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441 Matching News Items |
| 1. |
Fidelity Settles Lawsuit with Own Employees Over 401(k) ERISA Allegations
The Lowenbaum Partnership and FRA PlanTools 
Aug. 12, 2014
"[The] settlement agreement provides for $12 million to be paid to the class and for .. affirmative relief [including]: [1] The Plan will make available a wide selection of both Fidelity and non-Fidelity mutual funds.... [2] Fidelity is increasing auto-enrollment for eligible employees from 3% to 7% of eligible compensation, and will default current participants who are currently deferring below 7% to 7% of eligible compensation. Fidelity will apply its match to those increased contributions. [3] The Plan shall provide that revenue sharing attributable to non-Fidelity mutual funds shall be credited to participants in the same way as revenue attributable to Fidelity mutual funds and collective trusts pursuant to the 8th amendment to the 2005 restatement of the Plan is credited to participants."
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| 2. |
Fidelity Files Motion to Dismiss Lawsuit Over In-House Plan
Plan Tools, LLC
June 3, 2013
"Fidelity makes the following non-exhaustive list of legal and factual arguments: [1] Plaintiff lacks constitutional standing to bring her claims because she was only invested in a small sub-set of a much larger group of Fidelity funds in the plan.... [2] Fidelity offered free advice to all participants to help them pick from the plan's lineup. [3] Between 2007 and 2011, Fidelity contributed $2.1 billion in employer contributions, which purportedly amounts to 10 times the alleged amount of excessive fees paid back to Fidelity from the plan's investments. [4] Prohibited Transaction Exemption 77-3 expressly allows a company like Fidelity to use its own mutual funds."
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| 3. |
Senators Urge Fidelity to Discontinue Bitcoin 401(k)s
The Tokenist
Nov. 21, 2022
"Senators Richard (Dick) Durbin, Elizabeth Warren, and Tina Smith sent a letter to Fidelity on Monday, November 21st, urging Fidelity to reconsider its exposure to cryptocurrencies. Their primary concern is with Fidelity's inclusion of Bitcoin into some of its 401(k) pension plans."
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| 4. |
Appeals Court Affirms Dismissal of Fidelity 'Infrastructure Fee' Lawsuit
Mercer
Mar. 24, 2021
"Fidelity describes the fee as compensation for the costs of maintaining the platform. But the plaintiffs alleged the fee is a 'pay-to-play' charge for access to Fidelity's retirement plan investors that violates Fidelity's ERISA fiduciary duties.... The appellate court, like the lower court, rejected all of the plaintiffs' theories for fiduciary status[.]" [In re Fidelity ERISA Fee Litigation, Wong v. FMR LLC, No. 20-1286 (1st Cir. Mar. 5, 2021)]
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| 5. |
New Fidelity Fee Decision Addresses Several Important Issues for Plan Fiduciaries
Groom Law Group
Apr. 13, 2020
"[T]he court's 67-page opinion addresses ... a plan fiduciary's obligations with respect to self-directed brokerage accounts and the consideration of collective investment trusts and separate accounts as alternatives to mutual funds. The court also ruled that relief may be available against Fidelity even if Fidelity's breach caused no harm to the Plan and did not result in any profit to Fidelity." [Moitoso v. FMR LLC, No. 18-12122 (D. Mass. Mar. 27, 2020)]
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| 6. |
Fidelity Beats Back ERISA Challenge: Infrastructure Fee Complaint Dismissed
Carlton Fields
Apr. 13, 2020
"The plaintiffs argued that Fidelity was a fiduciary because its decisions over the past several years to charge -- and increase -- the infrastructure fees showed that Fidelity had discretion over its own compensation. The court rejected this theory on the grounds that Fidelity negotiated the fees with the mutual funds and that the funds were not required to pass the fees on to the plans or participants." [In re Fidelity ERISA Fee Litigation, No. 19-10335 (D. Mass. Feb. 14, 2020)]
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| 7. |
Fidelity Wins Dismissal of ERISA Lawsuit Over 'Infrastructure Fees'
Mercer
Mar. 18, 2020
"Fidelity has won a dismissal of a class action brought by 401(k) plan participants over 'infrastructure fees' charged to third-party mutual funds on the company's investment platform. The plaintiffs alleged the company's imposition of the fees violates ERISA's fiduciary-duty rules. But the court dismissed all claims after finding Fidelity didn't act in a fiduciary capacity when setting the fees." [In re Fidelity ERISA Fee Litigation, No. 19-10335 (D. Mass. Feb. 14, 2020)]
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| 8. |
District Court Rules in Favor of Fidelity in Revenue Sharing Fee Litigation
Thomson Reuters Practical Law
Feb. 24, 2020
"[The court] granted Fidelity's motion to dismiss in litigation brought by 401(k) plan participants alleging that Fidelity breached its fiduciary duty to their respective plans and engaged in prohibited transactions under ERISA by charging mutual funds 'infrastructure fees' for access to Fidelity's FundsNetwork investment platform, which then passed those costs to the plans[.]" [In re Fidelity ERISA Fee Litigation, No. 19-10335 (D. Mass. Feb. 14, 2020)]
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| 9. |
Fidelity at Center of New Strategy for ERISA Breach Lawsuits
Pensions & Investments
July 22, 2019
"The litigation argues that Fidelity violated ERISA through offering competitors' mutual funds to Fidelity clients. The lawsuits by current and former DC plan participants focus on the adequacy of fee disclosure and whether record keepers are considered defined contribution fiduciaries. Plaintiffs alleged that Fidelity is a fiduciary and is charging 'secret' fees; Fidelity responded that it discloses the fees and that it isn't a fiduciary."
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| 10. |
Fidelity Says It's Entitled to Alleged 'Secret Payments' in 401(k) Plans
InvestmentNews; subscription may be required
July 10, 2019
"Fidelity ... [asked] a federal court to dismiss a lawsuit alleging the fees caused the Boston-based firm to profit at the expense of customers' retirement savings and breached its fiduciary duty.... [T]he fee is nothing more than an 'arm's length' payment negotiated with certain money managers, and such compensation negotiations don't mean Fidelity is acting as a fiduciary, the firm said. Fidelity negotiated its 'infrastructure fees' with asset managers on the FundsNetwork platform in 2017." [Wong v. FMR LLC, No. 19-10335 (D. Mass. defendant's memo in support of motion to dismiss filed Jul. 1, 2019)]
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| 11. |
Fidelity Faces Massachusetts State Inquiry Over Fees Charged for 401(k) Plans
Pensions & Investments
Mar. 4, 2019
"Fidelity Investments is facing more scrutiny over fees it charges some mutual funds for using its platform to access retirement plan customers. The Massachusetts ... securities division sent a letter on Feb. 27 to Boston-based Fidelity requesting information about those fees. The inquiry follows a Feb. 21 lawsuit against Fidelity by an investor in T-Mobile USA's 401(k) plan that claims the firm conceals so-called infrastructure fees."
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| 12. |
Fidelity Backs Away from Being 'Point in Time' Fiduciary for 401(k) Plans
Pensions & Investments
July 18, 2018
"Fidelity Investments no longer will serve as a fiduciary when it helps employers select investments for their 401(k) plans, moving away from a policy the firm adopted last year in response to the [DOL's] fiduciary rule.... Fidelity was the only record keeper that said it would adapt by providing services as a fiduciary under the new regime ... However, given the DOL rule's fate, the level of investment guidance is again considered non-fiduciary under ERISA, and Fidelity has distanced itself from the 'fiduciary' label as a result."
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| 13. |
Fidelity Puts 6 Million Savers on Risky Path to Retirement
Reuters; free registration may be required
Mar. 11, 2018
"While deposits in the trillion-dollar sector have surged, Fidelity has seen nearly $16 billion in net withdrawals over the past four years ... The exodus stems in part from unease with the way Boston-based Fidelity has boosted performance -- by ramping up risk.... Fidelity portfolio managers now try to time market shifts, for instance by moving billions of dollars out of money-losing commodities bets and into Chinese stocks and U.S. tech shares[.]"
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| 14. |
Fidelity Prevails in Suit Over Investment Costs, Robo-Adviser Fees
Bloomberg BNA
Sept. 26, 2017
"Fidelity Management Trust Co. and a subsidiary defeated a lawsuit by participants in Delta Air Lines Inc.'s retirement plan challenging alleged high-cost investment options and certain financial advisory fees. The participants failed to show that Fidelity exercised a fiduciary function over which share classes would be available to them through the brokerage account that would give rise to liability under [ERISA] ... The plan documents show that once Delta chose to include a brokerage account, Fidelity was bound to follow the participants' investment instructions and exercised no discretion or authority with respect to which shares they elected to buy[.]" [Fleming v. Fidelity Management Trust Co., No. 16-10918 (D. Mass. Sept. 22, 2017)]
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| 15. |
Delta Employees Sue Fidelity for 'Illegal Kickbacks' from Financial Engines
RIABiz
July 6, 2016
"The suit ... implies Fidelity breached its fiduciary duty by accepting part of Financial Engines' advice fee despite Financial Engines providing no advice ... The plaintiffs maintain that if Fidelity was not being paid then the fee that Financial Engines would charge would be substantially less.... The lawsuit employs similar logic in alleging that Fidelity is acting illegally by offering retail classes of shares to investors when institutional shares exist, alleging that the aggregation of all the retail accounts equals one big institutional account."
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| 16. |
DOL Rebukes Fidelity's Float Practices in Court Filings
Bloomberg BNA
Mar. 3, 2016
"Fidelity's controversial practice of keeping 'float' income earned off the 401(k) plans it manages will go before the U.S. Court of Appeals for the First Circuit March 8 ... In a brief filed with the court, the DOL argued that [ERISA] bars Fidelity from keeping undisclosed interest generated from plan disbursements held temporarily in overnight accounts -- commonly referred to as 'float.' According to the department, the district judge who let Fidelity off the hook in this case improperly focused on whether the float income qualified as a 'plan asset' under ERISA.... If the First Circuit takes the department's advice and reverses the district judge, it will create a circuit split on the proper framework for analyzing float."
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| 17. |
Fidelity Sued Anew Over 401(k) Fees, Investment Strategy
Bloomberg BNA
Dec. 16, 2015
"According to the complaint, Fidelity responded to losses incurred during the 2008 financial crisis by adopting an overly conservative investment strategy meant to appease the company's 'wrap providers' -- which include AIG Financial Products, JP Morgan Chase Bank and State Street Bank -- at the expense of the workers investing in one of Fidelity's stable value funds. Fidelity then attempted to conceal these missteps by reporting a misleading benchmark that made the fund look more competitive than it actually was, the complaint alleged. Fidelity also charged excessive fees in connection with the fund and allowed its big-bank wrap providers to more than double their fees, the complaint alleged."
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| 18. |
DOL Proposal Would Have Hobbled Recent Help for Investors, Fidelity Says
The Wall Street Journal; subscription may be required
Sept. 4, 2015
"On Aug. 24, when the Dow Jones Industrial Average briefly plummeted more than 1,000 points in the first six minutes of trading, the volume of calls to Fidelity Investments' toll-free numbers was 50% higher than for a typical summer Monday.... Phone representatives generally urged investors with a long-term investment plan to 'stay the course.' But if a controversial proposal from the U.S. Labor Department had been in place, [said John Sweeney of Fidelity Investments,] call-center representatives at Fidelity and other companies would have been far more restricted in what they could say after the initial 'don't panic' to customers calling about 401(k) plans and other retirement accounts."
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| 19. |
Fidelity to Match a Percentage of IRA Contributions for Some New Depositors
Brandon Sun
Feb. 27, 2015
"Fidelity's matching program will last for three years, and it's limited to certain customers. Those who transfer a Roth, traditional or rollover IRA to Fidelity with a balance of at least $10,000 and register for the program will get the match. The amount of the match will depend on how much money an investor is bringing to Fidelity. Someone transferring $10,000 would get a match worth 1 per cent of their annual contributions. The percentage rises for people bringing more money: Someone transferring $500,000 would get a 10 per cent match on new contributions."
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| 20. |
Fidelity Investments Wins Huge in the 'Biggest 401(k) Case in Decades'
RIABiz
Mar. 20, 2014
"This case validates the DOL's message that employers need to look more carefully at fees, says Fred Reish, an attorney with Drinker Biddle & Reath LLP.... Even though Fidelity is off the hook in this case for fees, Reish questions whether recordkeepers could get fined for excessive fees in the future.... But in this ABB case, the court didn't question Fidelity for its recordkeeping fees. Instead, the court determined that ABB failed to complete its due diligence for the recordkeeping fees paid to Fidelity. In addition, ABB didn't benchmark its recordkeeping fees." [Tussey v. ABB, Inc., No. 12-2056 (8th Cir. Mar. 19, 2014)]
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