Legal

While a recent 401(k) fiduciary survey claimed more than 700,000 American companies could be at risk of fines and legal penalties for fiduciary failures in their retirement plans, one retirement expert now claims that most of these ERISA "red flags" are unfounded.

A New York jury awarded 26,000 employees $38,760,232 in an ERISA fiduciary breach lawsuit over unreasonable recordkeeping and administrative fees from their retirement plan provider.

Senator Bill Cassidy, ranking member of the Senate Health, Education, Labor and Pensions Committee, has issued a white paper outlining proposals to provide retirement plans to independent workers.

Former employees had sued the grocery chain for failing to rein in recordkeeping costs from Fidelity, even though services were “routine” and did not justify the excessive costs, according to the class action lawsuit.

Since the Court took a worker-friendly approach on behalf of the University’s 28,000 employees in this excessive fees suit, the final ruling could burden plan fiduciaries and open the floodgates of meritless litigation, say retirement industry groups ERIC and the Spark Institute.

The justices are now seeking input from the Department of Labor in this Home Depot case, after unanimously agreeing that the burden of proof lay with plan fiduciaries in the Cornell University excessive fee case last week.