Search the News Archive

Department of Labor EBSA Enforcement Results and Priorities

"The 2018 statistics reveal that EBSA continues to focus on its national priorities and major cases in which it can accomplish the biggest impact and recovery. Left unsaid by EBSA is our experience that EBSA is demanding higher amounts in order to settle audit findings.... While EBSA's published statistics focus on how many cases it closed and resolved, Euclid's internal monitoring of EBSA enforcement of multi-employer plans has found that the agency initiated more audits in 2018 than 2017.... While the focus on missing participants is more well known, EBSA has increased its investigative focus on health plans, including ACA and mental health compliance."

Coronavirus Fiduciary Investment Claims: A Look at Retirement Plans

"With actual investment losses from the recent market decline, it is likely that plaintiffs will continue to bring excessive fee cases, but this time they will have the investment losses to create a more appealing storyline. While it is not clear that all index funds will outperform actively managed plans during the downturn, plans offering actively managed mutual funds are still at risk if they underperform index benchmarks, and will provide fodder for additional excessive fee and breach of fiduciary duty claims against defined contributions plans."

The Gamesmanship of the Excess Recordkeeping Claims Against the American Red Cross

"The plaintiff lawyers in the Red Cross case do not properly acknowledge how the fees were charged; nor do they attempt to compare a percentage-of-asset approach to other plans with a percentage-of-asset approach. Instead, they choose the dishonest approach of asserting both misleading fees and comparators. The had no need to resort to distortion, but that is the default mode of many excess fee lawsuits."

Debunking Recordkeeping Fee Theories in 'Excessive' Fee Cases (PDF)

18 pages. "[This whitepaper] is a guide to the common tactics used by plaintiff law firms to stack the deck with misleading claims.... The simple fact remains that most large defined contribution retirement plans in this country have low recordkeeping fees ... But given the rampant misrepresentations of actual fee levels in the excess fee lawsuit claims, federal courts have not been given the proper perspective or context to make informed decisions on threshold pleading motions."

Excessive Fee Lawsuits Without Excessive Fees: The Case of the $30 Recordkeeping Fee

"The complaint alleges that the Kroger 401k Plan had a $30 recordkeeping [fee], which they claim is 50% too high, but in reality is lower than nearly every plan in America today. The case shows how the Supreme Court needs to step in and halt the ability of the plaintiffs' bar to impose improper liability on the fiduciaries of America's retirement plans, absent legitimate proof of real fiduciary imprudence and harm to participants. If the Kroger plan can be sued with a low recordkeeping fee, then every plan sponsor in America is at risk of being sued, and ERISA is no longer the fiduciary law that Congress intended." [Sigetich v. The Kroger Co., No. 21-0697 (S.D. Ohio complaint filed Nov. 5, 2021)]

Analyzing the BrightScope Defined Contribution Plan Data in the Context of Excessive Fee Lawsuits

"If the premise of an 'excessive fee' case is that the large plan fiduciaries failed to leverage their size to control plan expenses, this survey debunks this premise for most large plans.... Plaintiff firms try to contend that certain active investment options in these plans are imprudent, but the simple fact remains that participants in nearly every plan can choose investment options with minimal fees."

Reducing the Risk of an Excessive Fee Lawsuit: Plan Committee Checklist

"The best defense is to reduce your chance of being targeted by: [1] offering only the lowest-cost institutional share class investments; [2] offering primarily index investment options, particularly for the target-date suite; [3] requiring the plan sponsor to pay all recordkeeping fees, or ensuring that plan recordkeeping fees are on a low, flat, per-participant structure that does not increase as plan assets grow; and [4] requiring a full RFP on a regular basis, but at least once every three years."

Exposing Excessive Fee Litigation Against America's Defined Contribution Plans (PDF)

24 pages. "The copy-cat lawsuits -- now nearly 200 in number with over 90 filed in 2020 alone -- attack retirement plan investment options that are commonplace and longstanding.... Fiduciary liability insurance companies have paid an estimated $1B+ in settlements and well over $250 million in attorney fees to a growing network of plaintiff firms chasing these outsized fee awards.... Systemic reforms are necessary before American employers decide the cost and risk of offering voluntary defined contribution plans is too high."

Health Plans: What Does New Coronavirus Legislation Mean for Fiduciary Liability Coverage?

"Defense of benefit disputes that might arise from this new legislation are a key protection under your plan's fiduciary liability insurance policy. Several provisions are worth reviewing in advance. [1] Is the coronavirus response legislation covered under your fiduciary policy? ... [2] Coverage for participant benefit or provider claims ... [3] HIPAA compliance."

Supreme Court Interprets the Statute of Limitations for ERISA Cases: What Is the Meaning of 'Actual Knowledge'?

"Employers can longer rely on comprehensive disclosures of plan investments and fees to shorten the ERISA statute of limitations. This will lead to expensive discovery, including depositions of every plaintiff, to learn whether they have read and comprehended the disclosures from the plan.... It will also further complicate class action certification for cases that fall in second half of the six-year statute of limitations." [Intel Corp. Investment Policy Comm. v. Sulyma, No. 18-1116 (S. Ct. Feb. 26, 2020)]