Saturday, March 29, 2014

A Lone Ranger of the 401(k)’s -

Creative thinking by plaintiffs lawyers produces results. - gwc

A Lone Ranger of the 401(k)’s -

by Gretchen Morgenson

On March 19, the Eighth Circuit Court of Appeals in St. Louis affirmed a lower-court ruling in one of the first 401(k) fee cases to go to trial. In that case, the court found that ABB Inc., a power and automation technology company, failed to monitor its plan’s internal costs and paid excessive fees by not negotiating for rebates from investment companies whose funds were offered in the plan. This, the court said, violated ABB’s fiduciary duties to the 401(k) participants.
The lower court awarded $13.4 million to the ABB plan participants in that part of the case.
The significance of this ruling extends far beyond ABB. It sends a powerful message to plan sponsors everywhere: If you think you’ve done your fiduciary duty simply by offering low-cost funds as investment options, think again.

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