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Charles Schwab 401(k) Lawsuit Trimmed but Moves Forward

"Former Schwab employee Michael Dorman can move forward with a challenge to how the company replaced an affiliated stable value fund in its 401(k) plan with other funds. But Dorman's other allegations, which challenged the fees and performance of the plan's Schwab-affiliated funds and certain loan transactions, were dismissed[.]" [Dorman v. The Charles Schwab Corp., No. 17-285 (N.D. Cal. Feb. 8, 2019)]

Charles Schwab Seeks to Arbitrate 401(k) Investment Case

"Charles Schwab Corp. urged a federal court to order a former employee challenging the investment options in the company's 401(k) plan to submit his claims to individual, non-class arbitration ... The plan documents required participants to submit any claims arising out of or related to the plan to binding arbitration in a non-class basis, Charles Schwab alleged ... Schwab ... may be one of the first financial companies facing an ERISA lawsuit over its use of in-house funds in which the claims move to arbitration."

Ninth Circuit Signals Potential Rehearing of Denial of Class Action in Charles Schwab ERISA Suit

"At its core, the issue deals with whether an ERISA fiduciary claim is always a claim on behalf of everyone in a plan or whether a court can limit the claim to include losses to only one, or a select group, of participants. The issue also affects whether class-action waiver agreements are enforceable and, whether class actions are inherently included in every ERISA fiduciary-breach claim." [Dorman v. The Charles Schwab Corp., No. 18-15281 (9th Cir. Aug. 20, 2019; also unpub. memo. opinion)]

Ninth Circuit Sends Charles Schwab ERISA Case to Individual Arbitration

"A U.S. Court of Appeals determined that arbitration on an individual basis is the proper forum for a participant’s claim that Charles Schwab breached its fiduciary duties and engaged in prohibited transaction under [ERISA] by holding proprietary funds in its 401(k) plan." [Dorman v. The Charles Schwab Corp., No. 18-15281 (9th Cir. Aug. 20, 2019; also unpub. memo. opinion)]

Charles Schwab Wins Pro-Arbitration ERISA Decision

"[T]he 9th Circuit has overturned and remanded the District Court’s decision on the grounds that it is no longer 'good law' to conclude that ERISA plaintiffs as a general matter cannot be forced into arbitration....  According to the District Court, the lead plaintiff’s claims were brought on behalf of the plan -- not on his own behalf -- and without the plan’s consent he [could not] waive rights that belong to the plan, such as the right to file this action in court." [Dorman v. The Charles Schwab Corp., No. 18-15281 (9th Cir. Aug. 20, 2019; also unpub. memo. opinion)]

Charles Schwab 2018 401(k) Participant Study (PDF)

17 presentation slides. "Two in three participants would sacrifice past spending to save more for retirement ... Unexpected expenses and quality of life spending are the top obstacles to saving for retirement ... Saving enough for a comfortable retirement is the top source of financial stress for participants ... Participants believe their quality of life in retirement will be better than that of both the previous and the next generation[.]"

District Court Denies Forced Arbitration in Charles Schwab ERISA Class Action

"The plan document's arbitration provision broadly encompasses 'any claim, dispute, or breach arising out of or in any way related to the Plan,' and extends to the ERISA claims asserted, [Schwab] said [and] further contended the arbitration provision of the plaintiff's severance of employment agreement likewise embraces the ERISA claims, insofar as it requires arbitration of 'any dispute or breach arising out of or in any way related to employment.' " [Dorman v. The Charles Schwab Corp., No. 17-285 (N.D. Cal. Jan. 18, 2018)]

Results of the Charles Schwab 2016 401(k) Participant Survey (PDF)

17 pages. "Fewer than half of participants know how much they should have saved for a comfortable retirement ... 401(k) plans are a 'must-have' benefit for job-seekers Without it, nine in ten would think twice about taking a job ... Fewer than half are confident making 401(k) decisions on their own ... One-third have decreased or made no changes to 401(k) contributions in past two years."

Charles Schwab CEO on the Future of the 401(k)

"In an interview on December 8, he weighed in on all things concerning the American investor in this landscape -- including 401(k)s, Social Security, and just who should and shouldn't invest in stocks. He discussed what it's like sitting across the hall from Schwab himself, and what he has in common with the '99%.'"

Schwab Shoos $25 Billion of Client Assets Out the Door as It Calls the Bluff of Employers with Lopsided 401(k) Contracts

"In a move that reflects the changing economics of the advice and retirement business, The Charles Schwab Corp. fired several big 401(k) clients with a combined $25 billion of assets.... Because the employers bar Schwab from, in effect, soliciting its clients thus thwarting its efforts to win rollover dollars in sufficient numbers, Schwab saw no room for these clients in its business plan going forward, according to Steve Anderson, executive vice president of retirement plan services at Schwab. Schwab wants the freedom to e-mail and hold meetings with participants of 401(k) clients."