401(k) plan litigation in the qualified retirement plan space has been an area of significant growing attention over recent years. Qualified retirement plans designed to provide employees with a tax advantaged way to save for retirement. However, disputes and legal challenges have emerged highlighting various issues and concerns. (This is plainly evidenced by the number of court decisions that were issued on motions to dismiss during the last quarter.)
One major area of litigation involves allegations of fiduciary breaches by plan sponsors, administrators and other service providers. Whether they are aware or not, qualified plan Fiduciaries have a legal obligation to act in the best interest of plan participants. Retirement plan cases often revolve around claims of excessive fees, poor investment options or inadequate disclosures.
This week Fred Barstein, Contributing Editor at WealthManagement.com’s RPA Edge highlights plan litigation as a hot topic in the industry. Mr. Barstein cites weekly the top stories that occurred during the prior week. Recently a writing by CAPTRUST Financial Advisor, Drew McCorkle, caught Fred’s eye. The article is an interesting read on the state-of and resolutions in some of the high-profile cases. He includes a recap of fee litigation cases for many ERISA related lawsuits. There are interesting findings these days and solid practices by plan sponsors are paying dividends!
Overall, litigation and court decisions have helped shape standards for fiduciary conduct valuation practices and disclosure obligations. That practice does not seem to be subsiding anytime soon!
