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Edward A. Wodarczyk

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Lawsuits Continue Against Retirement Plan Fiduciaries

Edward A. Wodarczyk, Esq., ewodarczyk@tuckerlaw.com, (412) 594-3920

According to one report, more than 200 class action lawsuits have been filed against ERISA plan fiduciaries since 2015, with over 90 lawsuits filed last year alone. These recent lawsuits included lawsuits filed against smaller plans (e.g., plans with assets less than $100M).  Although the allegations vary per lawsuit, following is a list of the claims commonly alleged:

 

  • Fees paid from plan assets were excessive
  • Plan offered retail class fund options when it could have offered institutional share classes
  • Plan offered a money market as its cash preservation option, when a stable value fund would have offered a higher rate of return
  • Plan offered a stable value fund using an aggressive investment strategy, when a money market fund would have been less risky
  • Recordkeeping fees were paid as a percentage of plan assets, when flat dollar fees paid per participant would’ve been more appropriate
  • Inadequate disclosures about risk-based and target-date funds
  • Failure of the plan sponsor to retain excess revenue sharing on behalf of participants while allowing an outside vendor to retain excess profits
  • Failure to routinely conduct an RFP for recordkeeping services
  • Utilizing investment options with limited history

Plan fiduciaries should confirm that they have properly addressed these concerns if they have not already done so.  For more details about the litigation against ERISA fiduciaries, see report

For more information on how plan fiduciaries can avoid claims, Contact Ed Wodarczyk at ewodarczyk@tuckerlaw.com.

June 11, 2021

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