defined contribution plans. The participant alleged that plan managers violated their ERISA obligations by offering too many alternative investments in the plans' lineups and that the plans' disclosures of investment information were inadequate. The investment policy committee has argued that the participant missed the three-year deadline for filing ERISA claims.

Source: Pionline.com, March 2019


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