Compliance April 23, 2025

MEP Plan Participants Win in Jury Trial Against Pentegra

A jury awarded a class of more than 25,000 employees and retirees more than $38 million.

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In a rare ERISA jury trial, a jury Wednesday awarded more than $38 million to a class of retirement plan participants alleging a fiduciary breach against Pentegra’s multiple employer plan.

In Khan et al. v. Board of Directors of Pentegra Defined Contribution Plan et al., a jury found that fiduciaries of Pentegra’s more than $2 billion Multiple Employer Defined Contribution Plan for Financial Institutions breached their fiduciary duties under the Employee Retirement Income Security Act by paying unreasonable recordkeeping and administrative fees.

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Filed in the Southern District of New York, the case was originally brought in 2020. The named plaintiffs are Imran Khan, Joan Bullock and Pamela Joy Wood, who represented themselves and all others with retirement savings in the plan since September 15, 2014. In March 2022, a federal court found most of the plaintiffs’ ERISA fiduciary breach claims were sufficiently pled to advance beyond the motion to dismiss stage in the litigation process.  

The jury verdict found that the plaintiffs proved, beyond a preponderance of evidence, that:

  • The board of directors of the Pentegra Defined Contribution Plan and its members—Sandra L. McGoldrick, Lisa A. Schlehuber, Michael N. Lussier, William E. Hawkins, Jr., Brad Elliott and George W. Hermann— breached their fiduciary duty by causing the plan to pay unreasonable fees to Pentegra Services Inc.;
  • Former CEO John E. Pinto breached his fiduciary duty by causing the plan to pay unreasonable fees to PSI;
  • PSI breached its fiduciary duty by causing the plan to pay unreasonable fees to PSI;
  • Pinto was a fiduciary to the plan and either (a) knowingly participated in an act or omission of the board, knowing such act or omission was a breach; or (b) had knowledge of a breach by the board and did not make reasonable efforts under the circumstances to remedy the breach; and
  • PSI was a fiduciary to the plan and: (a) knowingly participated in an act or omission of the board, knowing such act or omission was a breach; or (b) had knowledge of a breach by the board and did not make reasonable efforts under the circumstances to remedy the breach.

The jury also awarded damages to the plaintiffs of $38,760,232.

The participants were represented by the law firm of Schlichter Bogard LLC, and Pentegra was represented by Groom Law Group.

There are still allegations pending related to prohibited transactions, and those will be heard and decided by the court, not a jury.

Products & Services April 23, 2025

Human Interest Launches Platform to Streamline 401(k) Management

The company says the launch comes after 50,000 hours in product and engineering over the last year in direct consultation with dozens of financial advisers.

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Human Interest introduced PartnerConnect, a platform that will allow advisers to more efficiently create, manage and monitor clients’ 401(k) plans and investments—specifically viewing and managing multiple clients simultaneously.

The platform is designed to support both retirement plan advisers and wealth advisers and is “specifically designed to eliminate many of the burdensome, mundane administration tasks that advisers hate,” the company said in a statement.

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Key elements of the platform, according to the company, are the ability to do things online that used to be manual, or require faxing of documents or multiple emails back and forth. It integrates plan design, proposal management, fund lineup, and participant data into a single solution. Highlighted features include:

  • The ability to request and review proposals online and onboard new clients directly into the platform.
  • A single view across all retirement plans in an adviser’s books of business through an integrated dashboard that eliminates the need for multiple login accounts.
  • A tool called ParticipantIQ that supports identifying participant engagement opportunities and spotlight participant milestones (retirement, termination, salary increase, etc.).
  • Access to more than 3,000 funds, with which advisers can easily adjust funds or create lineup templates for replication across multiple plans.
  • Bulk fund mapping so advisers can select a single fund for multiple plan lineups at one time.

“Advisers are on the front lines of the effort to help investors and businesses navigate our challenging retirement system—and their partnership is crucial to Human Interest’s mission to deliver retirement plans for people from all lines of work,” said Rakesh Mahajan, Chief Revenue Officer at Human Interest, in a statement. “That’s why we designed PartnerConnect with advisers at the heart of the experience.”

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