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Are You Ready for a Plan Participant Lawsuit?

ERISA Fiduciary Lawsuits Are Not Going Away

The barrage of excessive fee lawsuits filed in 2006 started a trend that continues to this day. Companies have paid out $6.2 billion in ERISA class-action lawsuits since 2000. In 2019 class settlements alone hit $499 million.

Why is this happening?

The vast majority of lawsuits allege process violations accusing fiduciaries of not acting in the best interests of their Plan Participants. Any of these allegations from Plan Participants puts an organization at risk:

  • Excessive record keeping fees
  • Failing to monitor the amount of revenue sharing
  • Keeping under-performing investments in the plan
  • Failing to offer an appropriate mix of investment options

It’s not just Plan Participants calling out their employers. The Department of Labor (DOL) has increased its enforcement related to these issues. The DOL is investigating any size plan (from 10 employees and up) if they believe harm has occurred.

What Can Plan Sponsors do to Mitigate Your Organization’s Risk?

  • Assemble and formalize a plan committee
  • Hire a professional, experienced, fiduciary plan consultant
  • Develop and Investment Policy Statement
  • Hold a minimum of two meetings per year
  • Provide the committee with fiduciary training
  • Regularly review the plan’s investments and their performance, including the use of a Watch List

Most Plan Sponsors rely on professional support to put a process in place to mitigate fiduciary risk. Marsh & McLennan Agency Retirement Services assist Plan Sponsors with ERISA best practices to protect their retirement plans. Contact us for an independent evaluation of your retirement plan.

Sincerely,

MMA Retirement Services

 

 

 

 

 

 

 

 

Unbiased Perspective

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