Capital One Financial Beats ERISA Suit

The dismissal order grants the plaintiffs, who are represented by the law firm Capozzi Adler, two weeks to file an amended complaint regarding certain portions of the proposed class action suit.

The U.S. District Court for the Eastern District of Virginia’s Alexandria Division has dismissed an Employee Retirement Income Security Act lawsuit filed against Capital One Financial Corp. and various related defendants.

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The judge’s order runs to just two pages and sides firmly against the plaintiffs’ arguments, though it does leave room for the filing of an amended complaint. It notes that the order is based on conclusions reached following a hearing held on May 27, during which the parties’ counsel argued for and against the various cross motions that had been filed during the litigation process.

The plaintiffs in the case are participants in the Capital One Financial Corporation Associate Savings Plan. They alleged that the defendants committed fiduciary breaches by failing to adequately review the plan’s investment portfolio with due care to ensure that each investment option was prudent in terms of cost. They further alleged that the fiduciaries failed to control the plan’s recordkeeping costs.

Technically, the order grants the defense’s motion to dismiss the suit, and further orders that the first count of the complaint, insofar as it pertains to claims based on three investment options that the lead plaintiff did not invest in, is dismissed for lack of Article III standing under the U.S. Constitution. The order also dismisses the plaintiffs’ claim regarding alleged excessive recordkeeping fees for a failure to adequately state a claim.

The order states that the plaintiffs may file an amended complaint as to the first count’s recordkeeping fees claim and the entire second count—though this must be done within 14 days of the date of the order.

Special Training Course for Advisers Serving Gov, Military Clients

Mike Harris, chair of retirement studies at the College for Financial Planning and a 1982 graduate of the U.S. Air Force Academy, will lead the program.

The College for Financial Planning, part of Kaplan, has launched a specialized course developed to support financial advisers who work with government workers and military personnel.

As the leaders at the College for Financial Planning point out, more than 25 million current government and military personnel face many complex issues related to their retirement. They face many of the same challenges as private sector workers, such as increasing longevity and higher health care costs, but they also face unique challenges related to their public-sector employment. For example, many military “retirees” may actually be transitioning to a second career at a life stage when they are not financially secure enough to stop working.

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“Among the major issues today is advising people on how to live on their retirement account and how to manage their money in retirement,” says Mike Harris, a professor and chair of retirement studies at the College and a 1982 graduate of the U.S. Air Force Academy. “The huge wave of Baby Boomers retiring means there is a lot of money coming out of 401(k) accounts, defined benefit plans and individual retirement accounts. Retirees and those about to retire have a lot of issues to understand, such as income taxes, estate planning issues, knowledge of the market and how to build a basket strategy.”

Harris will lead the specialized training program. He says military—as well as federal, state and local government employees—face a unique range of retirement-related factors. They may be transitioning to a new job at a time that they can make enhanced contributions to a defined contribution type retirement plan, and they may be able to leverage benefits coming from the Veterans Affairs Department, including privileged healthcare options.

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