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Litigators View Your 401(k) Plan as a Tempting Target. What Can You Do as the Plan Sponsor?

As noted in our prior blog post here, plaintiffs’ firms—large and small—have been aggressively targeting 401(k) plan fiduciaries. Fiduciary breach claims are on the rise, and it is increasingly the fiduciaries of midsize and small plans who find themselves in the crosshairs. The majority of these lawsuits fall into the “excessive fee” category. The claims may include allegations that fiduciaries breached their duties to the plan by selecting higher fee actively-managed funds instead of index funds, selecting more expensive retail class funds instead of institutional class funds, selecting bundled funds with additional layers of fees (such as certain target date funds), failing to monitor revenue sharing from the selected funds, paying excessive recordkeeping fees, retaining poorly performing investment options for too long, failing to benchmark service provider fees or solicit bids from competing service providers, failing to leverage the plan’s asset size to negotiate lower fees…and the list goes on.… Continue Reading

September 2022
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