ERISA
EXCESSIVE RETIREMENT FUND FEES


Class Action Attorney investigating ERISA Litigation & pension fund fee fraud on behalf of plaintiffs nationwide
Nationwide Success

401k Mismanagement Lawsuits

Investigating retirement plan & pension fund negligence claims

The Lyon Firm is currently reviewing cases of pension fund plan violations, ERISA excessive fee claims, and 401(k) class actions brought by retirement plan participants

Employees and attorneys are challenging retirement plans and revenue sharing arrangements, claiming that the various types of investment options, such as retail mutual funds and actively managed funds, charge plan participants excessive fees.

Since 2006, a wave of ERISA fiduciary lawsuits challenging the fees and expenses associated with 401 (k) plans have been filed on the behalf of American workers who feel they have been misled and cheated out of a percentage of their retirement funds.

Several recent rulings have resulted in large settlements and judgments, including a $62 million settlement with Lockheed Martin Corp., as well as settlements with several financial institutions and other corporations.

Joe Lyon is a highly-rated financial fraud lawyer representing plaintiffs nationwide in a wide variety of retirement plan and investment fraud in ERISA lawsuits.  

If you have questions about your 401K plan, please contact us for a no-cost consultation and potential evaluation of your plan.

What is ERISA?

The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for voluntarily established pension and health plans in private industry to provide protection for individuals.
ERISA requires plans to provide participants with important plan information including the following:

•    Plan features and funding
•    Minimum standards for participation
•    Vesting
•    Benefit accrual and funding

ERISA also provides fiduciary responsibilities for those who manage and control plan assets, requires plans to establish a grievance and appeals process for participants, and gives participants the right to sue for benefits and breaches of fiduciary duty.

The U.S. Department of Labor (DOL) recently updated its fiduciary rule, and could conceivably lead to more fee litigation. The new rules expand the scope of individuals and entities subject to ERISA’s fiduciary requirements.

Employee benefits attorneys have shown ERISA lawsuits are reshaping the 401(k) industry, pointing to lower industry-wide fees. To keep fees down, employers increasingly turn to index funds, which track a major index such as the Standard & Poor’s 500, since they’re cheaper than actively managed ones.

However, some companies and funds are still neglecting what is financially best for retirement plan participants in favor of maximizing profits for fund managers and banks.

ABOUT THE LYON FIRM

Joseph Lyon has 17 years of experience representing individuals in complex litigation matters. He has represented individuals in every state against many of the largest companies in the world.

The Firm focuses on single-event civil cases and class actions involving corporate neglect & fraud, toxic exposure, product defects & recalls, medical malpractice, and invasion of privacy.

NO COST UNLESS WE WIN

The Firm offers contingency fees, advancing all costs of the litigation, and accepting the full financial risk, allowing our clients full access to the legal system while reducing the financial stress while they focus on their healthcare and financial needs.

 

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Excessive Pension Fund Fee Lawsuits

Several large corporations have settled lawsuits with their employees regarding their retirement plans. Boeing Co agreed to pay $57 million to settle a lawsuit in which employees accused the company of mismanaging their 401(k) retirement plan.

  • Participants in the Estee Lauder 401(k) Savings Plan filed a class action lawsuit, alleging the company breached fiduciary duties under the Employee Retirement Income Security Act (ERISA) by failing to prevent the plan from paying lower investment and recordkeeping fees. Plaintiffs said that as a large plan, the company should have had bargaining power regarding the fees and expenses that were charged on the participants’ investments. Attorneys claimed the company did not try to reduce expenses or scrutinize investment options to the best of their ability. The plaintiffs allege those in charge of the Estee Lauder accounts breached their duties by failing to adequately review the plan’s investment portfolio. They say these breaches cost 401(k) participants millions of dollars.
  • Huntington Bancshares Inc. has made a $10.5 million deal to settle a proposed class action that challenged its decision to make allegedly underperforming company-owned mutual funds the centerpiece of its 401(k) retirement plan for company employees. 
  • Fidelity Investments settled a lawsuit involving their 401(k) plan for $28.5 million, which resolved a class-action case filed in 2018 that alleged the firm breached its fiduciary responsibility by adding its own products to the plan menu. The company had settled a similar claim in 2014 for $12 million. Fidelity has been accused of charging excessive infrastructure fees. Lawyers say the company reportedly adjusted its discretionary profit-sharing contributions to participants based on the amounts that had been returned to their accounts.
  • A trade association representing more than 900 electric cooperatives and public utility districts announced plans to settle a class action lawsuit challenging the fees embedded in its 401(k) plan. The settlement would resolve a lawsuit that alleged the National Rural Electric Cooperative Association mismanaged its 401(k) plan in violation of ERISA.
  • A participant in the Costco 401(k) Retirement Plan filed a lawsuit against the company, alleging violations of their ERISA duties. The lawsuit says the fiduciaries of the plan authorized unreasonably high fees for recordkeeping. Attorneys claimed the plan generally chose more costly, managed funds rather than index funds that offered a substantially lower cost.

Other companies that have settled ERISA-related lawsuits include:

  • Verizon Communications Inc.
  • AT&T
  • Chevron Corp.
  • Intel Corp.
  • Oracle Corp.
  • American Airlines Inc.
  • Anthem Inc.
  • Deutsche Bank Americas
  • Insperity Inc.
  • M&T Bank Corp.
  • BB&T Corp.
  • DST Systems Inc
  • Putnam Investments LLC
  • Allianz Asset Management

401(k) Plan Class Action 

Plaintiffs have filed a class action excessive fee lawsuit against defendant AT&T Services Inc. for allegedly mismanaging its $35 billion 401(k) retirement plan. AT&T has informed a federal judge in California that it would not dispute the participants’ request for class status.

In the complaint, almost 245,000 retirement plan participants and beneficiaries are challenging the administrative 401(k) fees paid to Fidelity Investments. AT&T plan participants have sued the company and the plan, alleging the company’s calculations for early retirement benefits violate the Employee Retirement Income Security Act (ERISA).

The class members claim they are forced to relinquish accrued, vested pension benefits if they retire before age 65, or receive their pension benefit in the form of a joint and survivor annuity. The complaint alleges that AT&T’s calculations for early retirement benefits and joint and survivor benefits offer “less than the actuarial equivalent of their vested accrued benefit as required by ERISA.”

Attorneys say AT&T has violated ERISA standards because the plan’s early retirement payments aren’t actuarially equivalent to the payments for normal retirement payments, and plaintiffs allege that the calculated early retirement benefits formula has not been updated in over a decade, despite increases in participants’ average longevity.

Joe Lyon is a class action attorney reviewing alleged ERISA violations and other cases involving excessive retirement plan fees.

Pension Fund Class Actions

In the last year, plaintiffs have brought claims new against 401(k) plans that offer Vanguard and Stable Value Funds as investment options. These claims are surprising, since plaintiffs previously argued that fiduciaries should use funds like Vanguard in 401(k) plans because they offer relatively lower index-based fees as compared to other investment options.

Plaintiffs have brought cases against Anthem and Chevron based on their inclusion of Vanguard funds that plaintiffs claim charged excessive fees in relation to other share classes that were allegedly available.

Plaintiffs have alleged that Anthem’s 401(k) plan, worth over $5 billion, failed to use its sizeable bargaining power to demand lower cost investment options.

The most publicized settlements are levied against large companies because of the massive sums involved. However, many American workers in small companies providing retirement plans have also been victims of excessive fees. Research shows that smaller plans typically carry higher fees than larger plans that can use their size as leverage to negotiate better deals.

Nearly 75,000 401(k) plans have $25 million or fewer in assets, and over four million workers have their retirement savings in these plans.

In a recent class action lawsuit, a Minnesota auto body repair company with around 100 participants and less than $10 million in assets was sued for excess fee violations.

Most cases concern mega plans with assets in the billions of dollars, but this lawsuit, filed in May against LaMettry’s Collision and its $9 million 401(k) plan, has the attention of many companies and employers of the small-plan variety.

ERISA Settlements

Several highly-respected American universities such as, Columbia, Yale, Duke, New York University, MIT, Johns Hopkins, the University of Pennsylvania, Vanderbilt and Emory have been targeted with claims that retirement plans cheated employees through excessive fees.

In contrast to the 401(k) plan cases, most of the suits, including the newest one against Columbia, concern university 403(b) plans.

Retirement Plan Fraud

Over 60,000 workers filed a recent class action lawsuit against Morgan Stanley. The suit claims that the company mismanaged its own employees’ retirement plans by offering poorly performing funds and charging excessive fees.

The suit also alleges that the company used the 401(k) plan as an opportunity to promote its own business and maximize profits at the expense of its employees. It offered its own funds, without considering funds from other companies.

ERISA Pension Fund Cases

The Employee Retirement Income Security Act (ERISA) is a federal law that sets standards for most voluntarily established retirement plans in private industry to provide protection for individuals. ERISA provides the following guidelines and regulations:

  • Plans must provide participants with plan information, including information about plan features and funding
  • ERISA sets minimum standards for participation, vesting, benefit accrual and funding
  • ERISA outlines fiduciary responsibilities for those who manage and control plan assets
  • ERISA requires plans to establish a grievance and appeals process for participants to get benefits from their plans
  • The law also gives participants the right to sue for benefits and breaches of fiduciary duty. If a benefit plan is terminated, the law guarantees payment of certain benefits through a federally chartered corporation.

The Lyon Firm is proud to litigate ERISA violation claims and Excessive Fee cases on behalf of employees whose 401(k) and pensions have suffered losses as a result of a breach of fiduciary duties by plan administrators and corresponding companies.

Joe Lyon has recovered millions of dollars for American workers and consumers in a variety of consumer protection lawsuits and class action employment litigation.

photo of attorney Joe Lyon reviewing ERISA lawsuits
investment plan litigation

Why are ERISA cases important?

Without pension fund class actions, large corporate defendants would be able to cause small amounts of harm over a large group of investors and employees without any risk of monetary penalty.

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Questions about ERISA Lawsuits

Do I have a 401K mismanagement case?

Last year there were a record number of 401(k) lawsuits due to excessive fund fees, low returns and limited investment options. Class action lawsuits may be necessary if your employer is not looking after your retirement plan carefully, and fairly distributing your hard-earned money. 

The fee structure of any retirement plan is critical, particularly the expense ratio. Many funds have an expense ratio of 0.20% or less, while others charge above 1%, which will quickly add up and limit the capital growth expected. 

Some attorneys have alleged that companies engage in revenue sharing, where they may overcharge plan participants and that money is filtered to the plan administrator, recordkeepers, brokers, or financial advisors. These hidden overcharges will erode returns. 

Can I join an investment negligence Class Action Lawsuit?

An Investment Plan Class Action is a lawsuit usually brought by an individual on behalf of all other similarly situated individuals in order to resolve a financial plan dispute in an efficient format.

If you are part of a pension fund or retirement plan and believe your fund managers are negligent in giving plan members the best investment advice or options, contact an attorney to review. 

can i recover investment losses?

By filing a claim following the loss of an investment due to financial advisor negligence, you have a chance to recoup your losses and get compensated for poor 401 (K) or pension fund management. 

What are excessive fund fees?

Fund managers and financial advisors have a duty to their plan members to seek the highest returns and lowest management fees available. If you suspect your fund managers are “churning fees” or putting you into funds for self interests, you may have a viable lawsuit. 

If you pay a third-party plan administrator it is important to beware of the fees you are being charged. 

If your 401(K) has lost value due to excessive management fees, you may have a viable case, and should contact a legal professional. Your employer’s HR should be monitoring any fund fees that seem out of the ordinary. 

Your employer is responsible for maintaining your 401(k) retirement plan, and explaining the details of the plan. Employers are also responsible for choosing a vendor and how the fees will be charged to the plan. If an employer fails to maintain and monitor a 401(k) program, a poor-returning retirement plan may result and can be grounds for filing a 401(k) mismanagement lawsuit. 

what is a fiduciary duty?

fiduciary duty for a retirement fund manager is an obligation to act in the best interest of the plan members. 

how do i know if my retirement plan is mismanaged?

If your pension fund, 401 (K) or retirement plan is underperforming the market or experiencing unusual losses, you have the right to ask questions. The Lyon Firm can review whether your fund is properly managed and has reasonable investment fees. 

What are some recent retirement plan lawsuits?

An L Brands 401(k) plan participant filed a class action lawsuit against the retailer, alleging the company breached its fiduciary duties in the management of the retirement plan.

The lawsuit claims L Brand, the parent company of Bath & Body Works and Victoria’s Secret, breached its duties under the Employee Retirement Income Security Act (ERISA) with excessive plans fees and choosing more expensive share classes of its investments instead of less expensive options.

The suit said the L Brands Inc. 401(k) Savings and Retirement Plan breached its duties by paying excessive fees to Wells Fargo from 2014 to the present. Plaintiff also allege the company breached its financial duties by not offering institutional share classes of some of its investment options. The L Brands Inc. 401(k) Retirement Plan has around $1.6 billion in assets, according to a filing from last year.

DeMoulas Super Markets Inc., the company behind the New England grocery chain Market Basket, will pay $17.5 million to settle a retirement plan class action in which plaintiffs claimed it forced employees to invest retirement savings in a fixed-income fund that earned small returns and overall provided little opportunity for growth. The settlement requires DeMoulas to limit the amount of plan assets held in cash and modify the plan’s investment policy to increase the annual profit target.

pension fund negligence

How to File Investment Loss Lawsuits

Filing a Investment Plan Class Action lawsuits is a complex and serious legal course and can carry monetary sanctions if proper legal course is not followed. The Lyon Firm is dedicated to assisting retirement plan members and plaintiffs work toward a financial solution to assist in compensating for investment losses. 

We work with law firms across the country to provide the most resources possible and to build your case into a valuable settlement. The current legal environment is favorable for consumers involved in pension fund class actions, 401 (k) plan and financial advisor negligence claims.

erisa lawsuits

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