In August 2010, a U.S. District Court dismissed a putative 401k class-action lawsuit against Broadridge Financial Solutions and Matrix Trust Co. The court found that the alleged fiduciary breach did not merit a class-action designation and that the suit did not provide enough information to support a finding of liability. However, the case argues that a wide variety of investment options can be included in a diversified 401k.
One such example is a 401k class-action lawsuit that was filed in a Federal court in New Jersey against the company.
The plaintiffs sued the plan’s fiduciaries and sought recovery for investment losses allocated to their accounts. The participants claimed that the employer had imposed a special valuation date of April 30, 2020, that reflected plan investment losses during COVID-19 lockdown. This decision reduced the account balances available to participants.
The judge found the plaintiffs’ claim to be unfounded and based on vague facts. The case is still in the preliminary stages, and more evidence may be needed before the case is resolved. But the company’s decision to fight the case could help other plan sponsors defend themselves against similar claims. It may even serve as a precedent for the type of evidence needed to win a trial. And the decision could have a ripple effect.
This latest 401k class action lawsuit is just one of the growing trends in California.
In recent years, attorneys have filed similar suits against many employers in the state. In total, these lawsuits have resulted in $430 million in settlements. Several employers, including Reliance Trust Co. ($39.8 million), SunTrust Banks Inc. ($29.5 million), and Deutsche Bank Corp. (£21.8 million). The attorneys who represent the plaintiffs in the case are Feinberg Jackson Worthman & Wasow LLP and O’Melveny & Myers LLP.
In another 401k class-action lawsuit, the plaintiffs claimed that the funds deposited into their IRAs were invested in mutual funds with high fees. Although the company agreed to settle the case, a judge ruled that the settlements were insufficient. The claim against the company’s IRAs also failed to meet the standard of ERISA. The court ruled that the ERISA did not prohibit the sale of IRAs and 401k plans.
This case is the most recent of several 401k class action lawsuits that were filed in the past year.
This lawsuit was filed in the U.S. District Court of Central California and was filed by employees whose IRAs were subject to higher fees. As a result, the plaintiffs failed to prove their IRAs were mismanaged in the best possible way. There are no such restrictions for the ERISA lawsuits.
The court found the plaintiffs’ claims in the ERISA lawsuit were invalid. The company’s fees were not fair and were not comparable with other 401k plans. The company’s administrative fees, meanwhile, were higher than average. Despite this, the plaintiffs had alleged that their employers had overcharged them and were not monitoring their costs, which they claimed were unreasonable. The defendants deny wrongdoing and deny liability. They maintain that they have considered ongoing costs and the risks of defending in court.
The court has also found that the plaintiffs’ administrative fees claim was invalid.
The plaintiffs’ 401k plan provider had excessive administrative fees compared with other comparable plans. As a result, the court rejected the case. While the DOL has changed its rules to prevent a 401k class action, attorneys can group a large number of plaintiffs into a single case, increasing the likelihood that the plaintiffs will receive a substantial payout.
The plaintiffs claim that the defendants overcharged them for administrative fees that were higher than average for other similar retirement plans.
This is not true. The company denies liability and refuses to settle. Its lawyers are making a lot of money. Those who have been overcharged by their 401k provider are also entitled to a payout from the company. If you’re in the same situation, you should seek legal advice.
The 401k plan that is involved in the lawsuit was created by Sears employees in 2011. The employees claim that the company’s fiduciaries continued to hold the company’s stock after it was notified of the loss. This caused the 401k fund to lose $12.9 million in 2015 and $4.5 million in 2014. In December 2016, Sears life insurance company fiduciaries stopped future purchases of Sears stock. This was “far too late” for the plaintiffs to recover.