Since the Supreme Court took a worker-friendly approach on behalf of Cornell University’s 28,000 employees in a 403(b) excessive fees suit in April, it was expected that the final ruling could burden plan fiduciaries and open the floodgates for similar litigation. Now, Stifel Financial Corp. is facing allegations that it paid unreasonable administrative fees for its employee retirement plan.
The new class action lawsuit, Dell v. Stifel Fin. Corp., alleges that the Stifel Financial Profit Sharing 401(k) Plan fiduciaries’ actions were “contrary to actions of a reasonable fiduciary and cost the Plan and its participants millions of dollars,” according to the suit filed on July 4 in the US District Court for the Eastern District of Missouri.
The 401(k) plan’s average fee of $79 per person between 2019 and 2023 is 182% higher than the average fees for comparable retirement plans, Stifel employees alleged in the complaint.
Plaintiffs Amanda Dell, Joshua Thompson, Lamar Vaughn-Nolden, Michael House, and Michael Madras filed suit “on behalf of the Stifel Financial Profit Sharing 401(k) Plan, themselves and all others similarly situated.”
The plaintiffs claim that the Stifel “breached the duties it owed to the Plan … failing to pay reasonable fees for [recordkeeping and administrative] services with respect to the Plan, and failing to objectively and adequately review the Plan’s investment portfolio, initially and on an ongoing basis, with due care to ensure that each investment option was prudent, in terms of performance.”
The plaintiffs also allege that the plan’s investment of “substantial assets” in an Empower guaranteed income fund “carried significantly more risk and provided a significantly lower rate of return than other comparable stable value funds.”
Related: Supreme Court hears Cornell’s 403(b) excessive fees case: Did it open the floodgates for more suits?
In a similar lawsuit, Pentegra Retirement Services agreed to settle its complaint with 26,000 bank employees and retirees for $48.5 million in a case tied to a multiemployer 401(k) plan, alleging the company charged unreasonable fees and engaged in prohibited transactions, earlier this month.
The Pentegra case is yet another win for law firm Schlichter Bogard, which has been representing many plaintiffs in the onslaught of 401(k) and 403(b) excessive fee cases over the last few years. Jerry Schlichter, founder of Schlichter Bogard, is a pioneer in legal action against 401(k) and 403(b) plan sponsors on behalf of retirees and savers.
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