Plan Sponsors Nationwide Sued Over 401(k) Fees and Revenue Sharing:  Could You and Your Plan Be At Risk?

A law firm in St. Louis filed several class action lawsuits last week against plan sponsors, their officers, directors and named individuals of fiduciary committees alleging fiduciary breaches with regard to 401(k) plan expenses.

These lawsuits bring into question the revenue sharing arrangements between 401(k) plans, mutual funds and other investment providers as well as plan record keepers. Allegations have been made that plan sponsors entered into agreements which allowed fees to be charged to plan participants which were unreasonable under ERISA. Additional allegations of failure to monitor the fees and expenses and failure to inform themselves of and understand the manner by which revenue is generated are made also. The lawsuits ask for restoration of all revenues lost by the plan as well as removal of fiduciaries.

These fees can be invisible to Plan Sponsors and thus your plan and individual fiduciaries could be at risk without even being aware of the problem. A fiduciary audit can help you evaluate any hidden fees or revenue sharing arrangements with your plan's vendor.

If you would like to discuss what steps you should take to protect yourself, your fiduciaries and your plan, please contact your Ice Miller benefits attorney.